Phases and characteristics of purchasing commercial real estate in the Czech Republic

Nowadays Prague is once again becoming an indispensable European capital. It is capable of providing utmost comfort to the people who decide to live in it. The idea of purchasing residential real estate (these can be private apartments or even entire homes) with the following rental seems to be an increasingly attractive form of investment.

The owners of residential property can rent their apartments in Prague year-round. Students study in the Czech capital, many payable international companies’ employees live in the city or pay a visit to it, and the Czechs themselves rent apartments for various reasons. Consequently, the investor will have a liquid real estate which he can easily sell not losing his money

There is a sustained political situation in the Czech Republic. Several political parties are fighting for power at a time, and this positively influences the country’s economy. Additionally, there is no migration crisis which the world community oversee in the west and in the south. Therefore, the state does not manage extra resources to deal with this problem.

According to the information provided by the organization Prague City Tourism, 7.5 million tourists visited Prague in 2017. No doubts, the majority of them do not stay in hotels. Tourists prefer booking accommodation by means of the services of short-term rental (Booking or Airbnb). Therefore, it is advantageous for property owners in Prague downtown to take into consideration daily rental housing.

The cost-effectiveness of investments in Prague real estate usually varies from 3% to 8%. Return on investment depends on the location of the residential real estate and on the entrepreneurial spirit of the investor partially. It is necessary to admit that an investor gains more when he rents several apartments separately. The profitability of long-term lease ranges from 3% to 5%. Speaking about short-term rentals, it`s from 5% to 8% (after all expenses have been paid).

With regard to the long-term lease, it turns out that the location is no longer crucial. If the apartment is located in a comfortable modern residential complex on the outskirts of the Czech capital, it will have a great request. The demand for long-term rental is rising: real estate becomes more high-priced. Consequently, those, who cannot pay for their own apartment, would prefer to rent housing.

Patenidisova s.r.o
Česká spořitelna
Pro Stavig
Parker & Hill
PS Audit
LZ Atelier
Unicredit Bank
Fio Banka
Unity Group

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