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Can i still make money in Southern Cyrpus

Discussion in 'Cyprus Property' started by PyramidJames, Feb 27, 2008.

  1. PyramidJames

    PyramidJames New Member

    I am looking to invest in Southern Cyrus, I am purely looking to make money on the property not use it for a holiday home, I am considering a 1/2 bed apartment, is there still money to be made if I buy now or have I missed the boat???. I am talking to a local overseas sales company who are offering me a 1 bed apartment in larnaca/Limissol for £140.000 off plan to be completed in 2010; they are predicting I will see a 20-30% return over the next 3-5 years. They are also telling me I will cover my mortgage payments over the next 3-5 years from rental income.
    I have read some other threads where there seems to be mixed views, some say get in now there’s still good money to be made, some say the bubbles about to burst, I would really appreciate some good advice from somebody who knows the market I am very concerned about making the wrong investment.


    Thank you

    James
     
  2. Aegean

    Aegean New Member

    If you search online you will see prices are falling there - best to get on the ground and if have cash you will pick up a bargain.
     
  3. PyramidJames

    PyramidJames New Member

    I am currently being offered a 1 bed apartment on a high quality site for £140k, i am concern thats to high to make money on? are you saying prices are going down not up?
     
  4. grumpy001

    grumpy001 New Member

    Not necessarily up nor down, but dont allowed yourself to be "sold". You should be "buying" on your terms. The numbers quoted are all on the high side, check out nigels website, or pm me.
    cheers
     
  5. PyramidJames

    PyramidJames New Member

    would love to know more, whats my best move into southern cypus or should i look elsewhere? i have property in southern spain but its now saturated
     
  6. Aegean

    Aegean New Member

    As I said have a look on the ground - You will pick up some bargains as many Brits are moving out. The price you said appears very high to me.
     
  7. Lysos

    Lysos New Member

    There is a glut of new build apartments. If you really want to invest then as has been said before, get your [email protected]~e over there and check things out on the ground. You should be looking at long term rental potential, not short term holiday lets. There are thousands of properties for sale, so choose carefully and go for a resale (with title deals). Ignore all agent's claims about R.O.I.
     
  8. Nigel Howarth

    Nigel Howarth Member

    You need to appreciate that some people will promise you the earth to achieve a sale - unfortunately, some value the money in their bank account rather than their good name and reputation. See if you can persuade them to guarantee that amount in your contract of sale - you'll get a different story :(

    Forget the short-term holiday market – there are too many properties chasing too few holiday makers; focus on the long-term market (one year or more).

    Look at apartments in residential areas that are relatively central, not densely developed with apartments, reasonably quiet and close to local amenities such as schools, shops, etc. And avoid buying an apartment in a block with shops on the ground floor. Budget on spending around 175,000 sterling for a decent 3 bedroom 150 sqm apartment.

    Cheers,
     
  9. sonia36

    sonia36 New Member

    My experience

    Hi. Im Sonia. I joined this site to gather information regarding investment in Egypt but was looking though the Cyprus thread and wanted to let you know how I got on with my Cyprus investment. I bought a 1 bed apartment in Limassol at the end of 2003 for approx £40,000. It was a resale apartment and not a new build, but was in excellent condition and was sold fully furnished. The first year I attempted holiday rentals and got no-where - I think we had only 3 bookings that year and two of those were family members! The second year we contacted a couple of agents and offered the apartment for long term rental - within a week we had a tenant (who has now been there for 3 years) who pays us approx £250 per month - although this is not a fotune it costs us nothing to keep the apartment - all bills are covered by the tenant except service charge/maintenance but the rental covers this. We had the apartment valued by a couple of local agents this year who said the price would now be approx £60-65,000. It is clear that locals can afford to rent the apartments provided you understand that it will be for a minimal amount - albeit sufficient to cover your own outgoings... obviously larger amounts of money can be made from holiday rentals but in my experience these are both difficult to obtain and more hassle than they are worth - for example there is the cost and inconvenience of having to get the apartment cleaned every time it is rented. And you are of course then responsible for all your own bills (including electricity and when the air con is switched on constantly in the summer months this is not cheap!!). Im not an expert on the property market however I can offer advice on some of the more basic things like rental and the buying process if anyone wants to PM me :)
     
  10. Nigel Howarth

    Nigel Howarth Member

    Hi Sonia

    You're getting a good rental on your 1-bed apartment.

    We moved over here in 2002 and rented a 3-bedroom house in Episkopi (about 15 mins out of Limassol) for two years while ours was being built. We were paying CYP 250/month (excluding utility bills).

    I don't know if you're planning to sell your apartment, but one of the property advertising agencies here says it has 25,000 on its books (that's more than they build here in a year). It's OK having a paper value of £60-65,000, but whether you'll be able to find someone willing to offer you that amount is another question.

    The only European counties that saw property prices rise last year were Malta & Cyprus. One of the local pundits predicts a 20% reduction in Brits buying property here in 2008 and a slight drop in prices by around 10%.

    Some of the developers are getting pretty desperate. One in Paphos is offering buyers a 'free' car - others are offering 'guaranteed rental' (both of which have of course been factored into the buying price).

    The property marketing companies are spreading their nets even wider. As well as Russia, I've recently been contacted by potential buyers living in South Africa, Singapore and Australia!

    Cheers,
     
  11. sonia36

    sonia36 New Member

    Hi Nigel

    The developers are offering free cars?? wow - they must be getting desperate. And 25,000 properties for sale sounds like an enormous amount.. i know when I bought there in 2003 there was a fair bit of new build going on around Limassol but I guess it must have really taken off since I was last there.

    Im not planning on selling any time in the near future.. in fact I do hope to move to Cyprus permanantly one day but at the moment its a question of trying to clear off outstanding debts in the UK before I can even consider it... plus of course there is the small matter of what I would actually do when I got to Cyprus employment wise.

    I have a place in Bulgaria which I purchased 2 years ago off plan and has just been completed - what a nightmare that has turned out to be - it makes my Cyprus experience seem a piece of cake. Although the price has risen around £10k over the last 2 years there is no resale market whatsoever and the rental market is completely saturated. I have absolutely no bookings/interest for this year (including from friends and family who will not be persuaded to go because the flights are so expensive!).

    And as for guaranteed rental - no-one should be taken in by this - I was guaranteed a rental return of at least 15% on my Bulgarian property - now the company cant even find me one rental let alone 15% worth!!
     
  12. Nigel Howarth

    Nigel Howarth Member

    Hi Sonia,

    The 25,000 is just from one company - I hate to think how many there are in total.

    Many people have been duped into buying off-plan holiday homes with the 'promise' that they could flip and make a decent return. A chap living in the middle east who bought five apartments contacted me a couple of weeks ago desperate to sell.

    There is a lot of resale property around at the moment. But the agencies are more interested in promoting off-plan. One pundit here believes some agencies receive as much as 15% from the developers by way of commission, so there's little incentive for them to promote resales on which they receive just 5%. (Also, a number of the agencies are in partnership with the developers and helping to fund the construction).

    Have you tried promoting your property on one of the many holiday home rental web-sites? I also came across a good site with information and advice for those renting property - Lay My Hat.

    Cheers,
     
  13. katharinestavrinou

    katharinestavrinou New Member

    Hi All
    I rent my apartment in Agia Napa by the week in the summer and can rent it by the week for what I pay on my mortgage in a month. In a summer I pay off my mortgage, and can use the apartment for myself in the spring, fall, and winter. It is 50 square meters, has a clear title deed, is fully furnished, and is selling for 50,000 cyprus pounds.
     
  14. katharinestavrinou

    katharinestavrinou New Member

    I think resale is the answer

    I still stand by the idea that resale is the answer to a good property investment in Cyprus. I bought in Cyprus because I had lived there for 20 years, before moving to Norway, and a part of me will always belong there. But I chose to buy in Agia Napa and to buy a resale because the risks are fewer and there are many advantages- resales may come with a clear title deed, will probably have mature and finished landscaping and pool, and so on, and resales are apt to be positioned closer to the sea and town, since much land close to the sea has already been built and newer developments are typically further out or exorbitantly priced. Besides, I didn't have the money for a hugely expensive outlay.

    I decided to rent my apartment this spring and adverstised with holidaylettings in the uk. I have found a really first rate manager who takes care of everything on the cyprus side for me- I can really recommend him to anyone who is interested, and he charges just about 150 Cyprus pounds for a year of management- I made that back in my first week's rent. I got something like 40 requests in the first week after I posted my apartment, and ended up renting it for the whole summer to one party, for enough to pay most of my mortgage for the year. Then just yesterday I got a request for 6 months from May to October 2009, which would more than pay my mortgage for the year.

    I haven't decided to do about this latest request, since I am thinking of selling the apartment- my son is getting ready to go to college and I could use the lump sum. Still, if I don't get the price I want, I think that renting is not difficult in Cyprus and can pay the mortgage. My advice- don't pay so much for a place that you can't cover the mortgage or that you will be hurting if prices stop rising. Other than that, think about places you would like to be yourself, places you can let easily, and good rental management services.
     
  15. christop

    christop New Member

    Hi i do not know who, and where you are all being offered these 1 bed flats from, im buying several 1-2 bed apts in livadhia Larnaka, from 52000cyp and 10% deposits???
    good luck
     
  16. grumpy001

    grumpy001 New Member

  17. katharinestavrinou

    katharinestavrinou New Member

    I just booked two parties into my apartment for September. My online rental service is really good, and my apartment management is fantastic. I had not thought about renting when I first bought, but since I couldn't get to Cyprus I decided on this. I have now made the entire mortgage for the year. We are now thinking we will plan our trips to Cyprus around our bookings, and let the flat pay for itself and more.
     
  18. Davey50

    Davey50 New Member

    cyprus property

    PyramidJames,
    Property sales here are on their knees!
    I should know as I've been trying to sell for nearly 2 years!
    The price you have been quoted for a new build is way too much in this market. DO NOT BE TEMPTED WITH NEW BUILD
    You will be more than likely buy a load of problems and almost certainly will never get your title deeds.

    Speak to ex pats who live here and not the fantasists who call themselves property developers. Cyprus is fantasy island as far as making money out of property is concerned...I urge great caution.
     
  19. Nigel Howarth

    Nigel Howarth Member

    I agree Davey,

    I've just been looking at the Inland Revenue disappointing figures for tax receipts resulting from property sales. No wonder the Government here wants to sell some of the gold reserve.

    Cheers,
     
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