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And then there are Buy-to-Let Mortgages in Cyprus

During the final stages of the island's property boom, offering buy-to-let mortgages in Cyprus became one of the final sales gimmicks before the oversea property market's collapse.

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If you're considering Buy-to-Let, mortgages are not the way forward

 
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Normally at this stage, you'd find a finely-crafted set of projections showing you how much profit your little £20,000 investment could make during the course of just eight years, if only you take out a buy-to-let mortgage and let the Cypriot property boom take care of the rest.

Instead, you're finding a warning, because the Cypriot property rental market is overflowing with too many homes. There are still ways and means to make money though.

 

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Buy-to-Let Mortgages in Cyprus

Is there still any mileage at all in taking out buy-to-let mortgages in Cyprus?

In a word: NO

Simply put, the optimistic predictions about mortgage costs, property expenses, running overheads, and rental returns put together by most overseas property websites just don't add up. In most cases, occupancy rates tend to be creatively overestimated, while running costs are blatantly underplayed.

For example, you can certainly still furnish a one bedroom apartment nicely enough with the sort of sums most agencies are talking about in their buy-to-let sales spiel, but the fact is that whether you're dealing with long-term tenants or a bunch of holidaymakers, your furniture will be lucky to survive for three years, let alone eight or ten.

 

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So is the Buy-to-Let market dead altogether?

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Not at all...

These days, the property buyer must adapt to the changing face of the holiday rental market if he or she wants to gain an income from letting out homes.

The Bad News is that funding your new rental venture through buy-to-let-mortgages in Cyprus, in the United Kingdom, or from anywhere else for that matter, is simply not a viable option any longer.

The Good News is that there's still a substantial income to be made, if only one owns the right holiday homes(s) for the relevant venue.

If you want to know what the right holiday home is, you have to do a little reading.

The problem with most overseas home buyers is that they'll take estate agents at their word without bothering to do any kind of research of their own, and subsequently end up buying the wrong piece of real estate for their needs. This is especially true where homes bought for the specific purpose of holiday lettings are concerned.

Let's face it a moment; someone booking a two week family holiday in the sun wants rent a property with everything close to hand. They want to open their front door, and step onto a beach; preferably a beach lined with plenty of restaurants, bars, and other entertainments. What they do not want is to be stuck in a farming village in the middle of nowhere.

In the latter stages of the Cyprus Property Boom, a great many British buyers developed a strange fixation with "Investment Properties in Sotira, a charming little village just five minutes from the beach, close to Larnaca airport, and only a short distance from the resorts of Ayia Napa, Paralimni, and Protaras". As a result, Sotira experienced a rush of British investors taking advantage of the huge opportunities presented by the little village.

These days, Sotira is filled with for-sale signs, and a lot of British home owners wondering what provoked them into buying investment real estate there in the first place.

You see? Sotira isn't five minutes from the beach, it's three and a half miles from cliffs. Larnaca airport isn't close by, it's an hour away. And the village may only be a short distance from the aforementioned resorts, but you're traveling along little country roads, so it takes over ten minutes just to get to Paralimni. In short, it's not what you might call an ideal holiday rental location. And yet, a large number of buy-to-let buyers thought they could make huge returns through holiday lettings in Sotira, just because developers and estate agents told them so.

So what's the answer? Get some good advice, and then spend a few hours doing the necessary research yourself. Target popular resorts, stay reasonably close to known tourist beaches, and make sure the properties you're looking at have plenty of amenities and entertainments nearby. And lastly, whatever you do, don't be afraid to pay a little more for something that's perfect, instead of a little less for something that's just OK.

A perfect case in point is one holiday home being administered by our rental arm, a fully-featured, sumptuous 4 bedroom villa with private pool, just a stone's throw from Nissi Beach in Ayia Napa. The selling price on this amazing home is €500,000, which may sound like a lot until you consider the fact that its peak-season rental price stands at €1,600 per week, while during the off-season it's renting for €1,000 per week. What's more, it's almost constantly booked between the middle of April and the end of September, with quite a few bookings during the rest of the year too.

If you're really serious about investing in buy-to-let, mortgages, even at today's low interest rates, will simply eat up too much of your profits. So this approach is really only feasible if you're in a position to purchase the home in question outright.

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Thinking of Relocating?

You could do a lot worse than taking a look at moving to Cyprus, despite the fact that the island's slow-paced, sun-soaked approach to life doesn't seem to be everyone's cup of tea, no matter what overseas estate agents may say.

The simple fact is that while the Republic of Cyprus may well be a veritable paradise to some people who move here, the comparatively low wages and its oldfashioned ways of life make it a very frustrating place to live for others. But of course, this can be said for any country.

Once again, it pays to do some research and inform yourself, rather than simply take an estate agent at their word.
Read more...

 

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