Hello to everyone who is interested in Prague and Czech real estate market in general.
Since this group is more focused on USA, I would like to grow network of people who are in the local market and are willing to share their experiences. This topic is just to start the conversation, what I am interested is: do you rent long or short term? What do you think of AirBNB and short term rentals in the future? How effected would be Prague if/when the next “crisis” comes in terms of % value downfall? Do you have any specific part of Prague in your favor?
Let me start myself, we operate about 20 long term and 20 short term flats, everything more central is for AirBNB. Speaking of regulations, financial office seems to be happy with their Tax rules they introduced for AirBNB - considered business rather than rental - so I dont expect much restrictions anytime soon, but its important to keep in mind “plan B” when buying a property - that it should be operational also with long-term rentals if any major restriction arrive. Should any crisis arrive, I think Prague would be one of the much less effected cities, since more and more ppl move to Prague from other parts of the world. The percentage of drop I wouldn’t dare to guess, Czech national Bank says the properties are are about 15% “overpriced”. Specific parts of Prague - used to like Zizkov, now think the good value is in Nusle.
Willing to share your experience? :-)
Nice to hear about your experience, many are already anticipating a slump at the end of 2020: a correction that was bound to come?
I saw some people from Europe on this forum, wanting to invest in the US remotely rather than locally actually. Don't know, I think a local presence is better... The Nomad Capitalist rather uses remote real estate for its comfort, rather than renting it out, it seems...
Anyways, you know quite a bit about me already, looking forward to hear more the coming time!
I can't answer the question of HOW MUCH it will fall, but I can answer the question of how your investing strategy would perform if you do one (or more of the following):
1. Don't buy now, but wait to buy at some *guessed* point in the future where you think the market has dropped and will go up from there. You can do monte carlo analysis to see what happens if you don't quite get it exactly.
2. Buy everything you wanted to now (before a drop) and what happens if there is a drop (or there isn't) using a monte carlo anaylsis again.
3. Buy systematically through the drop at regular intervals or based on whenever you save up enough down payment to buy more... so you're buying into the market over time. Again, you can do monte carlo modeling of this as well.
Then, you can compare the three different plans (or others) and see which would perform best for you in terms of net worth, cash flow, best loan terms (if you're getting financing) and a couple measures of risk like debt to net worth.