Property management – a service that makes sense

The overwhelmed landlord

Most private rental-property owners turn to a management company because they want to get rid of the hassle. In addition to letting their properties, they generally have regular jobs, families, children and, in some cases, even hobbies. They no longer want to deal with tenant requests, late payments, pointless administration, annual statements of utilities, arranging maintenance, paying expensive repair contractors, waiting for unreliable tradespeople, and ultimately carrying out all the maintenance in the flat themselves anyway. And while owners try to manage their flats as well as possible and accommodate their tenants, they simply do not have access to the same tools as professional companies.

The frustrated landlord

Non-paying tenants are every landlord’s nightmare. Last year, 2.4% of tenants in rental flats were in rent arrears. This follows from an analysis by the Association of Rental Housing. In reality, however, the figure is higher. It is important to realise that the figures in the analysis come from professional landlords, who thoroughly screen tenants. Data from private landlords are not available, but it can be assumed that most private owners do not have access to tenant-screening tools to the same extent as professionals and therefore face greater risk.

Experiencing rent shortfalls

Statistics show that properties managed by professional companies achieve average occupancy of 98%, while with self-management the figure is around 85%. The difference can amount to up to 1.5 months of unnecessary vacancy per year, which for a flat with rent of CZK 20,000 means a potential annual loss of CZK 30,000. In addition, a professional manager sets the market price more effectively. For example, at Bohemian Estates, in a large proportion of cases we can let a property for 8–10% more than owners can themselves.

Overall, a professional property management company has an advantage over a private landlord. Here are the main benefits a management company can offer:

1. Professional tools and technology

• Property management software – enables efficient tracking of rent, expenses, repairs and communication with tenants. It automatically sends reminders for overdue payments.

• Online tenant portal – enables easy communication, fault reporting and more.

2. Effective marketing and tenant search

• Professional advertising and presentation – better photographs, virtual tours and high-quality property descriptions attract more prospective tenants.

• Wider reach –  the listing reaches more people through advertising and leading property platforms.

• Faster occupancy – wider reach helps find a tenant more quickly and eliminates vacancy.

3. Thorough tenant selection – owner protection

• Creditworthiness and debt checks – checking prospective tenants’ financial history and whether they have outstanding debts minimises the risk of non-payment.

• Legally sound agreements – professionally prepared, robust lease agreements.

• Handling complaints and disputes – experience in resolving any issues with tenants.

4. Professional maintenance and repairs

• Cooperation with vetted suppliers – better prices and faster response times for repairs.

• Preventive maintenance – regular inspections and maintenance reduce long-term costs.

• 24/7 emergency service – immediate resolution of emergency situations such as a burst pipe.

5. Time savings and reduced stress for owners

• Comprehensive hassle-free management – the owner does not need to deal with day-to-day operational issues.

• Communication with tenants – the management company handles all administration and problem-solving.

• Clear reports and analyses – regular feedback on the property’s performance.

Overall, a professional property management company offers greater efficiency, a lower risk of issues, faster flat occupancy and a better return on investment than a private landlord who has to handle everything themselves.

The key benefits of this service include better occupancy levels, high-quality tenant selection, carefully prepared lease agreements and relief for owners from the day-to-day concerns associated with running a property.

Selecting reliable tenants

Landlords in the Czech Republic face a range of challenges, including legislative restrictions that make it difficult to resolve situations involving non-paying tenants quickly. Professional property management offers an easy solution to these issues. At Bohemian Estates, we focus on carefully selecting tenants, their reliability and debt-free status, thereby minimising the risk of rent arrears.

Carefully prepared lease agreements

The preparation of lease agreements also plays an important role. They are designed to protect owners’ interests while remaining fair to tenants. Properly drafted agreements can prevent many potential issues.

Nearly 100% occupancy

Another benefit is a higher property occupancy rate, which professional managers achieve through effective advertising and the swift letting of vacant units. With average occupancy of up to 98% and new tenants usually found within two weeks at the latest, property owners can count on a regular income.

Tenant care and administration

The real estate company manages lease agreements, handles all communication with tenants and resolves any issues. It also takes care of all administration, such as transferring utility accounts and issuing annual statements of utilities. This allows owners to focus on other activities without worrying about the day-to-day running of their properties.

Property management fees

The total cost of property management is by no means excessive: at Bohemian Estates, we charge 10 % of the monthly rent. Net rental income with professional management is often higher than with self-management. And it is entirely hassle-free – which is priceless.

One of our clients rented out a flat in Prague 7 for CZK 15,000 per month. Because he forgot to renew the agreement in time, the flat remained vacant for 1.5 months – a loss of CZK 22,500. Further problems arose with the utility statement. Due to a lack of knowledge, he mistakenly charged the tenant the outstanding balance owed by their predecessor, resulting in a complaint and damaged relations. Because of the tense atmosphere, he ultimately did not feel confident enough to increase the rent, even though market prices had risen by CZK 1,000 per month. Loss due to non-optimised rent: CZK 12,000.

Total loss over two years:

• CZK 22,500 due to vacancy.
• CZK 12,000 due to non-optimised rent.
• Additional stress, administration and worries.

Averaged over both years, the client earned CZK 168,500/year through self-management.

How we helped with property management

After taking over management of the flat, we:

• Optimised the rent – thanks to professional advertising, high-quality photographs and better outreach to prospective tenants, we let the flat for CZK 16,500 per month instead of the original CZK 15,000.

• Ensured continuous occupancy – we look for new tenants in good time and renew agreements promptly.

• Correctly apportioned service charges and utilities – no more mistakes, complaints or stress.

• Took over all administration and technical management – the owner did not have to worry about anything.

Thanks to the higher rent, the client earned: CZK 16,500 × 12 months = CZK 198,000 per year

After deducting the management fee, his net income was CZK 176,220 per year, which is CZK 7,720 more than before – but, above all, it came without unnecessary mistakes and was completely hassle-free.