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Investment potential of property in North Cyprus

02 February

One of the main reasons for buying property, especially abroad, is to generate income.

 

In recent years, North Cyprus has seen a growing demand for real estate. Due to the steady growth of tourist flow and stable demand for real estate, the resale or leasing of new real estate in North Cyprus brings significant income (quite often in a short time). Besides, property in North Cyprus is 2-2.5 times cheaper than in other Mediterranean countries. Moreover, the quality of construction is always on top. 

 

Today we will consider the possibilities of generating income from the rental of real estate.

Property rental prices in North Cyprus are growing every year due to:

-the influx of tourists, which is increasing by an average of 4.3% annually;

– the number of international students, which has tripled since 2006.  

 

Types of properties rentals in North Cyprus:

  • Short term rent. It is the most profitable option for renting a property with a yield of 10-12% per annum. These are resort facilities, relevant during the tourist season, which is one of the longest in Cyprus (from April to November). 
  • Long term rental. This type of lease is relevant for urban facilities, especially when universities are nearby because students are the main tenant. Also, it is expected that in the next five years will double the influx of students. Urban real estate is in high demand in cities such as Famagusta, Kyrenia, and Nicosia. The income is estimated at an average of 6-7% per annum. The main advantages are that the contract is concluded for at least one year, with an advance payment of the lease for six months.
  • Guaranteed rental. Also relevant for resort real estate. Many developers in North Cyprus provide this type of lease under certain conditions. Depending on the residential complex and the type of real estate, the guaranteed payment ranges from 7% to 10% per annum. The owner transfers the apartment to the management of the company and receives his guaranteed income.