Cyprus And its Buy-to-Let Property Culture in 2020
As the Cyprus property market looks set to recover in 2020, a recent survey has revealed that many full time and part time landlords on the island still believe the buy-to-let market represents a worthwhile investment.
For any business savvy investor, buy-to-let properties can be a secure and relatively stable asset return which can open opportunities for various visa schemes within Europe too.
More specifically in Cyprus too in popular localities such as the Famagusta region. The current tourist hotspots are towns of Ayia Napa and Protaras with their blue crystal waters and stretching golden coastlines; Cyprus has reached a point where holidaymaker demand is surpassing supply in the form of hotels and resorts in the peak summer months.
This ‘new’ method of leasing which is (in most circumstances tax free) has encouraged investors and villa owners to opt for this type of investment in Cyprus, as a fairly low maintenance income which can give a net return of approximately 10%, depending on the property value.
The full extent of the issues under this new method of investment in Cyprus have not fully been identified as it has never been this prevalent before. Shared houses are becoming an increasingly popular choice to keep rental prices down between tenants such as university student accommodation; neighbouring houses in a Limassol Nicosia district of Cyprus has experienced the negative effects of shared accommodation first hand; noise complaints and various offensive situations from his student neighbours.
As well buy-to-let purchasing increases both the leasing and purchasing price of average property prices in the area.
How can the negative experiences of the buy-to-let culture be mitigated?
Rented properties require a CTO (Cyprus Tourism Organisation) licence if let for periods less than one month long. If you are a tenant or home owner and are having disturbances from properties being let on a short term basis, you have a case for appeal by reporting it to the CTO.
Knowing this information, you can then write a letter to the letting agent and the property owner stating that you are seek a not to let order after suspicions that the property is being illegally rented.
Benefits of Buy-to-Let popularity
This is a profitable business for investors; the government and tourist industry looking at the projected income from foreign currency increased spend.
Villas to let often cost less than typical hotel accommodation and can also help the local establishments (as they have to spend in supermarkets, and often have a higher budget for drinking, eating out, and other activities).
Based on the Hoteliers Association report, around 20% of foreign visitors do not stay in hotels. So out of the three million tourists Cyprus receives per year, approximately 600,000 will use the villa to let properties. This is indeed a large annual figure; bringing with them both positive and negative aspects on the quality of life of residents and long term economy.
Of course, this type of lease is not unique to Cyprus, however it is raising universal feedback and concerns. This current renters market will continue as an increasing alternative to hotels and resorts as long as Cyprus and other popular traveller destinations have a shortage of tourist beds.
For any investment or buy-to-let enquiries in Cyprus contact us, we have local property experts that would be happy to assist.