30% rental returns guaranteed!

Scam AlertI’ve seen many exaggerated claims made by overseas property marketing companies. They talk about the ever-growing number of British tourists visiting Cyprus and offer ‘guaranteed’ rental yields of 30% or more on buy-to-let holiday homes and apartments.

Unfortunately, many people have been duped into believing this marketing hype and have ended up buying property in Cyprus that is both un-rentable and unsaleable.

According to the Cyprus Statistical Service, the number of British Tourists arriving in Cyprus has been in decline for a number of years. In 2001, 1.49 million Brits visited the island, but by 2007 their numbers had dropped to 1.28 million. Over the same period, the number of properties has increased by nearly 86,000.

The fact of the matter is that there are just too many holiday homes available for the number of Brits looking to rent them.

So what sort of rental yields can you expect?

The influential ‘Global Property Guide‘ recently published the results of its survey into rental yields. Currently, their survey covers Paphos, Larnaca and Limassol.

As you will see from their charts presented below, guarantees of rental yields of 30% per annum are completely worthless!

Larnaca Rental Yields

Source: Global Property Guide

Limassol Rental Yields

Source: Global Property Guide

Paphos Rental Yields

Source: Global Property Guide

If you’re planning to rent to holiday makers, you should apply to the CTO for a licence (but I understand you will not get a licence if you have less that 5 properties). You can get around this issue by using a Cyprus registered holiday letting agency.