People increasingly prefer renting to owning their own home – what do property owners think?
While property prices continue to rise steadily, banks are tightening their mortgage lending rules and interest rates are increasing, the property market is once again experiencing unprecedented turbulence in a short period of time. After a brief pause, rental flats are returning to the market in large numbers and people are once again showing considerable interest in them. Homeownership is simply out of reach for many.
Current rental prices reflect this too: since this autumn, they have been returning to their previous levels and are even reaching new highs in some places. There is now strong demand not only for flats in large cities, but also in the areas surrounding regional cities, where people want to move primarily because of lower prices.
However, as tourism in the Czech Republic remains at a low level and foreign tourists have not yet returned in full, there is still an ample supply of flats. They are also being placed on the market by owners who originally bought them solely for short-term rental. A full recovery in international tourism is not expected in the coming months due to the pandemic situation, and owners of these properties have no reason to wait.
“Flats originally intended for either Czech or foreign tourists have lost their original investment purpose over the past two years, and it would be plainly unwise for their owners to rely solely on short-term rental. Many of these flats are now being offered, for example, to businesspeople or to individuals and families seeking a tenancy for a fixed period, perhaps six months or a year,” explains David Novotný, owner and founder of the independent real estate company Bohemian Estates.
However, it is not unusual for the concept of short-term accommodation in some city districts to have changed completely, with many people moving entire families into their properties under conditions usually associated with long-term living. Even in these cases, property owners cannot entirely avoid potential problems.
“It is important to understand the difference between short-term and long-term rentals. Owners generally have more work with short-term rentals, but long-term rentals also carry their own risks. For example, tenants who fail to pay are not uncommon, and within the limits of the law they can be very difficult to evict from a property, even where they are deliberately refusing to pay. If someone is paying a mortgage on such a property and encounters a problematic tenant of this kind, they may find themselves without income for several months,” adds Novotný.
For such situations, Bohemian Estates offers a guaranteed rent service, under which the company itself takes care of finding tenants and collecting rent. It charges an agreed commission for these services and continues to pay the owner the agreed rent, even when the property is vacant or the tenant fails to pay. Property owners therefore have no worries and need not fear finding themselves in financial difficulty. Bohemian Estates also assumes responsibility for the condition of the property and guarantees its return in its original condition. The service is intended for anyone who sees potential in renting out their property but does not want to take on additional worries and responsibility.