Do you make a good return renting out your flat/villa?

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
01/11/2008 20:39

Ok, I am not too bothered about making money from renting-out when I buy something in the next month or so. But comments on the forum about tourism declining this year, building slowing-up, and a lot of empty new builds (I have seen them too), make me wonder just what the uptake of short-term (holiday) rental capacity actually is. I see some of the development companies even offer a rental service, or is that a 'come-on' to kid people that their new purchase can be self-financing?



I have a relative who rents out a Normandy farmhouse without problem from March to November, all by personal recommendation, no agents, not even a website. But it looks as if that is not so easy to accomplish in TRNC. Is it a pipedream or do you have a ‘method’ to achieve that magical break-even occupancy?



Thanks



guin

The butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
01/11/2008 20:57

Hi Guinness,



I bought my property in 2006 The 1st summer we got 13 weeks of rentals



2007 10 weeks of rentals 2008 9 weeks of rentals. The property is well furnished and overlooks a very large pool, has amazing views of sea and mountains. The problem is that there are more and more properties being finished and up for rental and the number of tourists is falling. Because of the competition you have to keep your prices low and after paying for water, electric, laundry and cleaning oh! and don't forget your 10% rental tax in TRNC and 20% tax in UK you are virtually left with very little. Long term rental is more profitable as the tenenat pays all the bills except the tax. If you are buying on a complex some of the service charges are quite high and there is also insurance to pay for. So the answer is no it is not profitable and don't believe what estate agents or developers tell you.



The Butlers wife

karakum5c



Joined: 18/03/2008
Posts: 1021

Message Posted:
01/11/2008 21:40

You wont make money, might cover your costs but remember in the long term Turkey will join EU and TRNC property prices will jump!

Hector


Joined: 26/08/2008
Posts: 2352

Message Posted:
01/11/2008 23:06

'Turkey will join the EU and TRNC property prices will jump!'



If only we could be certain of either proposition. Anyone betting/investing their money on that basis would be foolish.



Unfortunately relying on rental money to help pay for your holiday home in the TRNC is not a good idea. Some developers have even 'guaranteed' rental returns but that is usually built into the price. No doubt trying to enforce such 'guarantee' would be as effective as trying to go for penalty clause compensation.

PtePike



Joined: 20/05/2008
Posts: 2334

Message Posted:
01/11/2008 23:17

karakum5c: "You wont make money, might cover your costs but remember in the long term Turkey will join EU and TRNC property prices will jump!"



You're talking the best part of 10 years before Turkey gets into the EU.

karakum5c



Joined: 18/03/2008
Posts: 1021

Message Posted:
02/11/2008 13:23

10 years seems like a long time, its not really and i am in this for the long term so are the other owners i am sure.

colly


Joined: 31/07/2008
Posts: 297

Message Posted:
02/11/2008 17:01

If they get in at all!!



We do not let at all now due to all the costs and the tax. Plus the hassle of things going wrong when people are in.



Col

dixie normus


Joined: 22/02/2008
Posts: 820

Message Posted:
02/11/2008 19:38

The rental market here is full of pitfalls, property managment companies over charge for the service they provide, with the odd exception. Your walking a tightrope renting to locals as they dont want to pay, contracts / aggreements are worthless, an excess of rentals on the market are forcing prices down, and now the tax man is on your back at every oppertunity. Holiday rentals are a better bet as long as you have a reliable person on the ground looking after your interests management wise, thats not costing a fortune.



D.N

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
02/11/2008 20:12

First, Turkey will never join EU nor will TRNC.



To answer the rental question, I do not think there are more than a handful of people who even cover the expenses of having a house here unless they live permanently. With rental tax, income tax, property management, pool maintenance, council tax, pool tax when it comes in, the list goes on.



Only my opinion of course, some will disagree. Our own position, living here permanently.

WOODY


Joined: 24/02/2008
Posts: 171

Message Posted:
02/11/2008 20:21

Have you been listening to Leonard Cohen by any chance ?

CJtill


Joined: 02/05/2008
Posts: 836

Message Posted:
02/11/2008 20:49

There are so MANY pitfuls with letting out your holiday home that as an investment it is not worth the hassle of buying with this in mind.

The worst situation I have come across (on 3 occassions) is friends who have let to Turkish Cypriots who have refused to pay the rent or move out. It would seem they have more rights than we do.

If you really want to find a home for your money, may I suggest in order the following options options

1. Invest in various UK nationalised banks (50k max at a time)

2. Buy premium bonds

3. Take it all to Royal Ascot and have a good day out

4. Go to Rocks Casino and put it ALL on red

and finally the most daft option

5. Buy a holiday home in Northern Cyprus.

Michael

guinness


Joined: 10/03/2008
Posts: 224

Message Posted:
03/11/2008 01:48

Dixie,



Thanks but I did write 'holiday' rentals as in foreigners coming for holiday. I would not want to rent-out long term for the obvious reasons that you state.



I do have experience of tenanted property ownership elsewhere. In a county where if there is a problem with a tenant -

1/ its legall to cut off the electricity, and if that fails...

2/ its legal to cut-off the gas, and if that fails....

3/ its legal to cut off the water supply, and if that fails

4/ its legal to 'send in the boys'



Not what I want to get involved in ! but I digress.



CJT

Interesting but please read a posting for what it is and don't see into it what is plainly not there, no matter how amusing you try and make your response.



I am not trying to justify buying a property. This is cash that I have spare and seeking a personal lifestyle benefit to my wife who needs the climate for the benefit of her failing health is the overriding requirement. I am sure you will understand.

Cheers

Guin