October 1, 2008
Inside Cyprus
There’s been a bit of a buzz recently in the financial world concerning “Buy to Let” properties. If you didn’t really understand fully what this really means well the title itself reveals that you just buy a property and then let it out. It is quite a simple principal really, but you must always calculate that your monthly rent will fully cover the monthly mortgage payment.
Traditionally you would have the same rental income on a monthly basis but if you were to do the same with a holiday home then you would then get staggered monthly rental income depending on the season. So if you were to find such a holiday home in Europe, where could you invest in a property where the holiday season lasted the longest. Well that would be North Cyprus which boasts some 300 sunny days per year with a high season that lasts an amazing seven months. So you can see that North Cyprus is the place to get the best profits and even more than a traditional “Buy to Let”.
To make things totally clear I am going to give you a real working example from start to beginning in order to explain just how you can reap the benefits from a “Buy to Let” property investment in Northern Cyprus. A rental villa in Northern Cyprus will cost about 250.000 Euro, so in order to start the reservation possess you will need to pay 3000 Euro. After that you will still have to pay 25% of the total amount, so including the initial holding fee, you will then have to pay a second amount of 72.000 and the rest on signing the property deeds.
So then it’s just a question of financing the remaining 175.000, so have a good look at whatever credit options are available with a fine toothpick. If you are able to find a mortgage that offers interest only payments, then take it as this will greatly reduce you monthly mortgage payments. With the current Bank interest rate in Euroland set to remain around 5%, your monthly payments will work out at about 800 Euro per month, almost 10.000 Euro per year.
The statistics available on rental income in Northern Cyprus show that properties can be let out for up to 10 months per year. So if we put the property we have just bought into the equation, we can expect an amazing 2600 Euro. in the high season and an awesome 1500 Euro. over the low season PER MONTH.
So if we go into a little fine detail on the property we have just purchased, let’s calculate on it being rented out for around 6 months over the high season and about 4 in the low season. This you may be amazed to know works out at 21.600 Euro rental income in your pocket. Well you will have to appoint a property management company to take care of your payments such as community charges, but this won’t be more than 1000 Euro a year. Are you beginning to see why property investment in Northern Cyprus sounds interesting?
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