CYPRUS: Now is a good time to start a property investment venture

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It is time (and has been for a long while now) to consider the creation of joint venture companies for real estate investments in Cyprus.


The parameters for such investment are currently positive and we enumerate some of these factors:

·         Interest rates on deposits are practically zero both locally and abroad.

·         Foreclosures are abundant to the extent undertaken by financiers and investment firms who have acquired loans and in many cases sell at reasonable prices.

·        Opportunities appear in certain sectors of Cyprus Real Estate such as residential (apartments) to let, especially in towns and close to universities and colleges showing returns of 4%-6% p.a.

·         Holiday villas and complexes suitable for Airbnb lets show constant improvement and net returns of around 10%.

·         Plots for development land especially near/seaside areas are reducing with the added developments undertaken, even at locations that now seem to be distant from immediate development potentialities.

·         Small office buildings in the region of 1,000-2,000 sqm of a high-tech nature are worth looking into.  Expected average rate of return 5%-7% p.a.

·         Commercial (shop) units be they scattered but in suitable locations such as in the tourist areas and high streets, is something to examine with a return of 6%-8% p.a.

There are plenty of people with excess cash but who may not be willing to invest the total of their hard-earned money in such real estate investments. 

So, budget for around €100,000-€300,000 per participant, depending on the number of participants and the volume of investment.

Aim for a total investment of €2-€5 mln in total and avoid bank loans (be it that bank charges are nowadays around ±3% and not expected to increase soon).

Use excess cash and do not borrow necessarily to get into such ventures and try to join your financial partners with people you know.

Investments of any kind can go wrong and do not forget that a loss may occur.

Things to keep in mind:

·         Make sure the participants of the joint venture have suitable chemistry to cohabit and with no major shareholder, with a maximum number of 5-10 participants and a jointly accepted manager/advisor.

·         Provide an exit date and a period of 5-8 years is suitable.

·         Looking at investment abroad is one option but save London and some other countries (such as Greece, Romania etc) we as Cypriots know little about these countries be it that nowadays with the uncertain political climate there is an increasing interest for such foreign countries for investment from Cypriots.

·         Foreign real estate investments may appear as being more attractive, but  having good management is a problem in many cases with agents not or under- declaring Income, excess charges etc (you may remember the case where the owners/ investors from Cyprus leased an apartment in London, with the owner not knowing that it referred to the apartment he owned.  The agent not only did not declare the income but provided the owner with cleaning and repair bills also (difficult to happen in Cyprus where everybody knows everybody, and it is easy to check).

For the more adventurous and higher risk-takers, examine the possibility of retirement homes (proper ones), small business lets (on the basis of Airbnb) whereas at the top end examine the possibility of milk producers (halloumi etc products) where there is ready demand – but then this is more of a business venture (we set up a souvlakia/kebab investment (take away) in the year 1980 within the City of London and we have expanded with another shop in Manchester-lovely until we realise that our manager was cheating us half of the income.  We sold and got away – but this is what happens if one is not on top of it).

Setting up small doctors’ clinics (buildings) with independent doctors and with a common reception is nowadays in demand (with the National Health – GESY) whereas kindergarten spots are such in demand that the prices charged for children reach that of university fees (if one can find a place!!).

Buying older buildings for renovation is another upcoming venture, but again it is an added risk and problematic in management.

Go through the various websites and search chosen properties of your liking and financial ability and make an offer.

Due care must be paid with problems and difficulties that may occur (statutory tenants, maintenance, common expenses, securing of titles etc). 

As we have said it is easy to buy and difficult to sell.