This article is part of a series which goes through the 6Ws of Czech property investing (Why, Who, What, Where, When and How).
Probably our biggest question posed is where and what we would recommend investors to buy. This article discusses the what in that question as there have been some investments that over the years that have outperformed others.
Here is a short excerpt from the article:
“The following investments are ones which have and currently perform well across most of the major Czech cities including Prague, Brno, Ostrava and Pardubice / Hradec Kralove.
1. Studio or one bedroom apartments (1+kk to 2+kk)
Smaller rental units have historically outperformed larger ones and continue to show higher yields.
A good strategy for investors who have enough capital is to purchase two smaller apartments (or more) rather than one large one. This has a few advantages including:
a. Rent ‘smoothing’ – You will rarely have both units vacant at the same time meaning you are always collecting at least some rent with one unit vacant. With one larger unit a vacancy means a total loss of income.
b. Ease of renting – There are more potential renters searching for smaller flats meaning your time between tenants will be shorter than with larger units.
c. Liquidity – It is much easier to sell smaller units and they have categorically had greater upwards pressure in the years prior to the peak and have sustained their value the best through the recession.
d. Flexibility – Your original plan might have been buy and hold for 20 years but an unexpected life event causes you to need money urgently. Instead of having to liquidate a large asset you can sell only one smaller unit and keep the other.”
Read the rest of the article and our top two other recommendations: What are our top three Czech property investment recommendations?.
Although large apartments in historic buildings appeal to the heart, they have historically underperformed.
Updated/Aktualizováno: July 22, 2014,
