Letting a property is not as straightforward as it seems!

You also expect the property almost immediately not only to cover any monthly mortgage repayment, but ideally to generate income as well. To achieve this, you need it to be virtually fault-free, continuously let and occupied by someone who pays properly and on time. The first step is therefore finding the ideal tenant.

But nowadays, that is as difficult as finding a needle in a haystack. Although mortgages have become cheaper this year, demand for rentals has not fallen, and it is not unusual for dozens of applicants to be waiting for a single flat. You need to communicate with them, not only electronically or by telephone, but also in person during viewings of your property. Unfortunately, the not-so-good news is that even after meeting someone in person, you are usually unable to tell whether the tenant you choose will be decent and reliable. Unless, of course, you decide to check the most serious applicants with their employer or previous landlord, for example. Alongside the time spent with applicants, you must therefore add the time spent checking references, and a few days can easily turn into several weeks. However you choose to carry out checks, we strongly recommend doing so. In practice, it is virtually the only way to at least partially minimise the risk of letting your property to tenants who do not pay. “Ideally, tenants should of course be checked against the debtors’ register, although this is somewhat more complicated for private individuals. However, we consider it essential nowadays and do so for every person we are considering signing a lease agreement with. Above all, this protects the property owner,” says David Novotný, owner and managing director of the independent real estate company Bohemian Estates International.

In addition to property investment, the company also provides rental property management, so it knows first-hand about the necessary administration and the amount of time management itself requires. Novotný also points out that finding tenants is not the only area where problems may arise. In his view, lease agreements are often underestimated too. “A lease agreement must be drafted in such a way that, should problems arise, it protects both parties to the extent permitted by law. Unfortunately, we often encounter the claim that it is enough to download a template from the internet, make a few minor adjustments and sign it. That is far from the truth. A lease agreement should always be prepared by a lawyer who takes all variables into account. This is, after all, a matter of course that a property owner can expect when working with a real estate company,” adds Novotný.

Real estate professionals can also help you with administrative tasks such as transferring utility accounts or communicating with the owners' association (SVJ). In the event of faults, they can arrange any necessary servicing. In theory, they can therefore relieve you of all responsibilities. The question is whether this approach is worthwhile. “Naturally, we charge an agreed fee from the rent for property management. On the other hand, we know that professionally managed properties achieve much higher occupancy rates, and letting under the guidance of a real estate company is generally less troublesome. For example, because we do not let properties to just anyone and aim to fill them with reliable tenants. In the long term, this delivers higher returns, and the property management service pays for itself,” concludes Novotný of Bohemian Estates International.