Buying Investment Property in Cyprus

Buying Investment Property

Buying Investment Property in Cyprus?

Looking to buy investment property in Cyprus? It’s a sound choice, yet one that must be executed correctly. This article tells you about buying investment property in Cyprus, the types of deals available and the likely returns. Remember, buying property in Cyprus has, on average, yielded in excess of 8% returns per year, and significant capital asset growth.

Property Investors in Cyprus have received a lot of Government and economic support. Much of this support has come indirectly in the form of the lowest interest rates in history. This has been bad news for savers, but of course good news for those buying investment property in Cyprus using mortgages.

Buying investment property in Cyprus with cash outright is also a sure fire hedge against any rise in interest rates. Some investors look to buy properties in need of renovation or a change of purpose. They then renovate those properties and rent them out on a long term or short terms basis.

Once these properties have been renovated and rented then investors in Cyprus may refinance the property by taking a mortgage over the property at a higher value, using the income to pay the mortgage and reinvesting the profit from the deal into more property in Cyprus or elsewhere.

How easy is it to make money from buying investment property in Cyprus?

Guess what? It may be unsuprising to learn that this model is an absolute pain the backside for potential property entrepreneurs in Cyprus.

Which properties in Cyprus should you buy? What areas of the Cyprus housing market are going to give the best returns? Do you know the planning application process with the council? Or about the change of use regulations?

The question you have to ask your self about buying investment property in Cyprus is how hands on you want to be?

If you want a new career as a developer or property project manager then go for it.

If, like thousands of other investors you simply want to take advantage of the UK property market, and earn more than the poxy interest rates available from the so-called people’s banks on the Cyprus High Street then there are many investment funds, not readily available to the general public.

If you want a new career as a developer or property project manager then go for it.

If, like thousands of other investors you simply want to take advantage of the UK property market, and earn more than the poxy interest rates available from the so-called people’s banks on the Cyprus High Street then there are many investment funds, not readily available to the general public.

Map of Cyprus

Cyprus , officially the Republic of Cyprus, is an island country in the eastern Mediterranean Sea south of the Anatolian Peninsula. Continentally, it is often placed alternatively in Western Asia while being culturally tied to Southeast Europe. It is the third-largest and third-most populous island in the Mediterranean, and is south of Turkey, east of Greece, and west of Syria. Its capital and largest city is Nicosia.

The earliest known human activity on the island dates to around the 10th millennium BC. Archaeological remains from this period include the well-preserved Neolithic village of Khirokitia, and Cyprus is home to some of the oldest water wells in the world. Cyprus was settled by Mycenaean Greeks in two waves in the 2nd millennium BC. As a strategic location in the Eastern Mediterranean, it was subsequently occupied by several major powers, including the empires of the Assyrians, Egyptians and Persians, from whom the island was seized in 333 BC by Alexander the Great. Subsequent rule by Ptolemaic Egypt, the Classical and Eastern Roman Empire, Arab caliphates for a short period, the French Lusignan dynasty and the Venetians was followed by over three centuries of Ottoman rule between 1571 and 1878 (de jure until 1914).

Cyprus was placed under the United Kingdom’s administration based on the Cyprus Convention in 1878 and was formally annexed by the UK in 1914. The future of the island became a matter of disagreement between the two prominent ethnic communities, Greek Cypriots, who made up 77% of the population in 1960, and Turkish Cypriots, who made up 18% of the population. From the 19th century onwards, the Greek Cypriot population pursued enosis, union with Greece, which became a Greek national policy in the 1950s.

The Turkish Cypriot population initially advocated the continuation of the British rule, then demanded the annexation of the island to Turkey, and in the 1950s, together with Turkey, established a policy of taksim, the partition of Cyprus and the creation of a Turkish polity in the north. Following nationalist violence in the 1950s, Cyprus was granted independence in 1960. The crisis of 1963–64 brought further intercommunal violence between the two communities, displaced more than 25,000 Turkish Cypriots into enclaves: 56–59  and brought the end of Turkish Cypriot representation in the republic. On 15 July 1974, a coup d’état was staged by Greek Cypriot nationalists and elements of the Greek military junta in an attempt at enosis. This action precipitated the Turkish invasion of Cyprus on 20 July, which led to the capture of the present-day territory of Northern Cyprus and the displacement of over 150,000 Greek Cypriots and 50,000 Turkish Cypriots. A separate Turkish Cypriot state in the north was established by unilateral declaration in 1983; the move was widely condemned by the international community, with Turkey alone recognising the new state. These events and the resulting political situation are matters of a continuing dispute.

The Republic of Cyprus has de jure sovereignty over the entire island, including its territorial waters and exclusive economic zone, with the exception of the Sovereign Base Areas of Akrotiri and Dhekelia, which remain under the UK’s control according to the London and Zürich Agreements. However, the Republic of Cyprus is de facto partitioned into two main parts: the area under the effective control of the Republic, located in the south and west and comprising about 59% of the island’s area, and the north, administered by the self-declared Turkish Republic of Northern Cyprus, covering about 36% of the island’s area. Another nearly 4% of the island’s area is covered by the UN buffer zone. The international community considers the northern part of the island to be territory of the Republic of Cyprus occupied by Turkish forces. The occupation is viewed as illegal under international law and amounting to illegal occupation of EU territory since Cyprus became a member of the European Union.

Cyprus is a major tourist destination in the Mediterranean. With an advanced, high-income economy and a very high Human Development Index, the Republic of Cyprus has been a member of the Commonwealth since 1961 and was a founding member of the Non-Aligned Movement until it joined the European Union on 1 May 2004. On 1 January 2008, the Republic of Cyprus joined the eurozone.

What are Property investment funds

These funds are hidden in plain sight. A global network of nods and handshakes at the Rotary club or on the Golf Course. Some people refer to these private investment vehicles as hedge funds or REITS. However, they are not. These are the funds that wealthy individuals and families invest in to get richer.

The barrier to entry to these exclusive clubs is around £50,000 although do remember that these private investor funds have collectively trillions of dollars under management.

And no, these funds are not available at the bank in Cyprus, nor are they covered by the FCA. Your IFA or Accountant won’t bring you the opportunities because of course they won’t receive their greasy commissions.

Investment funds are not even allowed to advertise so you’ll never hear of them unless a friend recommends them.

If you don’t know about these firms, and opportunities then these investments aren’t for you.  You will need at least some experience with previous investments to be eligible and of course they are extremely picky about the investors they accept. They can afford to be. They don’t need your money, but they can put your money to work for you like never before.

Some of these funds don’t invest in property at all. You’ll know them as hedge funds. However, there are a considerable number of Asset backed Investment vehicles delivering significant income and long term growth.

Top three international investment properties realtors in the UK and Cyprus

Physis Realty

Apollo Asset Management

The Carlyle Group

Is buying property investment in Cyprus a good idea?

The top three actively managed funds directly significant offshore funds into the UK market seem to think so. Of course there’s much speculation about whether rates will rise and the uncertainty around buying property investment in Cyprus. One fact remains often overlooked though, during the frantic and heated investment discussions around the dining tables of Cyprus

Many individuals and families in Cyprus want a safer, long term investment. They realize that property is a relatively illiquid investment and they simple was a property secured investment that provides a nice balance of income and capital appreciation.

Many people looking at buying investment property in Cyprus have plenty of business and investment initiatives already in play, whether it be in Cyprus, further afield or in a safer offshore investment fund.

Types of investment property in Cyprus

It is important to understand the main types of property investment in Cyprus

  • Undeveloped land in Cyprus
  • Greenbelt land in Cyprus (speculative investment)
  • Brownfield land around Cyprus (and apply for planning)
  • Commercial property in Cyprus
  • Direct Booking Vacation rentals in Cyprus
  • Residential real estate property in Cyprus
  • Operating property investment in Cyprus
  • Distressed property investment in Cyprus

Types of property investment deals in Cyprus

The main types of property deals in Cyprus are:

  • Buy to let in Cyprus
  • Buy to hold
  • Serviced Accommodation in Cyprus
  • Old Peoples Homes
  • Car Parks
  • Commercial Property in Cyprus
  • Buy to change purpose

Buy to let in Cyprus

A buy-to-let mortgage is a mortgage loan designed specifically for this purpose. Buy-to-let is the process of buying an investment property in Cyprus that is specifically let and is one of the most common types of mortgage in the UK and many other countries. Obviously buy-to-let in Cyprus does not have to be done with a mortgage and the sector does attract a significant number of cash buyers.

The purchase – to – rental of real estate is usually a residential property in Cyprus, but some terms also include a small number of commercial properties, such as office space and retail space. As with a lease, the benefits of buying a rental property in Cyprus as a landlord can include the ability to build up assets as house prices rise over time, as well as the benefit of a low interest rate.

The main risk is that a landlord may borrow to buy the property in Cyprus, expecting the house to be sold at a higher price later, or that rental income will cover or exceed the cost of the loan.

Once the price has fallen, this lever could push the landlord into negative equity and, if he cannot meet the terms of his mortgage repayment, the bank will try to take possession of the property and sell it to get the money he borrowed. Banks in Cyprus can lend to both landlords and tenants, suggesting that the capital is being used for investment rather than rental income, as a professional investor might do.

Buy to hold in Cyprus

Long-term rental property in Cyprus is widely considered one of the best ways to diversify your property portfolio. So buying and owning property means much more than just investing in a single property, it can bring you a variety of benefits, such as access to a variety of investment opportunities and the benefits of long-term ownership.

While some investors in Cyprus may be confused or intimidated when they start, buying and owning property can be one of the best investments you can make if you do your due diligence before you start.

Buying and owning real estate is an investment strategy for investors in Cyprus who buy and hold real estate over a long period of time. The owner usually intends to sell the property later, but leaves it to you to help you buy or finance it.

The rental income from the property in Cyprus generates short-term income that can be used to pay off a mortgage or to invest money. The strategy of buying and holding property is one of the most common investment options.

The value of the Cyprus property will increase over time and the investor will benefit if he is willing to sell it later. The investor benefits from being bought in the expectation that the value of the property will rise over time.

Investors considering a Cyprus property purchase and holding strategy should do their best to calculate the potential income from renting out the property. The bottom line is that monthly income should exceed the cost of rent in the first year of ownership and annual rental income over the next five years.

If the investor plans to sell the Cyprus  property later, possible profits should also be taken into account. Finally, any losses from taking out a mortgage or other type of property financing must be taken into account, as well as any gains from the sale.

Convert Cyprus property to Serviced Accommodation

For property investors in Cyprus, converting a home into a serviced apartment would mean higher rents than the normal rent increase. As a result, many people are buying investment property in Cyprus and then converting these homes into serviced apartments to maximize yield.

The types of property used for serviced accommodation in Cyprus are often the same as those you would use to buy to let. Where you have a guaranteed short-term rent, it’s not as rigid as renting out a property.

Disadvantages of investing in Serviced Accommodation in Cyprus

  • Serviced accommodation is more of a business strategy than a property strategy, and the workload is far more intensive. Seasoned veterans liken serviced accommodation investing in Cyprus to the same as running a traditional bed and breakfast. It’s no surprise that the other name for Cyprus serviced accommodation is a holiday let.
  • You’ll need to furnish your serviced accommodation in Cyprus
  • You’ll need to clean the rooms and change the sheets every time your guests leave.
  • Who does all the laundry?
  • Who does all the cleaning?
  • Who’s going to do all the work for you?
  • How are the guests actually going to get in?
  • Massive Payments to Online Travel Agents
  • Are you going to have somebody to do a meet and greet?

Buying investment property in Cyprus to convert into serviced accommodation or holiday lets is not really considered an investment, because the amount of work involved make it a full time job.

Buying Investment Property

Buying Investment Property in Cyprus