Are short-term rentals worthwhile?
Short-term rentals through Airbnb or Booking are a hot topic in public debate. On one side is an attractive additional income for property owners in tourist areas; on the other are increasingly stringent operating conditions and objections from residents, who complain about a lower quality of life.
Why short-term rentals?
Especially in Prague’s historic centre and tourist destinations, owners are no longer looking for tenants for long-term rentals and instead offer their properties for a few nights, weeks or months. For one simple reason – higher profits.
Short-term rentals, when managed efficiently, tend to be noticeably more profitable than long-term rentals because the price can be set substantially higher. However, as with everything, short-term rentals have their pros and cons.
What to expect from short-term rentals
Bear in mind that short-term rentals will require more of your time and energy. You need to allow for communicating with prospective guests, handing over keys, frequent cleaning and preparing the flat for new guests – all these tasks will take more than five minutes.
You should also be aware that, under the new methodology of the Financial Administration, income from short-term rentals is not considered rental income, but business income. You must therefore obtain a trade licence, pay health and social insurance contributions, record sales electronically and report foreign nationals’ stays to the foreign police.
Are short-term rentals responsible for a lower quality of life and higher rents?
The current debate, eagerly fuelled by the media, speculates about whether short-term rentals may be responsible for rising rents and a declining quality of life in city centres.
Drunken tourists disturbing respectable residents in the early hours of the morning are, of course, an appealing image for the media, as it makes it very easy to divide people into heroes and villains. However, it must be acknowledged that problematic tenants can also be found in long-term rentals. We believe the situation is far more complex and that short-term rental operators cannot be identified with certainty as the culprits. The real reason for high housing prices is the Building Act and Prague’s land-use plan. Until the problem of approving new construction is resolved, there will never be enough new flats. Not even if platforms such as Booking or Airbnb are banned.