Basic property purchase cashflow model for Prague, Czech Republic
Currently investing in property in the Czech Republic is very attractive, both due to short and long term factors.
Below we outline a basic cashflow model for buying a typical apartment in Prague (in CZK).
3,000,000 – purchase price
85% – mortgage LTV
2,550,000 – mortgage amount
25 years – mortgage term
1.7% – mortgage interest rate
10,440 – mortgage payment/mth (repayment + interest parts)
3,613 – average interest part of the mortgage/mth
12,000 – rent/mth
1,560 – gross cashflow /mth (assuming no fees, taxes, insurance, maintenance)
8,388 – net gain/mth (inc repaying the mortgage)
As you can see by buying a typical apartment in Prague with gross rental yields around 4-5% and mortgage rates under 2% its clear to see the investment generates positive income (even if part of this goes into paying off the mortgage).
Further factor in the capital growth rates of the market and Prague becomes a no brainer as a property investment location (see more reasons here).