What should you do with a property in an attractive tourist location? Choose short-term rental
Letting a property can be an interesting additional source of income. However, properties let on a short-term basis can achieve far higher returns, especially those located in attractive tourist areas. Staying in private accommodation is becoming increasingly popular worldwide, and it is now preferred not only by tourists but also by people travelling to the Czech Republic on business. If you own a property in a highly visited area, give short-term rental a chance. Property experts can assist you throughout the entire process.
If you want to run a short-term rental yourself, you need to consider all the pros and cons. The Financial Administration introduced new guidance some time ago and changed the rules for operating short-term rentals to such an extent that, despite high returns, they may no longer be as lucrative. It involves such a large amount of bureaucracy that a working person today simply cannot be expected to have the time for it.
Under the aforementioned Financial Administration guidance, operating a short-term rental is a fully regulated business activity, involving various obligations such as health and social insurance contributions, payment of local recreational and spa fees to the municipality, and of course regular reporting of accommodated foreign nationals to the foreign police. This is naturally preceded by the need to register the relevant trade.
As a property owner, you are also required to pay VAT if your turnover has reached at least one million crowns in the past twelve months or if you have registered for VAT voluntarily. You must also pay personal income tax, and bear in mind that accommodation services are subject to EET, meaning you are required to record revenue through the electronic sales registration system.
Property management itself is also time-consuming and demanding to organise. You need to advertise the property, communicate with prospective guests, accommodate them, collect payments, and deal with the considerable workload of cleaning and maintenance. There is therefore no doubt that, while short-term rental is profitable, it is also very time-consuming. However, there is no need to despair or give up the potential income.
The independent real estate company Bohemian Estates has come up with a solution: by entering into a lease agreement with the property owner, it takes care of everything. “We sign a lease agreement with everyone who decides to work with us on arranging short-term rental, making us responsible not only for the rental itself, but also for meeting all administrative requirements and paying all statutory charges,” explains David Novotný, owner of Bohemian Estates, describing how the service works.
This allows property owners to continue earning income from short-term rental while putting all the worries behind them. “Under the agreement between us and the property owner, we assume all risks and responsibility, allowing owners to enjoy the money they earn and focus on something more worthwhile. Statistics from previous years clearly show that professionally managed properties achieve higher occupancy rates, and it can be assumed that working with us is not financially demanding for the property owner. It should also be mentioned that, when managing a property intended for short-term rental, we take care of cleaning, guest check-ins and maintenance, for example. Our client can therefore simply watch their rental generate income,” adds Novotný for Bohemian Estates.