If done properly, with great care, patience and help of a trustworthy agency this could be a successful investment plan in the Czech Republic. However due to the popularity of this investment option in Europe, very often an investor is rushed into buy-to-let investment in the country which may not be a prudent. It is vital to remember that just because this plan works in other countries, does not automatically mean that the Czech system is setup for such an arrangement. This information must be taken into account when making your investment plans.
Here are the potential problems with the buy-to-let option in the Czech Republic.
- Landlord / tenant laws in the Czech Republic are confusing and impossible to enforce. If a tenant refuses to pay, there is little the owner can do to evict him.
- If the property falls under Czech rent control laws, the problems worsen. Rent control means that the owner is unable to charge market rates for rent, although rent restrictions are almost completely lifted now. Meanwhile maintenance requirements are strict and expensive.
- Also under rent control, apartment swaps (illegal exchanging of tenants) is controlled not by the owner, but by the property management company. So, the owner will have no control, nor even usually be aware that any swaps are taking place.
Czech property in Prague especially, has experienced an immense amount of hype in recent years as foreigners want to take advantage of buy-to-let deals. Most of these deals are offered by foreign investment firms. They offer you to buy through them off-plan and then they agree to manage the property for you: collecting rents, doing maintenance, advertising for tenants for a small fee. But the majority of these companies doesn’t really do anything but collect their fees and arrange the deals through a local representative.