Buying property in Cyprus as an investment
The unique location of Cyprus makes this island very attractive for investors. On the one hand, Cyprus is a large business center in which the interests of European entrepreneurs merge with the interests of Eastern businessmen. On the other hand, Cyprus is a resort island. The wonderful climate, clean beaches, low crime rates and excellent infrastructure attract here both a lot of tourists and those who would like to receive income from renting out real estate.
Investing in Cyprus real estate is suitable for those for whom the reliability of investments is more important than high profitability. On average, the island’s residential and commercial real estate is growing at a price of 5-7% per year. Leasing it can bring another 3-5% of the profit annually. The main advantage of Cyprus is the continuous flow of tourists, both from Europe and from Russia. At the same time, despite a considerable number of hotels, the demand for rental housing still exceeds supply, especially in the budget real estate sector.
However, in recent years, a new trend has emerged when a large company or several families rent a villa or premium class apartments together, which allows them to live in excellent conditions at a relatively low price. In this regard, the profitability of real estate at this level has grown to 5% per year.
The greatest demand is for modern housing, equipped in accordance with the latest comfort requirements. This means the availability of necessary household appliances, climate control systems, windows with mosquito nets, durable and comfortable furniture, as well as the availability of dishes and bedding. Tourists arriving on the island put comfort and sanitation at the forefront. Without compliance with these requirements, renting an apartment in Cyprus will be difficult.
Selecting an object for rent
Buying property in Cyprus allows you not only to invest reliably, but also, subject to a number of conditions, to obtain a residence permit and even island citizenship. In all these cases, when choosing a villa, house or apartment, you will have to take into account the requirements of the law.
If you are counting only on rental income, then you should pay attention to the popular resorts of the island. Each of the major resort centers has its own “face”. Ayia Napa is more like the “golden” youth. Paphos is preferred by calm and wealthy tourists from Europe and Russia. In Limassol, accommodation is rented by fans of inexpensive holidays, and Larnaca is popular with the middle class and families with children.
Of course, the choice of real estate is determined only by your preferences, but renting a luxury villa in Ayia Napa is easier and more profitable than an inexpensive apartment, while the same villa in Limassol will be empty most of the time.
When choosing and buying a house or apartment in Cyprus it is better to use the services of an experienced realtor and a real estate lawyer. This will save you a lot of unpleasant surprises and help you quickly complete all the formalities associated with the purchase.
Features of Cyprus law
In accordance with the laws of the island, the owner of the property can lease it both in the short and long term without special permits. However, at the stage of purchase it is worth considering one nuance. All residential property in Cyprus is divided into two large groups – the one that was built before the end of December 1999, and the one that was built later.
All objects of the first group are protected by the law on rental control, which was the result of the Turkish occupation of Northern Cyprus. Tenants of such facilities enjoy special protection against eviction. For the owner, this means many problems: it is impossible to change the rent, it is very difficult to make repairs or redevelopment, that is, it is very difficult to worsen or improve the living conditions of tenants, making tenants take care of real estate, and even more so, it is almost impossible to evict them.
All houses that are considered to be built in 2000 and later are not subject to this law. In this case, the communications of the owner and tenants are governed by the rules of civil law of the island.
A correctly drawn up lease is your only defense in case of disagreement with tenants. If you want to profit from your investments in real estate, an experienced Cypriot lawyer must necessarily participate in the preparation of the contract. The key points of the contract are:
The right of the tenant to sublet the property or make changes in it at his own discretion without the consent of the owner.
The presence of a deposit – a pledge that ensures the interests of the owner in the event of damage or in case of unilateral termination of the contract. You must also indicate the amount of the deposit and the conditions for its return / non-return.
The procedure for paying utility bills – who should pay for them, how and in what time frame.
Description of the rights of the lessee and the owner, as well as their obligations in relation to each other and the leased property.
Description of the condition of furniture, premises and household appliances, which may be attached to the contract.