Cyprus-Forum.com

[charliechoice]

Hi everyone,
I am new to this forum, and please forgive me if this question has been posed before, but my good wife and I plan to move to Cyprus within the next three years. In the meantime we have decided it would be beneficial, to purchase an apartment, to rent out so that we can get a foothold on the property ladder for when the big day arrives. What I would appreciate is good advice on which area would be most suitable, we would prefer a coastal location, the likes of Paralimni have been mentioned but is this too far inland? Any suggestiond would be much appreciated.

Regards Charlie

[Svetlana]

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Hi Charlie

Your question begs a dozen other questions; are you looking to invest for rental income or equity growth? Over what timeframe do you see your investment? How much do you wish to invest?

Paralimni is too far inland for investment; Protaras is too quiet in the Winter for maximum rental returns. I woul dsuggest you look to Nicosai/Limassol for long term letting or Paphos for short term holiday lets.

Lana

[charliechoice]

Lana,
many thanks for your reply, and apologies for being so vague with my question. To be more precise our plan is as follows,
To purchase a suitable house/apartment to rent out for the next few years which will hopefully offset the loan repayment and also gain in value so that when we are ready to make the move in 2/3 years time we will either be able to sell or keep the apartment. Our budget at this time would be a maximum of 40,000cyp pounds, a modest amount I know but these properties are available if you look hard and long enough. The answer to your other query is ideally we would like use of the property ourselves on the odd occassion and would therefor prefer renting as a holiday let. Hopefyully in 2/3 years time we can sell our home in UK along with the property in Cyprus, which would enable us to purchase a permanent residence in your beautiful country.

Regards Charlie

[Svetlana]

Hi Charlie

I am afraid any property you can buy here for 40,000 pounds will not attract much rental income; it is likely to be in a spot where toursist will not want to stay or be in a poor state of decoration.

Realistically, you need a budget 60,000+ pounds to find something you will be able to let.


Anyway, I wish you well with your plans and eventual move.

Lana

[macketterry]

Hey, Charlie, why don't you consider buying in the beautiful north? Prices are half what they are in the south and the people and scenery are much nicer. And before anyone gets their backs up about 'Greek' land - let me say this: there are some excellent choices from pre-74 Turkish land here - starting from about £50K Sterling!

[Svetlana]

Pre- 74 Turkish or foreign properties/land tends to be very expensive - and because of administrative measures - are very hard to identify now.

Lana

[charliechoice]

Hi Mackettery,
This is something I have considered, however as I do not know all the legal implications, Southern Cyprus seems a much safer bet. Having never been to the north of the island,, I can't really comment on it's beauty, but if you say it beats southern Cyprus it must be pretty damn good ! So thanks for your opinion, but I think I will continue to look to the south for my investment.

Regards Charlie.

[macketterry]

Pre- 74 Turkish or foreign properties/land tends to be very expensive - and because of administrative measures - are very hard to identify now.

Lana

Expensive? Compared to what? You can buy a 130 m2 three-bed villa on pre-74 land for £115K sterling - that's what you'd pay for a one bed flat in Paphos! So I'm not sure what you mean Lana.

Administrative measures? You mean that officially all land is 'TRNC' so no distinction is made? True, all official deeds 'look' the same but your lawyer can access the original history of the deeds at the land registry and can confirm or deny their origins. Plus you can cross-check this at the land registry on the Greek side.

[macketterry]

Hi Mackettery,
This is something I have considered, however as I do not know all the legal implications, Southern Cyprus seems a much safer bet. Having never been to the north of the island,, I can't really comment on it's beauty, but if you say it beats southern Cyprus it must be pretty damn good ! So thanks for your opinion, but I think I will continue to look to the south for my investment.

Regards Charlie.

I respect your views, Charlie, but don't let your ignorance of the realities of the situation do you out of a good deal - after all we're talking about your hard-earned cash here. Think about it, if you buy some of the best real estate now at rock bottom prices with rock solid title deeds, you will be in a win-win situation regardless of how the Cyprus property mess goes. If the Greek Cypriots get all their land back and a quarter of a million people are evicted you win because your deed is yours and yours alone. And if nothing ever happens you win because you bought something for 50% cheaper than people are paying just 15 minutes drive away.

[nhowarth]

Hi Charlie,

> a suitable house/apartment to rent out for the next few years which will hopefully offset the loan repayment and also gain in value

The main problem you're going to have is competition - there are hundreds if not thousands of holiday apartment owners looking for tenants. As for prices, new holiday units in Paphos retail around CYP 1,200/sq.m. You may be able to buy a small studio unit for CYP 40,000, possibly a one-bedroom unit.

Over the past 2 years, the price index has moved up by just over 10%. Assuming it continues in this direction most of any profit you make from the sale will be swallowed up in the cost of sale (agents fees plus legal fees - say 7%) plus the cost of cancelling your contract of sale with the developer another 2% (unless you're extremely lucky and manage to complete on your purchase by the time you want to sell).

Oh, I almost forgot, you'll also be liable for Capital Gains Tax on any profit you make.

Regards,