When Jim Bradshaw purchased a turnkey three bedroom unit in Prague 2 he was ecstatic. True, Jim lacked the language skills, familiarity with the Czech Republic banking system and procedures, or the time required to fully investigate his options and leverage his self capital to a multi-unit property. Besides, Jim incorrectly assumed that as a non-EU resident he would not be eligible for a mortgage in any event.
Still, the personal connection that had linked him up with the apartment had assured him he was getting a real bargain – even though the purchase was made entirely with self-capital.
And at first, that seemed to be the case. True, the apartment was vacant for two months before he secured a tenant, but Honza, the friend who had helped him purchase the apartment assured him that Terez, the tenant, made a good impression and had a steady job. Unfortunately, the friend received an employment opportunity outside of Prague and so was unable to continue to deal with issues relating to the apartment on a regular basis. However, Jim was also favorably impressed with Terez and assumed he would be able to manage issues relating to the apartment in cooperation with her, with Honza chipping in if any crisis came up.
This assumption was soon put to the test, when a water pipe burst, not only forcing Terez to temporarily vacate the flooded apartment, but resulting in the downstairs neighbor demanding Jim pay for the damage to his own apartment, damage Jim only became aware of two weeks after the fact, when the infuriated neighbor banged on Terez’s door. Jim, uncertain of his position, accepted the inflated assessment provided by the downstairs’ neighbor’s plumber, and put the cost down to learning pains.
He found it more difficult to retain his sangfroid when the pipes burst, again, two weeks later. Unable to contact the plumber who had made the original repairs, Jim frantically called Honza, who put him in touch with someone else. The second plumber’s verdict was that the entire unit’s piping system was so badly degraded it would need to be fully replaced at astronomical cost- and that the apartment would need to be vacated for the duration of the renovation. Jim briefly considered using the opportunity provided by the crisis to carry out a full scale renovation, but balked at the thought of coordinating this by remote control, and he could hardly spare the time to fly to Prague to set things up. So Jim paid up and cajoled Terez to return once again when repairs were complete, promising her to compensate her for her troubles.
Repairs complete, and the apartment reoccupied, Jim tried to focus on his day job and family, both of whom had suffered from the his need to manage affairs over a 7 hour time difference. That was when the COVID-19 pandemic broke out of China, and with it eliminated any shred of spare time Jim had to play remote control landlord. That perhaps explains why it took Jim three months to notice that no rent was being paid on his apartment. After contacting Terez, who like him was under lockdown, it became clear that they recalled his promise to compensate her for the inconvenience caused by the burst plumbing and repairs quite differently. Besides, Terez added that the pandemic had caused her to lose her job, and noted that her security deposit should be able to cover most of the arrears. Which she still did not think she should need to pay.
Security deposit? Jim could find no record of this, and Honza would not return his calls. And of course, he could not fly to Prague to handle matters personally, and was uncertain of his legal situation.
By the time Jim contacted us, Terez had already vacated the apartment (she never did pay her rent). After performing a thorough inspection, we immediately began marketing the unit, simultaneously taking care of additional critical repairs revealed by the inspection. Within two weeks we had a list of prospective tenants, screened them, and sent a signed contract, including security deposit details, to Jim.
Mission accomplished?
No. We don’t fire and forget – but stay on top of managing Jim’s assets in Prague month by month, day by day, hour by hour. Jim has since purchased another single unit apartment, as well as a multi-unit building, both leveraged with low interest loans, with our assistance, and rests content that he is leaving a steady and reliable investment for his children.
