We have written about properties built under the built-to-rent model several times on our blog in the past. The name says it all – built for renting – and that is exactly the philosophy of developers who venture into BTR projects.
How does a BTR flat differ from a classic investment flat?
If a development company decides already at the planning stage that the project will target the BTR market, this brings several specifics. Such flats are typically not offered to individual buyers at all in the first phase; the developer will try to sell as many units as possible in B2B mode. That is, business-to-business, to another company interested in letting them out. It may also happen that the flats will be let for, say, the first ten or twenty years by the developer itself, either directly or with the help of a property management company. In both cases, however, the website of such projects will be very modest and you would look in vain for detailed information about individual units on it.
BTR properties are often sold to institutional investors, sometimes even at a volume discount
The description of the competitive advantages will differ as well – while in a B2C sale the developer will emphasise the wide range of services in the neighbourhood, general amenities or an excellent location, in the BTR segment the key role is played by financial indicators (however much they are of course derived from the quality of the property and the location). Put simply, a classic investment flat will be chosen from the offer of an estate agency or directly from a developer, and your “competition” will be other buyers looking either for an attractive investment or for a property to live in themselves. In the BTR segment, by contrast, your counterparts are mainly institutional investors from among financial groups or investment funds.
RTL is not a TV channel, but a new housing standard
Especially among the older generation, the abbreviation RTL may evoke the name of a private German television station (with the somewhat confusing name Radio Télévision Luxembourg, as it started out in Luxembourg in the 1980s), which could also be tuned in across large parts of our country. In the context of rental housing, however, RTL is short for the ready-to-live standard, which we could translate as “ready for living”. And ideally straight away. Think of such a flat as a kind of hotel room equivalent in which you have truly everything you need. The moment you receive the keys, you will find anything you can think of inside – even kitchen utensils. And if by chance something is missing, there is someone who can make your wish come true. Those interested in RTL housing very often come from the ranks of so-called expats, i.e. employees of foreign companies who come to Prague for a year or two. They have very little motivation to spend their precious time buying glasses at IKEA. And at the same time, they expect to move again within a few months or years.
With RTL properties it really is enough to grab your wallet, phone and toothbrush and you can move in straight away
However, RTL flats are attracting growing interest among Czechs as well – for instance those who commute between working from home and in the city. It is therefore very common for ready-to-live projects to offer a significantly wider range of services. This may include a gym or wellness centre right inside the building, and a 24/7 reception desk is more or less standard these days. A large proportion of tenants in RTL properties are also interested in services such as laundry or regular cleaning. This relates to their socioeconomic status and the value of their work, or rather their free time. RTL properties are also characterised by the high quality of workmanship, the materials chosen and the smart technologies installed. They do not necessarily have to be new buildings – conversions of older apartment houses into RTL flats are taking place even in the historic centre of the capital.
Avoid unpleasant surprises
Whether you are on the tenant or the landlord side, it is definitely useful to know both of these terms and to be able to work with them. At the same time, we strongly recommend that if you are pursuing such a property (in any role), you carefully check the structure of the operating costs. While some BTR/RTL landlords reflect the cost of additional services directly in the rent, elsewhere applicants may be unpleasantly surprised by high service charges running into several thousand or even tens of thousands of crowns a month. So be prepared, not surprised! Do you have a vacant property in your investment portfolio that you are now considering letting out? We will be happy to explain what the services of a professional property manager involve and how our Partner and Garant programmes can give you peace of mind and a regular, guaranteed flow of income. Contact us on +420 277 000 330 or at sales@flatservice.cz to find out more!
