Depreciation Period of Cyprus Properties
Those who buy housing for the purpose of residence, generally examine the criteria for themselves. For example, it looks at its location, the structure of the project, the quality of the material, its potential neighbors…
There are two important criteria for those who are looking for a house to make a real investment, that is, to make the most of their money. The first is the increase in value, the second is the amortization period.
Value increase means the annual increase rate of the purchased real estate. In the TRNC, this rate is 10 percent on average.
The amortization period, on the other hand, is the period of self-payment with the rental income that the investment will provide.
ROI (return on investment) in global investments means return on investment. If the investor has good ROI, he is investing even on the other side of the world.
Cyprus real estate advertisements attract the attention of many domestic and foreign investors with these advantages. TRNC housing projects that win when buying, increase in value after purchasing and pay for itself with rental income.
Cyprus construction companies and TRNC real estate agents always underline the amortization period in their presentations. Buyers who want to buy and rent out rather than dwelling pay a lot of attention to the depreciation calculation.
How is the amortization period calculated in the TRNC?
These numbers vary from city to city. For example, the potential of Girne and the potential of Guzelyurt are completely different. If you are going to buy a house for rental income, you need to carefully examine the dynamics.
What are these?
- The average rental price of the region
- Potential tenants
- Your rental style / short term
- Long term
- Your rate of finding a tenant
Until recently, rents in the TRNC were paid in pounds sterling. After the volatility and uncertainty in the pound exchange rate, some homeowners switched to the Turkish lira. With this transition, slight deviations occurred in the depreciation calculation. For example, the house you will buy is £50,000. If you rent the house in that area, the average is £350. It makes £4200 a year. With this account, it takes an average of 12 years for the house to pay for itself. If you add the property tax you will pay and the renovations you will make at home, we can say that it is 13 years.
NOTE: The price increase of your house is not included in the account. It's the extra income. The rental price of the houses bought for hundreds of thousands of liras, or even millions, is below the Cyprus average. Therefore, the figures show an average of 25-30 years per flat in the depreciation period calculation.
Short Term Rental
This calculation is valid for long-term rental. There is also the TRNC short-term rental option. There is no timeshare in Cyprus, but this similar model has been developed by Cypriot construction companies in recent years.
Let's say you bought an apartment from the project. Your payments are over, life has begun. If you wish, you can tell the construction company that you rent it for me. The construction company includes your flat in the system in the style of hotel management. It is rented to incoming holidaymakers. They deal with all the details such as maintenance, cleaning, marketing and operation. In the end, it takes 20 percent of the income on average as a service fee and transfers 80 percent to you.
Considering that occupancy is achieved on average 200-250 days of the 365-day year, the resulting profit is very profitable.
The investment you make with this short-term rental system pays for itself in an average of 5 years and only with rental income.
If you want to get information about such projects, you can contact us.