“Prague has been ranked as one the best three cities in Europe for buying an apartment by foreigners” reports InterNations, one of the largest Internet resources in Europe.
The results of the survey are more relevant to expats, but it is quite possible to apply them to foreigners. What is the difference between expats and foreigners? Which city in the world is the best one for foreigners and why? What should a foreigner pay attention to in order for the apartment purchase procedure in Prague to be a good investment and, most importantly, successful?
The best city in the world for foreigners is Taipei – the Chinese metropolis. The reason for such a high rating can be that since 2012, citizens of European countries are actively exploring the Asian market. In Europe, Prague City gave way only to the German resort town of Aachen. These two cities have similar results in many respects, but the advantage of Aachen is most likely based on the overall wage level in Germany. The minimum wage in Germany as of July 2018 was 1,498 euro, in the Czech Republic – 468.87 euro.
The study was conducted according to criteria that are recognized worldwide as the key ones:
- the final results of the integration to the new environment, most importantly how is that process organized.
- standard of living (in developed countries, the percentage of “food + housing” does not exceed 15–20% of total earnings, the remaining amount is intended for needs that contribute to the development and achievement of goals: studying at a university, traveling, statring business, etc).
- the cost of residential real estate in the country, how does the procedure of buying an apartment in Prague take place and what are the conditions for issuing mortgage for foreigners;
- the number of vacancies that can be considered suitable for foreigners in the labour market;
- quality of medical service, crime rates and even climatic conditions;
- transport infrastructure;
The principal difference between an expat and a foreigner lies in the human nature. An expat was used to be a young man who traveled outside his native country in search of higher pay for his work. He was definitely hated by his colleagues, because he managed to earn twice or even more at the border (some 10-20 km away) of his native country. Today, an expat is considered to be an employee who got a job abroad under a contract for a short period (from 3 to 6 months). Do agree that in the case of buying an apartment in Prague the difference between an expat and a foreigner is not critical and even there isn`t any.
The process of buying an apartment in Prague is unified for non-Czech residents, namely: the purchase of any real estate by a foreigner is not limited if one uses his or her own funds.Concerning mortgage issuing procedure – the Czech banks are unlikely to issue a mortgage to foreigner without permanent residence, even if he has an official income in the home country or in the Czech Republic.
The procedure of buying an apartment in Prague by foreigners
Agree that an ordinary person buys an apartment one or a maximum 2 times in his life. And what is not done repeatedly, can be easily forgotten, and moreover – not everyone has sufficient experience in purchasing real estate. Read here about the perfect apartment for investment in Czech real estate.
It is unlikely that you will be able to buy an apartment for the price much lower than the market one, you need to try to analyze the reasons why is the apartment sold at a reduced price.
The top common mistakes associated with buying residential real estate. So, let’s begin:
- apartment in a panel house. As a rule, apartment buildings from the times of the USSR have poor thermal insulation of the walls and mostly have no solutions of design. But today, most of these houses are being insulated, it is only in the liquidity of real estate, namely, it will be difficult to re-sell it even for 90% of the price.
- buying an apartment on the secondary market can have a lot of “pitfalls”. You are highly recommended to hire the realtor. The realty agency will perform all the actions connected with the purchase. Surely it will cost you in general 1-2 percent of the apartment value but it`s worth that.
- buying an apartment in a cooperative house. It is necessary to read all clauses of the contract carefully, because then it may turn out that the contract contains the clause about restrictions on renting an apartment or some other things not appropriate for the buyer.
- when buying an apartment built after Jan 01, 2009, you are required to have a so-called “energy passport”. It must contain information not only about the energy saving class of the house (for example, C or B), but also approximate calculations of the cost of utility payments for a year.