As a popular tourist destination, Prague has experienced a high demand for short-term rental accommodation options like Airbnb.
Some people believe that owning a property for this purpose can be profitable, but it’s crucial to understand the business before diving in.
This article will examine the advantages and challenges of owning an Airbnb property in Prague, based on real-life experiences and insights from Nick Marley, who manages over 40 Airbnb flats in the city.
What’s the ideal property for Airbnb?
To attract guests and secure bookings, your property should ideally have a comfortable size and a functional layout. Studio and one-bedroom apartments are popular choices, as they cater to solo travellers and couples.
Properties with multiple bedrooms and kitchen areas can also be popular, especially with families and groups of friends, as that’s typically something hotels can’t offer.
Location is key though, with apartments in or near popular tourist areas like Old Town, Mala Strana, and Vinohrady being highly sought after. The key is to get as close to the center as possible. You might be surprised to know the Žižkov area around like Husitska street or near Zizkov stadium does better than JZP, for example.
How do you fit out and price your Airbnb?
Setting the right price for your Airbnb can make or break its success. Researching comparable properties and factoring in costs such as utilities, cleaning, and maintenance is crucial.
If you do it well, expect an average occupancy rate of 70% across the year with summer being the busiest time and February and November being the least busy.
Ensure your property is well-equipped with modern appliances, comfortable furniture, and stylish decor to appeal to discerning guests. When people are on holiday, most like to experience something they don’t have at home so if your property can accommodate it, consider luxury extras such as a jacuzzi or sauna.
Definitely do not try to get away with cheap beds, bedding, and cleaning.
How can you keep your neighbours on side?
One challenge that Airbnb property owners face is managing relationships with neighbours. Noise complaints, security concerns, and overcrowding can sour relationships and even lead to legal disputes. To mitigate these issues, establish clear house rules for guests and maintain open lines of communication with neighbours.
You could consider installing sound monitoring equipment which notifies both the guests and yourself if the noise gets too much.
What’s the best way to handle check ins?
Handling guest check-ins and check-outs can be time-consuming, but it also provides opportunities to create memorable experiences for your guests and therefore boost your ratings, which is invaluable for getting more bookings.
Self-check ins are common but impersonal and don’t allow you to get a feeling for who your guests might be, let alone give personalized tips that will help create those memorable experiences. It also makes it a lot harder to set expectations with your guests around things such as parties and noise.
What kind of return on investment can you expect?
While owning an Airbnb property in Prague can be lucrative, it’s essential to manage your expectations. Factors like location, property quality, and competition can impact your return on investment (ROI). A realistic estimate for ROI on an Airbnb property in Prague ranges from 4% to 7%, depending on various factors.
Compared to buying a property for the purpose of long-term rent, Airbnb can net you about 20% more on a small apartment. However, the bigger the apartment you buy, the more you can make on it, sometimes up to 100% more, while also benefiting from a lower cost per square metre.
What are the biggest challenges you might face?
Owning an Airbnb property in Prague comes with its fair share of challenges. Navigating local regulations and tax obligations can be complex, with recent changes in legislation requiring short-term rental property owners to register with the city and adhere to specific guidelines. Additionally, property owners must navigate the day-to-day challenges of managing guest expectations, handling maintenance, and addressing unexpected issues that arise.
An example of an unexpected issue, according to Nick, are guests who rent the properties for the specific purpose of partying. During the pandemic lockdowns, he had guests bring their own DJ and equipment, somehow manage to bypass the noise monitoring equipment, host a party… and then upload it to YouTube!
In conclusion, owning an Airbnb property in Prague can be rewarding but to make a success of it, it’s essential to be aware of potential challenges and stay informed of the local market to make sure you’re being competitive.