Updated 30/09/2026
Buy-to-let flat or an ETF? A comparison on real numbers
Which earns more: a mortgaged flat, or the same money in an ETF? Return, risk, effort, liquidity and taxes in Czechia in 2026, with calculations for a flat in Brno and in Prague.
Anyone with a million or two crowns in the bank usually ends up choosing between a buy-to-let flat and index funds (ETFs). You can borrow to buy a flat; an ETF is simpler and more liquid. Which of them earns more can be calculated, but the answer depends heavily on how flat prices develop.
How we calculate the comparison
A fair comparison has to put exactly the same money into the ETF at the same moments as into the flat: the own funds and purchase costs at the start, and then every monthly top-up by which the rent falls short of the mortgage payment and costs. At the end we compare net wealth: for the flat, the sale price after costs and tax minus the remaining mortgage; for the ETF, the value of the portfolio. This is also how Výnosometr calculates the "Wealth: flat vs. ETF" chart.
For the ETF we assume a return of 6 % a year. The MSCI World global equity index returned an average of 6.5 % a year in 1969-2023 (geometric average), with large swings from year to year.
Results for two flats
Both flats: 20 % own funds, a 30-year mortgage at 5.2 %, a sale after 10 years and rent at the city average. The Brno flat is 55 m² for 5.5 million CZK, the Prague flat 50 m² for 8.5 million CZK.
| Annual flat price growth | Brno: flat vs. ETF | Prague: flat vs. ETF |
|---|---|---|
| 4 % (default assumption) | flat ahead by 1.37 million CZK | flat ahead by 0.80 million CZK |
| 2 % (inflation only) | roughly even | ETF ahead by 1.35 million CZK |
| 0 % (prices stay flat) | ETF ahead by 1.19 million CZK | ETF ahead by 3.15 million CZK |
The flat wins if prices grow at least a little faster than inflation. The Prague flat, with low rent relative to its price (a gross yield of 3.3 %), depends on price growth far more than the Brno one (4.7 %). At 2 % growth, the Prague flat would already trail the ETF by more than a million crowns.
What the numbers do not capture
| Buy-to-let flat | ETF | |
|---|---|---|
| Leverage | yes, a mortgage of up to 70-80 % of the price | usually not |
| Diversification | one flat, one city, one tenant | thousands of companies around the world |
| Liquidity | a sale takes months and costs 3-5 % of the price | you can sell in a few minutes |
| Effort | tenants, repairs, tax return | almost none |
| Volatility | prices are not marked to market daily, so you do not see the swings | drops of 30-50 % are common |
| Tax on sale | exempt after 10 years (flats acquired from 2021) | exempt after 3 years, or on sales up to 100,000 CZK a year |
| Ongoing tax | on rental income, often zero in the first years thanks to interest and depreciation | none on accumulating ETFs |
When a flat makes sense and when an ETF does
- Flat: when you buy below market price, the rent is above average relative to the price (a gross yield above 5 %), you have a reserve for the top-ups and the daily ups and downs of shares bother you more than dealing with tenants.
- ETF: when you want to invest smaller amounts regularly, need access to your money at any time, do not want to deal with tenants, or the flat would depend mainly on rising prices.
- A combination: many investors hold both. The flat provides leverage and rental income, the ETF spreads risk and provides liquidity.
The calculator runs the comparison for a specific flat: set the "Alternative investment return" field to the return you expect from an ETF, and the "What if…" table shows how the result changes with slower price growth.
Sources
- Portu: Patience as the best investment strategy (MSCI World 1969-2023, in Czech)
- Porovnejfondy: Income tax on investments 2026 (in Czech)
- ARROWS: Taxation of investment income 2026, the holding-period test (in Czech)
- Jordà et al.: The Rate of Return on Everything, 1870-2015
This text is indicative and does not replace tax, legal or financial advice. For binding decisions consult a Czech tax adviser. · Privacy policy · Terms of use ·