The Czechia is not just Prague or Brno. You can make money from real estate elsewhere — HlídacíPes.org
The Czechia is not just Prague and Brno, and real estate investments are not just apartments in a big city. Although there are relatively certain investments in them, there are already a lot of conflicting interests. There are also many cities where interesting returns can be achieved and at the same time contribute to the development of the region.
However, it is always important that infrastructure exists or is planned in a given location. And there lived people with a long-term relationship with the place.
Surprising prize winner: Mnichovo Hradiště
For example, in the Czech Statistical Office, they noticed that in terms of location, the number of inhabitants of Mnichov Hradiště is among the prizes for the construction of apartments. A village of wooden houses grew up near the city. From a purely statistical point of view, it was ranked, for example, among Říčany, Černošice, Beroun…
Mnichovo Hradiště is located about 60 km from Prague, about 14 km north of Mladá Boleslav. Approximately 8,700 inhabitants live here. Why is it that in such a small settlement, hundreds of new units suddenly grew in the field?
Statisticians explain this by saying that the place is relatively close not only to Prague, but also to Mladá Boleslav and also to the mountains. In addition, it is close to the highway. It’s nice there, and after all, it’s cheaper to build here. And so there are also houses for rent, which are used by companies connected to Škodovka.
Housing for energy
And another example: long before the enormous increase in energy prices, it was obvious that the Temelín nuclear power plant would have to be expanded. Europe does not have an energy concept and only wind, savings and the sun will not cover the consumption. Without the core, without Temelín, it won’t work.
It can therefore be expected that with the completion of another reactor, the stable demand for housing in the vicinity of Týn nad Vltavou will increase rapidly.
The building here appears to be a solid real estate investment suitable for a solid dormitory. Even with a sober estimate, our profitability and the ratio of what we pay for rent is roughly four times better than for an apartment in Prague.
Westinghouse subsequently stopped to complete Temelín in the 1990s and supplied the fuel. An acquaintance of mine, an expert on local affairs, remembers that Westinghouse contributed generously to the rents of its employees. So generously that the townhouses paid for local landlords up to four times over in five years of renting.
Garage with 25% yield
another example where you can easily make stable real estate investments is Ústí nad Orlicí. I know this from my experience. A spare parts dealer operates in the smaller commercial area here. A well-known brand. The company does not want to own real estate and needs to be close to customers. He pays solid rent. The same goes for the building materials seller: he also wants and needs to be close to people, not just in the big city.
The purchase and reconstruction of such an area cost the same as one Prague apartment, but the yield is around seventeen percent.
I feel that within five years companies such as Rohlík and Košík will come to cities like Ústí nad Orlicí and will need smaller logistics hubs. No giant halls by the highways. They already have them, but they need to be even closer to the market and distribute logistical risks.
Real estate investing sometimes doesn’t even require a lot of capital. My friend lives in Karlovy Vary and bought a garage for 100,000 crowns four years ago near the hospital. Now he rents it for two thousand a month. His investment almost paid off within four years. The yield is 25% per year.
Deal with poverty, bad karma
But it is investment suicide to rush into regions that one does not understand and where one has no reliable support. For example, some Philut people lured me to Varnsdorf, to buy vacated block of flats. The price of a small apartment with an average of 200 thousand crowns. The monthly rent for such an apartment was 12 to 15 thousand CZK. The number of people in a 2-bedroom apartment – easily over ten. I’ve seen an apartment where tenants have dug their way through a paneled wall into an empty unit. Thanks, I don’t want to deal with this.
Another friend of mine bought 3+kk apartments for under 100,000 crowns in Chomutov twenty years ago. However, he did not choose most of the leases. One must have the stomach and enforcers for such a world. Profiting from poverty is bad karma. It will not bring luck to the investor in the long run.
It is always good to bet on investments (not just speculation) that not only bring a nice return, but also have some clear benefit for the place, for the people.
Forecasting the future
– Rich Prague, rich Brno. High-quality Central Bohemia and Eastern Bohemia.
– Stable south Bohemia and south Moravia.
– Border areas of the former Sudetenland – greater poverty, disorder, fewer job opportunities, lack of tradition.
– Transport accessibility to Prague and Brno will be increasingly important – especially train connections.
– In recent years, the differences between the regions have decreased, now they will start to increase again, it will be related to employment.
– Within individual larger cities, the differences between parts for the rich and for the socially weaker will deepen.
The author is a Czech investor.
Did you like this text?
Support us through Let’s donate or by conversion using a QR code
Thank you very much for your support!
Online payment is provided by Darujme.cz