There is no need to wait to invest in property; the market is not expecting falling prices
At least, that is what real estate market experts say. The market’s future was uncertain due to the coronavirus pandemic, and many people had also postponed investments because of the announced abolition of real estate acquisition tax. However, this legislation finally came into force last week after being signed by President Miloš Zeman. So, if anyone had delayed investing because of uncertain prospects, the near future of the real estate market is now entirely clear and, according to forecasts, nothing stands in the way of a modest rise in property prices.
Buying an investment property is not a matter of a single week and, for many, it is the largest investment they will ever make. What is more, purchases are often financed by a mortgage, so it is unwise to make spontaneous decisions without expert advice at hand. “When buying a property intended for rental, caution is essential. An investor’s aim is to buy a property at a fair price, rent it out successfully and later sell it at an even better price. It is therefore necessary to be certain of the property’s technical condition and whether it carries any legal encumbrances. And if it does, we need to know how to deal with them,” explains David Novotný, founder and director of the independent real estate agency Bohemian Estates International.
It is also important to take into account the time required to find the right property. Simply monitoring listings on property portals could, in terms of time commitment, rival a full-time job. “When searching for a property, it is a good idea to set out the criteria that matter to us in advance. This naturally filters out properties that are unsuitable and significantly narrows the selection. At first glance, this may not seem like an advantage, but it is ideal when buying an investment property. For example, we know that the property we are looking for must be refurbished, in a location with good public transport connections, and have a particular layout, because those rent out best,” Novotný explains.
Nevertheless, he points out that searching for a property on your own is time-consuming. “You need to devote time to combing through property portals. Even then, there is a risk that an investor will not reach the very best offers at all. These are most often properties at auction or properties first offered to clients of real estate agencies. For this reason too, in my view it is more effective to work with a real estate expert who can seek out exceptional investment opportunities for the buyer, even in parts of the property market that are not easily accessible to just anyone.”
The company also checks the properties it finds for its clients from both a technical and legal perspective, so the buyer can be completely confident about what they are investing their money in. “Our strategy is to lay all our cards on the table for the investor. They need to know what they are buying. On the other hand, if a property has minor shortcomings, we can negotiate substantial discounts,” adds Novotný.
And what returns can you expect as an investor? “The rate of return changes depending on how long the property is rented out for, how it is financed and under what circumstances it is sold. In short, it is a fairly complex issue that depends on several factors. We have clients who have made one million Czech crowns with our help, and clients whose returns were just over two million Czech crowns. Naturally, we cannot say precisely how much a client will receive back. However, we can promise that, with our help, they will achieve the highest possible appreciation with minimal personal effort. We take care of everything, from the search and purchase through subsequent rental to the final sale,” concludes David Novotný of Bohemian Estates International.