Currently investing in property in the Czech Republic is very attractive, both due to short and long term factors.<\/p>\n
Below we outline a basic cashflow model for buying a typical apartment in Prague (in CZK).<\/p>\n
3,000,000 – purchase price<\/p>\n
85% – mortgage LTV
\n2,550,000 – mortgage amount
\n25 years – mortgage term
\n1.7% – mortgage interest rate
\n10,440 – mortgage payment\/mth (repayment + interest parts)
\n3,613 – average interest part of the mortgage\/mth<\/p>\n
12,000 – rent\/mth
\n1,560 – gross cashflow \/mth (assuming no fees, taxes, insurance, maintenance)
\n8,388 – net gain\/mth (inc repaying the mortgage)<\/p>\n
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).<\/p>\n