How to survive the lock down when you're a short term rent provider
Updated: Jun 25, 2020
Czech Republic is currently being locked down. We hear different opinions about the boarders opening: from couple months to 2 years. It is clear though that no foreigner would come to Czech republic before the pandemic is under control in Europe. Hence we’re talking here about months of the boarders closure because even if the pandemic is under control many people would be afraid of travelling or their economic situation will not allow them to do so this year. This will highly affect the tourism in Prague. Especially the short term accommodations.
Short term accommodation providers have to decide what to do with their flats during this hard period. Main options are:
1. to pause the flat until better times,
2. to rent out the flat for long term,
3. to sell the flat
TO PAUSE THE FLAT UNTIL BETTER TIMES
The first option would work for those who do not have mortgage or rent payments for their flat. They can call to all the utility providers and decrease all the monthly deposit payments. For example, for the apartments I managed for short term I have negotiated monthly deposit reduction with gas, electricity and internet providers.
TO RENT OUT THE FLAT FOR LONG TERM
Second option is most used one at the moment. Those who do not have mortgage or rent payments on their apartments can afford offering them for long term rent for pretty low prices creating a notable competition for the apartments that entered the market before the pandemic. For the small and mid-size apartments we see that the prices have dropped by 2000-3000czk against those of 3 weeks ago. For larger apartments the drop can be up to 10000 czk. Hence for the apartment holders it is important to consider the current dynamic of the prices if they want to succeed in renting out their place. Personally I do not anticipate an increase in demand for the rental accommodation earlier than the boarders are opened – only substantial increase of potential tenants may stop the prices drop.
TO SELL THE FLAT
Third option would help people who have considerable expenses for their apartment. Some apartment owners may come to this decision after certain period of time, for example, for not being able to rent out the flat or to cover the current expenses.
If at the same moment many people decide to sell their apartments, the large offer will influence the sale prices of the apartments in Prague. Hence if selling - to do it asap to avoid selling on the “panic wave”. If there is any.
Whether you put on pause, rent out for long-term or sell your place, it's important that you do not go bankrupt choosing the wrong option.
Feel free to reach out to me if you want to talk through the options you have that will help you to overcome this uneasy period of time.
Good luck to all of us.
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