All Forum Posts by: Robin Petrasek

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? :-)

@Matthew Song Loong you are probably referring to the seminar we hosted? You are more than welcome to join, next one will be in January. CSOB / Hypotecni banka I was mentioning because they are the most expats friendly, for BTL I would suggest se other banks.

Also if you are not member yet check FB group Czech Expats Property owners group.

@Seen Aquin I have been on the market since 2014 as a mortgage broker. We financed properties mainly for BTL, both mid-term and short term. Long term we don't find really effective as the best is renting room by room. AirBnb is good in near-to-center areas, I wouldn't suggest buying in the very center for the high prices in Prague 1.

Financing is nowadays more tough, what is interesting is product from one of local banks which lends to new SPVs (can be owned by foreigner) with 3,99%, duration 25 years and 70% LTV. This is the best IMHO foreign investor can get at the moment.

If you want more info, don't hesitate to ask.

@Matthew Song Loong

Hello Matthew, good job on buying in 2014, the property should have increased in the value by lets say 50%, didn’t it?

My name is Robin, I am a mortgage broker specialized working with Expats and BTL mnortgages. We just had our 2nd seminar where we discussed excatly these topics.

What you say about the 45% is thru, but you should be able with some banks to use the rental or even future rental income to support the cashflow. However Prague 1 - unless you are doing AirBNB, the rentals are hardly profitable IMO.

Also the LLC loan is possible with 70% LTV (what is super interesting is the maturitay of 25 years), interest rate 3,99%, just you might run into problem that the rent should cover the mortgage + buffer, which is quite impossible in Prague 1.

Let me know if you want to know more or have a cafe,

best regards, Robin

@Brandon L. Not really, didn't pursue this in the end. Focusing more locally

Hi Adam,

or maybe Dobrý den? :-) I assume you contacted all local banks for the financing? I am mortgage and loan broker (yes, Im Czech). If you are interested, I would suggest to meet or have a call to see on the banks side. LTV should be 50-80% depending on the project and people behind it.

Feel free to reach out to me.

With best regards,

Robin

Hi Daniel and Dalimil,

thank you for feedback. It is no secret that the main reason why properties in Prague are doing so well is mostly the appreciation as well as very good economy, hunger for flats and lack of supply. The timing is the key, now you can either expect crisiss and wait with cash to buy whatever comes at good price, or belive in the steady prices. It is true it is already 10 years from the last "crisiss" - I make it in quotes since it was more like recession than crisiss - we didnt experience nothing like the US - none of the banks bailed. Given the cycles it is possible the drop might happen soon - but there is another viewpoint that the Prague was previously very underpriced. Well and that is another topic - it was underpriced for EU capitals and overprices for locals. 

About Karlsbad, this is not our area of focus since we aim at Prague mainly, but it is worth the investigation I am sure. 

Best regards,

Robin

@Daniel Rongo

Hello Daniel,

Nice to hear you are interested in Prague - Czech Republic, "recently" renamed to Czechia, which many people don't know and confuse with Cecenia.

Great info from Christopher about commercial premises, I can add my feedback on residential market where I'm involved last 6 years.

In last 6 years, we had a lot of investors from abroad who I financed for their buy-to-ler flats. In recent years, there was incredible rise in appreciation, low interest rates driven the damand for investment flats and AirBnb was great source of income for many locals and investors. Until this year, it was "easy" to get financing even with foreign income but this year last bank stopped to provide these mortgages and nowadays the requirement for investor from another country to get leverage is either to pair with Czech entity, have some connections to Czech Republic or finance through company.

If you would like to know more about residential market, don't hesitate to ask.

With best regards,

Robin Petrásek

@Farkas Krisztián Balázs

Hi Farkas one more time.

Forgot to comment on the income from rental property. Banks can take income from rental property as well, but usually they consider only 50% from the net amount if it wasn't already taxed in your annual property tax return - ie.you rent out the property in March and in September you want to include the income - it is possible but usually with 50% only.

If you would ask for loan next year and have the income from the property included in your annual tax return, then banks consider the full amount or 70% from it, depending on how do you claim your expenses in your tax return.

With best regards,

Robin Petrásek

@Farkas Krisztián Balázs

Hi Farkas,

nice to see another person from Czech Republic. :)

There are nor many people on BP, so I am glad we expand out Czech base. I work in real estate specialized in financing expats and foreigners investing in Czech Republic, both buy-to-let and residentials.

20% is preferable but you can do with 10% as well - count with interest rate 0,3-0,7% higher than with 20% down payment. Also don't forget to factor in the 4% transfer tax which makes your investment usually 14/24% on down payment.

Don't hesitate to contact me for more details.

Best regards,

Robin Petrásek