What should you take into account when purchasing an Airbnb apartment in Prague?

In our previous article about Airbnb we revealed a well-known secret to you: renting out apartments via Airbnb results in a higher return in investment than purchasing apartments for long term rentals. In Prague renting out assets to serve Airbnb is considered very popular for two reasons:

• 1. Unlike other places in the world, renting apartments in Prague through Airbnb is completely legal

  2. Tourist use of Airbnb apartments only increases from month to month.

But with the increased demand also comes increased competition. Therefore, in order, to be placed high in the Airbnb site you must be defined as a Superhost- in order to receive this brand it must meet the following criteria:

• • The apartment must have a track record of being rented out at least 10 times via Airbnb

  • The apartment must have a 90% response rating of the residential experience in the apartment.

  • Most of the responses (over 80%) must be at a 5 star level.

  • No cancellations were registered after reserving the apartment

In addition, by virtue of being “Superhosts” you will receive benefits such as: a 100$ coupon for hosting in another country, payment of a very lower commission in compared to other Airbnb apartments- and sometimes also a professional photography of the apartments by one of the Airbnb Photographers.

So how do you do it?

Tip 1- location, location, location

Select an apartment in a god touristic location. In Prague this includes the following locations: close to the Old Town Square (square where the Prague astronomical clock are), by the Czech Opera house, adjacent to the Municipal House, on the riverbanks, near the Prague Castle or by the Charles Bridge. Furthermore, note that proximity to public transportation stations, for example the metro, the tram or the bus stations will only increase the value of your real estate property.

Tip 2- industrial espionage

Tourists love renovated and well-designed apartments. Visit apartments in Prague whose owners are defined on Airbnb as Superhosts and do a little research. How does their apartment look? What have they done to win the sought after title? What was written in their reviews? For example : if a given apartment won high grades thanks to a coffee machine or parquet floors- go for it. In fact, a very small investment is sufficient to transform your apartment into a smashing successes.

Tip 3 – Management Company

In order to retain the attractiveness of the apartment over time, you must select a good management company that specializes in this type of asset. The reason for this is that this is a unique rental property which requires a unique style of management, including, for example, cleaning after every short rental period, management of the guestbook, damage control and repair and so forth. In Prague, these management companies charge 20-30% of your profits but you will still be left with more than enough profits in hand- a good and well managed Airbnb rental apartment generates a return on investment of between 8-12 percent a year.

Are you considering purchasing an apartment? Please make use of our experience.