Czech Investment Opportunity – Pardubice

The fall in property prices has given rise to a fantastic Czech investment opportunity in Pardubice.

The investment opportunity is in small flats (in Czech real estate terms: 1 + 1 or 1 + kk) and then putting them on the rental market.

The calculations give a very conservative return of investment of 86% over 5 years or 13.2% compound annual growth rate. Please see the calculations here for 85, 75 or 65% LTV (click the links at the top for the different LTV calculations) scenarios.

With banks offering 1% on savings accounts and the minimal risk of these investments in terms of the capital required, why would a person not put some money into this?

Conservative Gross Rental Yields of 8% On These Investments

Our calculations show that these investments have a gross rental yield of 8% (conservative estimate), which outstrips what is currently available in other cities such as Prague and Brno.

University With Very Limited Onsite Accommodation = Strong Rental Demand

Pardubice is a big university city with almost 10,000 students including many from foreign countries as there are over 200 courses offered in the English language. However, even with all these students, the available accommodation on the university campus is sadly lacking (only 1800 beds) and the majority of students need to find their living in private rentals.

Here is a video in English introducing the university.

The university also continues to invest and expand.

For example, see this recent article (August 28th, 2011) that they have just started construction on an expansion worth about 500 million CZK (approx. 20,500,000 EUR or 17,900,000 GBP).

A search on rental property shows that there is very little available in Pardubice in the range that students can afford and our recommended apartment type would rent for 6000 CZK/month + utilities.

For references that this type of rental is possible please see our rent valuation for this type of flat, search Realio.cz, or Sreality.cz.

Average Studio Property Prices Down 28% From Peak in 2008

Who likes a 25% off sale? I sure do!

RealityMorava.cz shows 1 + 1 prices are down about 28% from their recorded peak in 2008 (click on the year links in the lower right of the screen to show the price progression since 2008). However, the last few months the prices have been stable and growing slightly indicating that the bottom is likely over.


A search on sreality for properties 1 + 1 or 1 + kk for 900,000 CZK or under shows 68 properties being available. This would indicate that it is still a buyer’s market and good deals are to be had.

Question: Should I Be Concerned Purchasing a ‘Panel’ Flat?

It is true that most of the flats advertised in this price range are of concrete ‘panel’ construction.

‘Panel’ flats have certainly been the biggest losers in terms of price depreciation since 2008. Czech would prefer not to live in them because of memories taking them back to Communist days.

There are definitely cautions which must be considered including the current state of the building and the available funds in the maintenance fund of the building association (in case of substantial repairs). All these are things which we will check when doing the due diligence on the property for you.

Many of the choice locations for rentals in Pardubice are filled with blocks of ‘panel’ flats, making this an obvious choice for students.

‘Panel’ flats are definitely not the preferred choice in terms of construction in Czech Republic but we do believe that they have suffered unjustly in the price depreciation and will benefit equally or more from the property recovery as other types of flats.

Special Offer

We believe this is such a good opportunity for our clients that we are offering a one-time purchase package which would include our Gold level Active Search Package (normal value of 46,350 CZK + VAT) and our Gold level Legal Closing Service (normal value of 56,650 CZK + VAT) for a discounted price of 72,100 CZK (+ VAT).

This is a 30% reduction from the normal price and as a bonus we would provide a free PoA Mortgage Drawdown service (normal value of 17,000 CZK + VAT).

This offer will be in effect until October 31st, 2011.

Would you like to get started by finding out if you would qualify for a mortage? Please download, complete and send to us (info@czechpoint101.com). We will do this for free and totally without commitment being required.

Updated/Aktualizováno: July 22, 2014, Czech Point 101