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Podcast #02: What factors influence the value of an apartment building?
Could an apartment building be worth tens of millions of Czech crowns more simply because of well-structured rental agreements? Is it worth investing in renovations before selling? And when might holding on to the property be the better decision? These are some of the key questions explored by host Petr Schwank in the latest episode of the Buduj značku podcast. His guest is Lukáš Křenek, Head of Commercial and Residential Real Estate Investments at Engel & Völkers Prague, who shares expert insights into apartment building valuations, property investment strategies, and the factors that influence real estate market value.
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What really influences the value of an apartment building?
Location, property condition, and current real estate market conditions are among the key factors determining the value of an apartment building. However, according to Lukáš Křenek, who has more than ten years of experience in the real estate industry, several less obvious factors can also significantly influence its market value.
One of these factors is rental agreements. While a high-quality, long-term lease can increase the value of a commercial property, certain rental terms in residential apartment buildings may actually limit the pool of potential buyers.
In the podcast, Křenek shares a real-world example of an apartment building with approximately 25 units. The owner gradually restructured the existing rental agreements, which, according to Engel & Völkers' experience, positively influenced the property's valuation-potentially by tens of millions of Czech crowns.
Renovating before selling: Is it worth the investment?
Investing in property renovations does not automatically lead to a corresponding increase in the selling price. Professional real estate investors often have access to their own construction teams and can complete renovations more cost-effectively. According to Lukáš Křenek, their renovation costs can be 20–30% lower in certain cases.
On the other hand, untapped development potential can add significant value to an investment property. This may include converting an attic into residential units, adding extra floors, or developing additional buildings on the land. The key consideration, however, is whether such development plans are legally and technically feasible.
When is the right time to sell an apartment building?
There is no universal answer. Selling an apartment building may make sense for financial, tax-related, or family reasons. However, retaining the property as a long-term investment and generating stable rental income may be an equally attractive strategy.
During the interview, Lukáš Křenek explains why property owners' price expectations can sometimes differ from professional valuations by as much as 100%, how to identify the right buyer, and why your plans for the proceeds from a property sale may matter more than current market conditions.
Watch or listen to the full podcast episode
How can you determine the true market value of an apartment building? Which mistakes could cost property owners millions of Czech crowns? And what determines whether you can find a buyer willing to pay the best possible price?
In this episode of the Buduj značku podcast, host Petr Schwank and Lukáš Křenek, Head of Residential Investments at Engel & Völkers Prague, explore both the financial aspects of investing in apartment buildings and real-world examples that demonstrate why successful property investment decisions involve much more than numbers alone.
Watch the full interview on YouTube or listen on Spotify or Apple Podcasts.
