You may have heard of “Buy to Let” quite a lot recently on the financial section of Sky news and be wondering what this really means. Well it’s not too complicated as it implies, you buy a property and then you let it out. The only trick in order to do this successfully is to let the property out for more than your monthly mortgage payment.
Traditionally you would have the same rental income on a monthly basis but if you were to do the same with a holiday home then you would then get staggered monthly rental income depending on the season. So if you were to find such a holiday home in Europe, where could you invest in a property where the holiday season lasted the longest. Well that would be North Cyprus which boasts some 300 sunny days per year with a high season that lasts an amazing seven months. So you can see that North Cyprus is the place to get the best profits and even more than a traditional “Buy to Let”.
There’s nothing better than having real figures to work from so let’s go over a property deal including a sea view totaling 250.000 Euro. First you will have to make an initial down payment of 3000 Euro to hold the property. That is followed by paying a 30% total deposit which would come to 75.000 Euro, including the 3000 Euro down payment.
The remaining balance will need to be well financed with a mortgage that will give the lowest monthly payments. That means choosing an “interest only” mortgage which offers just that and so with the current Euro bank rate of 5%, your monthly mortgage payments would work out at around 800 Euro, totaling 9.600 Euro per annum.
The statistics available on rental income in Northern Cyprus show that properties can be let out for up to 10 months per year. So if we put the property we have just bought into the equation, we can expect an amazing 2600 Euro. in the high season and an awesome 1500 Euro. over the low season PER MONTH.
To best thing to do now is get out you calculator and start to work out just how much rental income can be generated from a villa in Northern Cyprus. With an average 6 month high season and 4 month low season rental income you would total up a staggering 21.600 Euro annual gross profit. To see what is exactly left in your pocket, you just deduct the 9.600 Euro mortgage payments and about 1.000 Euro fees in property management. My calculator now shows 11.000 Euro of net profit in rental income for a “Buy to Let” villa in Northern Cyprus. Sounds interesting?
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