Tomáš Hrec: old Prague buildings as a new business with surprises

About six years ago, while discussing the renovation of residential buildings with Real Luxembourg founder Radek Slabihoud, Tomáš Hrec was sure that everything in Prague had already been refurbished. Inspections from the inside shattered that illusion, and today, as the company's commercial director and partner, he builds a business on old buildings.

From the street, Prague's tenement buildings looked as if renovation was long behind them, the flats had been subdivided years ago and no other opportunities remained. Inside, Hrec found neglected buildings with old utilities and housing that did not meet modern requirements. These are exactly the properties the company looks for in long-established city districts: it buys them, renovates them and then sells the individual apartments. It wins on addresses where there is little room for new construction.

Age is no guarantee

According to Hrec, a building's age alone does not make it a good investment. “The result depends on the condition, the renovation costs and the agreement with the former tenants,” he says on the podcast. One of the most delicate topics of the conversation is dealing with previous tenants: Hrec describes how the company negotiates with them and how the human side affects the economics of the whole project.

He also explains his approach to renovation. “I don't think you can simply buy, freshen up and sell today,” he says, adding that renovations are tailored to future owners: someone looking for a home for themselves thinks differently from an investor counting on rental income and from someone planning to hold the property for the long term.

What else the podcast covers

The episode discusses the risks of investing in city apartment buildings, the line between a profitable renovation and an overly expensive adventure, the speed of a project from signing the reservation agreement to selling the last apartment, the difference between buying your own flat and investing through a fund, and Real Luxembourg's growth plans. The full version is available in the Forbes BrandVoice podcast with Tomáš Hrec.

By the Around Prague newsroom