Investment property management requires the steady hand of professionals

If you have never let a property to anyone before, you may be surprised by the number of issues and the amount of administration involved. And although there is no shortage of prospective tenants today, this makes it all the more important to give the matter proper attention.

Choosing the right tenant is absolutely crucial to ensuring a trouble-free tenancy. However, statistics show that there can be dozens of applicants for each residential unit, which considerably complicates the selection process. “Tenant selection must be approached responsibly. Otherwise, the property owner faces numerous problems, such as unpaid rent or damage to the interior, which often only becomes apparent after the lease agreement has ended. In my view, however, it is completely unrealistic for someone with their own job and personal life to vet every prospective tenant,” says David Novotný, owner and managing director of the independent real estate company Bohemian Estates International.

As he adds, there are ways to screen prospective tenants, but applying all of them is time-consuming. “Of course, anything can happen, but if you are sufficiently prudent in your selection, you will significantly minimise all risks. For example, we check the payment history of prospective tenants in the debtors’ register, which few others do. It also helps to request references from previous landlords or even from an employer.” These services form part of professional property management, which, according to Novotný, is gaining momentum in the Czech Republic. “At Bohemian Estates, we feel that people are gradually ceasing to see the management of rental property as an additional expense and instead view it as an investment in the future,” says Novotný.

Professional property management frees landlords from the problems commonly faced by owners of rental properties. They do not have to deal with collecting rent, sending reminders, finding tenants or even regular maintenance. “Collecting rent is great until something breaks, tenants give notice, turn out to be non-payers, or utility and energy payment allocations arrive. You must also account for owners’ association (SVJ) meetings, filing tax returns, insurance, and so on. At such times, the owner has plenty of work that they probably do not enjoy and may not even understand. An attractive additional income thus becomes a full-time job, which no longer matches the original idea. That is why we are here: to take care of all matters related to letting,” adds Novotný.

It is also important to stress that, according to statistics, professionally managed properties achieve higher occupancy rates, meaning that over the long term this service effectively pays for itself. “We charge 10% of the monthly rent collected for the service, but the figures speak for themselves: for long-term rentals, we achieve an average occupancy rate of up to 98%. Not only does the service pay for itself, but it also increases net profit compared with managing the flat yourself,” concludes David Novotný of Bohemian Estates.