Prague Real Estates and Financial market overview

6 Replies

Dear BP colleagues,

I am happy to be member of BP community, however it is not yet very established in Europe and Czech republic especially. With this post I want to encourage all investors and agents to join this group to discuss possibilities in this lovely heart of Europe.

One unique opportunity - foreigners from EU can get up to 90% LTV financing from local banks even without local income!!! Non-EU residents can still get 70% LTV with interest rates around 2,5% and bellow. Czech National Bank encourages investors from all around the world to invest into Czech republic with low interest rates and certain banks allows even these Buy-to-Let mortgages for investors.

I'm looking forward to for any posts in this forum,

With best regards,

RP

Prague is a lovely part of Europe ... one of my favorite cities in fact. However, I'm always wary of remote management and think that hands on local investment is generally wisest. Also, I'd be a bit wary about currency risk, though the dollar is quite strong at the moment and could go along way, one never knows what may happen in the future. What sort of terms are you seeing for foreign investors on mortgages? 30 year, fixed rate possible? What sort of interest rates? Are investments possible for foreigners on the debt/lender/notes side of the business? Just curious ...

Hi Adria,

is there anything specific I can relate to?

Some basic numbers: you can enter the property market with flats in Czechia for as low as 15.000 EUR/USD in industrial cities but if you are interested in Prague you need to spend minumum 100.000 EUR/USD. Rental yields in Prague are around 4-8%, the latter for AirBnb in good locations but the price would be at least double. Rental yields in industrial cities tend to be around 8% in general but in the past there hasn't been as much growth as Prague but this is changing. 

With regards,

Robin

Hi David,

Czech crown is currently artificially week (Czech National Bank's intervention - see comments in English http://www.cnb.cz/en/monetary_policy/weakening_kor...) but this year it is reported to end, this would mean strengthening against foreign currencies. It is my opinion that Czech economy will continue to improve at a faster rate than western europe as there is still a lot of potential for growth.

25 years fixed rate is possible for rates around 3,5% and the best interest rates are currently at 5 years fixing around 2%. 

Speaking of the notes - it is possible but banks tend to sell them in bulk. You could setup Czech entity without any hassle to do this.

Best regards,

Robin

Hi Edwin,

I completely agree with your comment. I am involved in company where we do property management but only for people who've invested through us. There are number of management agencies in Prague who are very professional. When Czechia entered EU (2004) there was huge foreign investment which created the need for those management companies and competition between them remains strong. 

If you are looking at the AirBnb market it is much easier to see what is happening with your property in terms of management. You can read reviews, see average prices etc. For example we charge 40 EUR for each checkin and checkout (including cleaning), no percentage.

If you have any other questions, feel free to ask.  

Best regards,

Robin

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