Foreigners are buying more apartments in Prague as an investment for rental

Prague - Foreigners in Prague are increasingly buying apartments for rent as a favorable investment. They are primarily interested in small and medium-sized apartments in the center of Prague, priced between two and five million crowns. This follows from statements made by real estate agencies approached by ČTK.
"The interest in small apartments in the very center of Prague and the surrounding districts mainly comes from foreigners or Czechs living abroad for a long time. The most sought-after location is Prague 1, Old Town, Vinohrady, as well as the adjacent parts of Prague with very good transport infrastructure and connection to the center," said Aleš Ježek from the real estate company to ČTK. The interest of foreigners in apartments mainly in Prague 1 is also confirmed by the director of the real estate company, Regína Keřková. However, according to her, foreigners are also interested in apartments in Prague 2 and Prague 6.
Recently, according to Ježek, interest is also growing in other new locations, such as Holešovice. "In this case, the ratio between quality and price must be very favorable," Ježek pointed out. Ježek's company recently arranged financing and sale of 27 apartments in Holešovice to a group of Irish investors.
Foreigners demand, according to Keřková, mainly high-quality workmanship, quality and luxury materials, and secured above-standard services such as reception, security, or childcare. One person most often requests an apartment 1+kk or 2+kk with an area of about 50 m². Furthermore, they want at least one spacious and bright room; what does not bother them is an apartment on a busy street. Families want larger apartments 3+kk to 5+kk with an area of about 80 - 150 m² in a quieter area with accessible services such as shops and schools, starting from 50,000 CZK/m². According to Ježek, foreigners most often seek apartments up to 70 m² that are before renovation, and their price ranges between two and five million crowns.
Rent for the apartments that foreigners then lease ranges from 15,000 CZK to 45,000 CZK depending on size, location, quality of the apartment, and parking options, according to Keřková. According to Ježek, rent in renovated apartments varies depending on the location in the tens of thousands of crowns. "The usual market rent for an apartment of 50 m² ranges between 10,000 and 30,000 crowns per month, and in the case of short-term rentals, it can increase by up to 30 percent," clarified Ježek.
According to him, the yield on this investment starts at five percent with minimal risk of loss of the invested amount, but often ranges between seven and eight percent. According to Ježek, low mortgage rates in the Czech Republic also favor the investments of foreigners in Prague for buying apartments. “Almost all investments we intermediated for our clients were financed by a combination of a mortgage and own capital, where the share of own resources ranged from only ten to fifteen percent, with mortgage loan repayments financed from rental income," added Ježek. Citizens of Russia prefer to pay for apartments in cash, while foreigners of other nationalities choose mortgage options according to their possibilities, added Keřková.