A recent report produced by the influential Global Property Guide concluded that rents and yields from Cyprus property are “very low” and “taxes on renting are quite high”.
According to their estimates, yield on rental property in Cyprus averaged just 4.7% in 2006, placing it well down the list of the 109 countries surveyed at number 83.
However, Cyprus did do better in their buy-to-let income and long-term investment rating where it came in at number 36.
You can find more information on the Global Property Guide website.
If you are buying investment property in Cyprus, you’re unlikely to get a good return on your investment from short-term holiday lets (unless you have an exceptional property in a good location). You only have to look at the number of properties being advertised to see the sort of competition you’ll be facing. Remember too that you’ll need to advertise & promote your property, furnish it, get someone to clean & look after it for you, make repairs, redecorations, replace breakages and pay telephone, electricity and water bills & local taxes.
If you’re buying a ‘jet-to-let’ property in one of Cyprus’ tourist areas, do not budget on renting it out for more than 18 weeks a year.
Figures released by the Statistical Service of the Republic of Cyprus reveal that tourism has dropped by 12% since 2005. If this trend continues, there will be even fewer holiday makers looking to rent holiday homes.
My advice to property investors is to buy in a residential business area in the suburbs of Nicosia or Limassol where there’s always a steady demand for long-term (one year and more) rentals. Although the weekly rate you achieve will be lower, this will be more than offset by the longer rental period. And your overheads too will be considerably lower.