The numbers across the property spectrum translate well for investor confidence and make for healthy reading.
According to figures, 63 per cent of the visitors to Cyprus choose to holiday on the South eastern coast, with the influx of tourist to the area in 2016 mainly due to the instability in other popular tourist destinations, lack of hotel rooms, demand for private villas are rising in direct correlation to Cyprus’s growing tourist industry.
However, despite this much-needed demand for private villa rentals, it has been well-documented in recent years that construction is not currently fulfilling the demand mainly due to timescales and availability of land in the resorts and towns that make up the South east coast.
This significant drop in construction for the past couple of years has created a chronic supply shortage, together with the increasing issue of ‘unaffordability’ - waves of would-be buyers simply find the cost of home ownership too prohibitive.
The scene is perfectly set and the evidence keeps on pointing towards buy-to-let, whether it be for long term tenancies or holiday rentals.
WHY IS BUY-TO-LET THE PREFERRED INVESTMENT ASSET?
- Better returns than stocks, shares or bank deposits.
- Opportune market conditions and major investments in the pipeline.
- Excellent rental market both short and long term.
- Capacity for both immediate rental income and capital appreciation in the future.
- High tenant demand means both low void periods and higher investor returns.
- Proven excellent returns year-on-year. No specialist knowledge required.
- Relative stability and security of investing in bricks and mortar.
THE BENEFITS OF OFF-PLAN INVESTMENTS
- Significantly less expensive than new-build developments.
- Can stagger the payments.
- Most companies offer an assured rental period after completion.
- Capacity for excellent capital gains.
Buying a property is only the first step on the buy-to-let ladder. You need to ask yourself what will happen when you purchase your property - will you rent it out on your own, or get an agent to do it on your behalf? Many people feel more comfortable in hiring a management company to oversee the property especially with the property being abroad they will also manage the advertising of the property and organising and conducting maintenance and repairs.
Therefore, it is unsurprising that most prefer to use a professional lettings and management company to take on these responsibilities on their behalf. Lettings agents take away a huge proportion of worry for landlords, dealing with the day-to-day management of the property, including: finding and fully referencing tenants, collecting rent, as well as liaising with tenants on behalf of the landlord and organising any due maintenance and repairs on the property. The fee for a lettings agent is on average between 10-15 per cent of the property’s monthly rental value, which many landlords think is a small price to pay for peace of mind and less hands-on work. However, if you are considering going it alone, be sure you are familiar with of the procedures, regulations, and maintenance required to be a hands-on landlord.
BENEFITS OF USING A LETTINGS AGENT
Managing a property yourself can be time-consuming and can often be a headache. But using a professional lettings agent takes away this responsibility, as they are responsible for:
- Conducting viewings for all potential tenants and taking bookings
- Drawing up comprehensive tenancy agreements
- Putting the tenant’s deposit in a secure protection scheme.
- Collecting rent from the tenant and carrying out regular rent reviews.
- Conducting all necessary checks on the property and making sure it complies with all relevant regulations.
- Sourcing qualified professionals to conduct any necessary maintenance issues within the property
DO’S AND DON’TS OF PROPERTY INVESTMENT
Before analysing the do’s and don’ts of the property investment market, be sure to know the answer to all the major considerations surrounding your future investment. Firstly, you will have to decide what you want your investment to yield - is your priority generating instant rental returns, or using your property investment as a vehicle for wealth accumulation in the long-term? There are many different reasons for investing in property, so before you invest be sure you know your individual investment strategy.
DO’S AND DON’TS
Before you take the step into the buy-to-let investment world, make sure you compile a checklist of vital things to consider. These include:
- A basic understanding of the buy-to-let and rental market in Cyprus.
- An idea of what kind of tenant you want to attract.
- Knowing the basic responsibilities of being a Cypriot landlord, and what this entails.
- A rough calculation of how much it will cost to buy and manage a buy-to-let property, while considering financial risks from potential void periods.
- Finding a property in a suitable location with high rental demand.
- Think of buy-to-let as a medium to long-term investment.
- Seek advice from a reputable property investment company on local market demands.
- Get your sums right, and also seek the advice of an accountant.
- Decorate, fit out and furnish your property to the highest standards, in order to attract the best tenants and ensure that your property is let quickly every time.
- Have a strategy in place for the entire lifecycle of your investment, to ensure that your property is fulfilling your expectations and yielding the results you want.
- Let personal taste cloud your judgement - be sure that the property you choose meets market requirements, not your own.
- Purchase anything with potential maintenance problems, as it will add nothing to the rental value, and will cost a lot to maintain.
- Think that the running of an investment property to let can be left to friends or relatives in your absence - tenants require a full management service, and this is often a full-time responsibility.
- Be sure to leave all documentation to a professional and experienced agent.