Rental flats in large cities are becoming scarce due to the crisis
Social disparities are deepening, and those who cannot afford to buy their own property rely on rental housing, for which they spend a larger share of their income. High demand is turning rental flats, especially in large cities such as Prague, Brno and Ostrava, into scarce commodities. Those operating investment properties in these cities are in an advantageous position. How can you benefit from this and protect yourself as a landlord against all risks?
Property market experts and experienced investors agree that investing in property is one of the best ways to grow money safely over the long term. This is especially true in sought-after regions of the Czech Republic, notably large cities, which attract people for work and study. “However, there is one crucial prerequisite: being able to calculate the investment return properly, i.e. the ratio between the funds invested and the income received. There are matters that should be of interest to you from an investment perspective, so that you are well protected against risks,” explains David Novotný, owner and managing director of Bohemian Estates, an independent real estate company with more than ten years of tradition and experience in the property market.
If you are looking to acquire an investment property, there are two key things to consider: how to buy the flat advantageously and how to let it advantageously. Letting a flat or house, however, often resembles an extreme sport. Finding a reliable tenant with a sound payment record alone can be difficult.
“Finding a reliable and respectable prospective tenant is essential if you want to minimise, in advance, all the problems associated with making a profitable return on a property. At a time when the number of habitual non-payers and overdue debtors continues to rise, this is no easy task,” says David Novotný, adding: “And even once you finally succeed, you have not yet won as a landlord. Late or missed payments are common even when dealing with decent people and are one of the downsides of this additional income, especially if you financed the purchase of your investment flat with a mortgage.”
Run your investment flat risk-free
Those who do not want any worries connected with their rental property can use the guaranteed rent service. It is suitable for anyone who wants to receive regular rent every month without having to deal with anything else. A professional property manager can proactively reduce the risk of non-payers by thoroughly vetting every prospective tenant. This normally includes checking for outstanding debts and any enforcement proceedings, but an experienced manager will also take an interest in their permanent address and current employment.
And how does it work? “We lease the property from you, find a reliable tenant and check that they have no outstanding debts. We enter into a sublease agreement with the subtenant and pay you the agreed rent, even if the property is vacant or there is an issue with non-paying subtenants. We take care of both the subtenant and the property for you. Once the lease ends, we guarantee that the property will be handed back in perfect condition,” explains David Novotný.