Let your property smartly and efficiently
Letting a property may seem to many like a simple way to earn a stable additional income that requires no major involvement. However, this is rarely the case. As a landlord, you need to find and screen tenants, draw up agreements with them, transfer utility accounts, take care of property maintenance and deal with further administration.
Taken together, all of this can require as much time as a full-time job, and you may often find yourself in a situation where you are not getting anywhere near as much income from letting your property as you could.
A common problem is renting out a property below market value. The rent is determined by the location, property layout, furnishings and the current state of the property market. It is therefore essential to have at least a basic understanding of the market. “Rental prices are continually rising slightly, and the current economic situation is also reflected in them. Yet it is not unusual for property owners to leave the price unchanged for several years. They are usually persuaded to revise it only when tenants change, but this is not very effective and the rental potential is far from fully utilised,” says David Novotný, owner and managing director of the independent real estate company Bohemian Estates International, which has been operating on the Czech property market since 2006 and, alongside investments in commercial and residential property, also provides professional property management for short- and long-term rentals.
While short-term rentals are virtually paralysed by the current situation, the profitability of long-term rentals remains high. However, as Novotný adds, rental properties need to be actively managed. This is the only way to make a rental effective. “Letting a property is a service like any other, and its price depends on many factors. Property owners should therefore not be afraid to adjust the price. As mentioned, it is also influenced by the current property market situation. On the other hand, it cannot be expected that every property owner will be familiar with this area – that is where we come in.”
Property professionals can therefore help owners not only with pricing policy, but also with other tasks essential to letting. “Property owners often do not realise how much work property management itself involves, and usually only find out when they have to deal with it themselves. We can take care of everything for them and ensure that the client is, in practice, simply receiving the money. We find tenants, sign the agreement with them, arrange utility transfers, organise all repairs, collect rent and communicate with tenants in the event of any issues. If tenants leave, we find replacements within a very short time. Any loss of rental income will therefore be absolutely minimal, if there is any at all,” says Novotný.
And how much will professional property management cost you as an owner? “At Bohemian Estates, we charge 10% of the rent collected for this service. However, the figures show that professionally managed properties not only achieve higher returns but are also occupied more often, preventing losses of rental income. It can therefore be said that the service pays for itself, while also increasing the property owner's net profit. And there is hardly any need to elaborate on the time and energy saved – that is invaluable,” concludes David Novotný.