Guide to buying investment property in Cyprus
Cyprus is becoming increasingly attractive to overseas property
investors with the buy-to-let property market now accounting for more than 25%
of all sales.
However, the 'traditional' investment market has concentrated on the increasingly over-developed tourist sector – and short and medium term returns on jet-to-let properties are beginning to fall.
In some areas it's possible to get a gross income from your investment in the region of 4%-6% of the property's value. However, the value of a property is not necessarily the same as its purchase price and you will not achieve such a high return everywhere!
Buy-to-let holiday home market
Unless you have an exceptional property in a good location, you're extremely unlikely to get a good return on your investment from a short-term holiday let. You only have to look at the number of buy-to-let properties being advertised to see the sort of competition you'll be facing. Remember too that you'll need to advertise & promote your property, furnish it, get someone to clean & look after it for you, make repairs, redecorations, replace breakages and pay telephone, electricity and water bills & local taxes.
If you're buying an property in a tourist areas, do not budget on renting it out for more than 18 weeks a year.
Figures released by the Statistical Service of the Republic of Cyprus reveal that tourism has dropped by 12% since 2005. If this trend continues, there will be even fewer holiday makers looking to rent holiday homes.
Buy-to-let residential property market
A more sensible property investment strategy for Cyprus is to buy a property in one of the residential suburbs of Nicosia or Limassol where there's a steady demand for long-term (one year and more) rentals. Although the weekly rate you achieve will be lower, this will be more than offset by the longer rental period. And your overheads too will be considerably lower.