Cyprus Rental And Resale Property Prices
I was recently contacted by a Cyprus property owner that wanted to know why potential clients were contacting him with rental offers below his published rates. My response which applies to both Cyprus Rental And Resale Property Prices was as follows:
What I would say is I do not know anyone that has bought property in recent years that covers their total outgoings by renting the property out. Well I know one guy and that is because he has advanced SEO skills and devotes a large proportion of his time to sourcing tenants for his properties. That person is me. I bought 30 properties at the peak of the market and I have REALLY struggled to cover the mortgage costs on the properties. That is as a qualified mortgage broker, Management Accountant, full time property sourcer / investor and the advanced SEO skills.
Each individual’s circumstances are different but at the end of the day there is a market rent for any given property at any given time and generally this has little bearing on the market value or mortgage costs of the property. Rental prices in the UK have started to increase slightly in recent months as demand for rental properties is on a steady increase and supply is limited. This increase though is just recovering some of the fall in rental values over the previous years. However in Cyprus supply is far in excess of demand and rental values continue to fall.
€1.5m villas currently rent for €1,500 per month i.e. just 1.2% GROSS yield for the property owner. As I said I don’t really know anyone that covers their outgoings on rental (unless they bought many years ago when property here was cheap or they paid a cash deposit of 40%+).
Please don’t be offended by the comments above and I am not trying to patronise you.
Many of the enquiries you get come from Cypriots in Nicosia and as ‘locals’ they know very well the position with over supply and empty apartments. Admittedly they pay below the values offered by foreign nationals but this is because they could drive to and from Nicosia every day during the summer rather than pay what they consider to be excessive rental costs. Some Cypriots in Nicosia earn a good living but the average wage in Cyprus is VERY low (some say average €8,000 to €10,000 per annum), hence the low prices when renting to them.
Ideally you should be renting to Russians, Germans and Brits etc as they certainly pay more than the Cypriots. Unfortunately supply of apartments far outweighs demand from foreign nationals. In peak months demand is quite reasonable and even Cypriots that have left it late to book an apartment have to bite the bullet and pay a reasonable cost for the rentals. The dilemma for property owners though is do you turn away the rentals until the last minute (say late April or early May) but then risk the apartment being empty over the summer because everyone has already booked elsewhere. It is a fine line between obtaining maximum rental income and receiving no rental income and I have no solution to this dilemma.
Cyprus Rental And Resale Property Prices
Cyprus rental and resale property prices in 2011
There will always be someone cheaper than you if you are looking to sell or rent you property in Cyprus, perhaps they have a larger mortgage or are simply more motivated to sell or rent their property than you are. It doesn’t mean you have to match or better their price and if you did their greater motivation would simply drives the prices even lower. Establish a sensible price based on average prices of comparable properties and make your property stand out from the rest. This is why we offer our clients the option to have HD video footage with their property listing as there are still very few property portals, especially in Cyprus, offering this feature.
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