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The Cyprus Informer
You may have heard of "Buy to Let" quite a lot recently on the financial section of Sky news and be wondering what this really means. Well it's not too complicated as it implies, you buy a property and then you let it out. The only trick in order to do this successfully is to let the property out for more than your monthly mortgage payment.
Traditionally you would have the same rental income on a monthly basis but if you were to do the same with a holiday home then you would then get staggered monthly rental income depending on the season. So if you were to find such a holiday home in Europe, where could you invest in a property where the holiday season lasted the longest. Well that would be North Cyprus which boasts some 300 sunny days per year with a high season that lasts an amazing seven months. So you can see that North Cyprus is the place to get the best profits and even more than a traditional "Buy to Let".
The best way to show you the ins and outs of a "Buy to Rent" in Northern Cyprus is to go over a real property investment and this one concerns a a 250.000 Euro villa with sea view. You need just 3000 Euro to hold the villa followed by a 75.000 (25%) Euro deposit which includes the initial holding fee to finalize the proceedings before signing the final deeds.
So then it's just a question of financing the remaining 175.000, so have a good look at whatever credit options are available with a fine toothpick. If you are able to find a mortgage that offers interest only payments, then take it as this will greatly reduce you monthly mortgage payments. With the current Bank interest rate in Euroland set to remain around 5%, your monthly payments will work out at about 800 Euro per month, almost 10.000 Euro per year.
There are figures available in Northern Cyprus that show that a rental villa has an average rental activity for 10 months of the year. For a 250.000 Euro villa in Northern Cyprus you can expect an average of 2.600 Euro per month in the high season and about 1.500 Euro in the low season.
To best thing to do now is get out you calculator and start to work out just how much rental income can be generated from a villa in Northern Cyprus. With an average 6 month high season and 4 month low season rental income you would total up a staggering 21.600 Euro annual gross profit. To see what is exactly left in your pocket, you just deduct the 9.600 Euro mortgage payments and about 1.000 Euro fees in property management. My calculator now shows 11.000 Euro of net profit in rental income for a "Buy to Let" villa in Northern Cyprus. Sounds interesting?
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