With Cyprus earmarked as one of the investment hotspots for 2007, leading ‘for rent by owner’ holiday home site, www.holiday-rentals.co.uk surveyed its owners in order to quantify the actual rental return on investment potential buyers can expect. According to the results, owners manage to rent out their Cyprus holiday homes for 18 weeks per year on average, providing a 6.3% RoI, based on the average purchase price of £134,000 and the average rental rate of £470 per week*.
Cyprus has long been an investment favourite with Brits and its imminent adoption of the Euro in 2008 could make it an even more attractive choice, as interest rates fall to align it with the eurozone and make borrowing cheaper.
Offering higher gains than France or Spain and more stability than Bulgaria, Cyprus could provide a safe and lucrative alternative for those looking to buy foreign property in 2007.Ross McGowan, sales director, www.holiday-rentals.co.uk commented, “The number of properties in Cyprus listed has increased by over 40% since 2005 and by nearly 240% when compared to 2004.
The site now lists 795 properties in Cyprus, including 72 in the Turkish North. With tourism booming and a reputation for attracting repeat visitors, a buy-to-let investment in Cyprus is still a great bet as rental demand continues to outstrip supply.”He continued, “Advertising on the Internet is the most cost-effective way to rent your property and ensure you get the maximum return on your investment. In the past, you would have needed to employ a management company, who can take up to 30% of profits.
By advertising online and managing rentals yourself, you can cut out the middleman and keep all of that 6.3% return for yourself!”The results of the survey by www.holiday-rentals.co.uk also support the fact that capital growth in Cyprus has been high.
The majority of owners bought between two to four years ago and of those who said they knew the current value of their property, 40% said it had increased between 30-60% and 30% said it had increased between 10-20%. The factors believed to have played the most significant role in the rise were Cyprus’ imminent adoption of the Euro and the fact that tourism is growing by around 7% per year.
The average purchase price respondents had paid was £134,000, with 40% having personally financed the purchase, 33% taking mortgages against their main residence and 27% holding a mortgage in Cyprus. The vast majority said the rental potential in Cyprus was one of the most significant factors in their decision to buy there, with 16% saying it was the most influential factor. The reasonable cost of property and economic performance were also significant influences.
In terms of owner profiles in Cyprus, 36% are between 41-50, 32% between 51-60 and 15% between 31-40 years old. The over 60s represented 13% of owners. The vast majority are married and either employed full time, or self-employed, managing the rental of their property themselves in their spare time. Over a third have a total household income of less than £50,000 per year, however a fifth earned £61-£80,000 and another fifth £100,000 or more per year.
Over and above the financial merits of investing in Cyprus, there are numerous other reasons why it’s a great place to buy a holiday home. With over 340 days of sunshine per year, it’s a year-round destination and English is widely spoken on the island. There is lots of development going on, including new golf courses and marinas, which will further improve facilities on the island in the coming years.
Cyprus also has a high standard, but relatively low cost of living, low taxation and low crime rates. Is it any wonder the Brits are in love with Aphrodite’s Isle?
Fore more news on Cyprus Properties please visit http://www.cyprus-online.com/buy-sell/cyprus-news.html
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