It’s not difficult to see why Cyprus remains one of the top tourist destinations in Europe with over 1.6 million people visiting the eastern Mediterranean isle between January and August 2008 according to the Passengers Survey. It is not only loved by thousands of holiday makers but by second home owners and also by expatriates who all choose Cyprus because of its inimitable climate, it’s fantastically relaxed pace of life, the standard of living and ultimately the beauty of Cyprus. You can add to these positive factors that stack up in Cyprus’ favour the fact that it is a low tax island, it’s a member of the EU, has a thriving business environment and its banks are in a much better position than those in much of the world with domestic banks reportedly having EUR6.5 billion more in deposits than in loans, due to investments in the nation’s banks by foreign companies. Furniture Limassol
Because of the health of Cyprus’ economy and international business environment and the undeniable attraction of the island as a tourist destination, Cyprus is also equally popular with buy to let property investors from around the world. The banks in Cyprus have made borrowing to buy second homes and investment properties possible, and the long and short-term rental markets are both healthy which makes the island an enduring choice with domestic and international investors who recognise that one can potentially profit from the likes of professionals in the main cities to holiday makers in the main resorts.
If you’re actively contemplating buying property in Cyprus to let out, Martin Pearce from Aristo Developers, an expert on Cyprus real estate, has the following top tips for would-be buyers: –
- Determine the demand for your particular chosen property type – i.e., if you’re thinking of buying a seafront apartment, think about the tourism demand for that property. If you’re looking at appealing to golfers year round, which are the best golf properties, or if you want long-term rental contracts, what will the local people or businesspersons who will make up your potential base of client want, and buy a property accordingly?
- With your rental tenant in mind, examine your location carefully, your potential tenant should drive your location choice. For professionals the likes of Nicosia and Limassol are good locations, for families on holiday, what about a frontline villa or apartment?
- Make sure you choose the right type of property. Think about the pros and cons of apartments v town house v villas and remember that different property types attract different tenants so what is right for them, for your chosen location and for you?
- Consider the accessibility of the property you’re buying. If you’re buying for holidaymakers are you within reach of Paphos or Larnaca airport? If you’re buying for a professional, is the central business district easy to get to? Is there good road accessibility and is the property within reach of required and desired amenities?
- Be realistic about your potential rental income. Think carefully and do research into what you can expect the property to rent for on and off peak if it is a tourism property, and think about whether you will be able to cover your repayments and costs even if you have no tenants for a period of time. By being realistic from the outset you avoid potential problems in the future.
- When furnishing a rental property for short-term tenants you need to think about comfort v wear and tear. Which is the tenant market you’re aiming for – if you want youngsters or families then the furniture may take more knocks than if you’re letting longer-term to city professionals. Whatever furniture you use to furnish the property, ensure you write out a full itinerary before renting out the property each time.
- Consider using a management agency to look after your property in Cyprus if you won’t be living within easy reach of it. This will cost you money but potentially save you both time and even more money in the long run.
- Remember to get the right type of insurance cover in place and always take a deposit from your tenants.
- Also remember your tax liability – whilst Cyprus is a tax competitive nation, if you earn an income from your investment property you will have to report that and potentially pay some tax on it.
- Finally think about advertising the property – i.e., how are you going to promote your property to potential tenants? You have local options, international options and of course online options. Think about making the most of all of these – as the more people hear about your property, the more potential tenants you will have.