How can you get the most from renting out your property? Let experts determine the best strategy

The reality, however, is somewhat different, and only someone who has rented out a property before knows that rental income does not come for free. You need to consider not only the necessary administration, but also regular property maintenance and communication with authorities. And if a property owner finds themselves dealing with unreliable and unfair tenants, renting out a property can become a nightmare that is very difficult to wake up from.

Despite all the pitfalls, renting can still be profitable and, as in every area of business, profits can be maximised here too. All it takes is choosing the best strategy for renting out your property. “The popularity of shared accommodation reached the Czech Republic several years ago, which benefits all owners with a property in a tourist destination or another attractive location. And anyone now deciding to invest in a property intended for rental has a choice. In addition to traditional long-term rentals, it is also possible to offer short-term rental accommodation, which, with the right management, can generate significantly higher returns. However, some knowledge of this area is needed if the aim is to achieve the maximum possible profit,” says David Novotný, owner and managing director of the independent real estate company Bohemian Estates.

Short-term rental, however promising it may sound, is not suitable everywhere. Larger cities frequently visited by tourists are ideal, as are locations near major companies employing people who would otherwise have to commute to work. “The clear advantage of short-term rental is undoubtedly its profitability. Returns can be up to twice as high as with long-term rental, and if a particular tenant fails to pay, it is usually not an overwhelming amount,” Novotný notes, highlighting the main benefits of short-term rental. However, due to the Financial Administration's methodology from 2017, which changed the rules of the game and means that short-term rental is now considered an accommodation service, we increasingly encounter property owners who do not want to venture into short-term rental. “And it is no surprise. Short-term rental is time-consuming in itself, requiring continuous advertising, communication with tenants, regular cleaning, maintenance and service improvements. Moreover, due to the aforementioned methodology, short-term rental operators are required to pay personal income tax, health and social insurance contributions, recreational and spa fees, and report foreign nationals to the Foreign Police,” Novotný adds.

Higher returns can also be achieved with long-term rental if the property is well managed. “Many people do not see why they should involve professionals in property management. Yet they can prevent most problems, such as non-paying tenants or routine administrative tasks that require time and energy. In addition, professionally managed properties have proven to be more profitable, as they experience fewer tenant vacancies,” says Novotný about long-term rental.

In both cases, working with a real estate company appears to be the most effective way to maximise returns without sacrificing your free time. “We have been involved in property management since the very beginning of our company, and in addition to long-term rental, short-term rental is also our speciality. In such cases, we sign a lease agreement with the client, making us the responsible party. The property owner then does not have to deal with any of the above-mentioned obligations or payment of statutory contributions. Whichever type of rental is more suitable for a particular property, clients can be sure that we will choose the strategy with their interests in mind,” Novotný concludes on behalf of Bohemian Estates.