Bloomberg Businessweek (North America)
You can get a castle for a song—so what if the drawbridge creaks and the moat leaks?
▶ A Czech brokerage listing only historic buildings racks up sales ▶ “This is a business for dreamers and enthusiasts”
The Libejovice chateau looks like something out of a 19th century romantic novel: an elegant, mustardhued Renaissance palace with tall windows and elaborate balcony railings bearing the noble Schwarzenberg family's coat of arms. Natalia Makovik will sell it to you for less than the price of some Manhattan studio apartments. The catch: Restoring the place, a two-hour drive south of Prague, could cost 10 times the purchase price. “I look at a ruin, and I see an investment opportunity,” says Makovik, founder of VIP Castle, a real estate brokerage specializing in historic buildings.
There are plenty of such opportunities in the Czech Republic, with its 2,000-plus castles and chateaux, the legacy of a turbulent history of feudal lords, royal dynasties, and minor aristocrats. Makovik started her business in 2007, eight years after she arrived penniless from her native Belarus. The history buff had fallen hard for the run-down castles she discovered in the Czech countryside. Lacking
the money to buy one, she decided to make them the focus of her career— first as a tour guide and then as a real estate agent. Although it took Makovik more than five years to close her first deal, she says she now sells up to three historic properties a month, priced from €12,000 ($13,000) to €4 million. She typically takes a 3 percent commission, which last year earned her about 4 million Czech korunas ($161,000). The 400 or so properties she lists range from relatively modest brick and stone manors to palatial expanses with gardens, ballrooms, and enough beds for the ball guests to sleep over. Because many of the properties are owned by municipalities, she travels the country speaking with mayors and town representatives. Typically it takes months of meetings to persuade officials to sell what many consider a part of their local heritage.
Makovik faces competition from international real estate companies such as Century 21 and Re/max, which are adding more historic properties to their portfolios. She says she has an edge as the only company focusing exclusively on such buildings. And with her background, she says she can better relate to her clients—mostly wealthy Russians or Ukrainians looking to park their money abroad. “To sell a castle, you have to be more of a psychologist than a real estate agent,” she says. “It can take years to cultivate a client and find the right property.”
Lenka Duskova, a broker from Luxent, an agency that specializes in high- end homes in and around Prague, says selling castles is a challenge. Clients love the idea of living in an elegant historic manor, but it doesn't take long before they balk at the costs of renovation and shy away from the realities of living in the biggest building in a tiny Czech town. “It's not an investment,” Duskova says. “This is a business for dreamers and enthusiasts.”
In 2010, Sergei Chernichkin, a