Bc. Tomáš Repaský, from our Ostrava office, is just completing an investment for an Israeli client which highlights the types of opportunities that are currently available in Czech Republic.
After doing extensive research the client, in May of 2013, decided he wanted to invest in Ostrava as he believed the region was currently undervalued. The client emailed Tomáš as one of the three agencies he approached in the region. The other two didn’t ever respond to him.
The Search
He paid for an hourly Active Search so Tomáš identified numerous potential investments (in his budget of 600,000 to 900,000 CZK) being marketed via real estate agencies and ‘for sale by owner’ venues.
The client bought his plane ticket over and viewed 7 of the best properties over two days.
The Purchase
Settling on one property listed at 640,000 CZK Tomáš was able to negotiate a discount with the seller of over 6%. The final agreed sale price was 600,000 CZK.
Photos of flat before reconstructionThe flat needed some renovations to maximize the rental potential so Tomáš arranged this. The total cost of the renovations was 130,337 CZK including Tomáš’ time for management.
Photos of flat after reconstruction
The Investment Return
As of this writing the flat is within weeks of being completed renovation. It will rent for 6,000 CZK to 6,500 CZK per month plus utilities. We will change this to the actual rent as soon as the renovations are completed.
With rent in this range it puts the gross rental yield at 9.9% to 10.7%!
UPDATE 21.11.2013: The flat rented for 7,300 CZK/month + utilities giving it a gross rental yield of 12%!!
As this investor was buying with cash it gives him a cash-on-cash return of 6.75% (Click here to see cash investment calculation). This on an investment that required minimal input from the buyer and will be the same on a continuing basis.
With mortgages as low as 3.39% on investment property at 85% LTV it could have been possible to even achieve a greater return by leveraging the purchase (Click here to see leveraged investment calculation).
Are you interested in getting your money out of low earning investments and into a property like this? Contact Bc. Tomáš Repaský at [email protected] or +420 774 850 381 today to discuss your options.
Updated/Aktualizováno: July 22, 2014,
