Northern Cyprus Investments - Currently Overpriced?

walkerscott


Joined: 13/08/2009
Posts: 901

Message Posted:
16/08/2010 10:16

I know that 5 years ago investing in Northern Cyprus appeared to be a good thing mainly because of the price ratio between north and south was so large, but with recent falls of up to 30% in prices across the Med, are properties here a little overpriced?

I also realise that many cash endowed investors were flipping over properties and making a killing but that has now, in the main, come to an end. Maybe it's a good thing. I believe as a long term investment, 10 years or more, it to be a good one, especially if you can achieve a reasonable rental return and asset value increase.

I still believe it is a good investment for those who relocate here and actually make Northern Cyprus their home, as long as they have the necessary income to survive the inevitable cost of living increases.

What do you think?

cronos


Joined: 26/10/2008
Posts: 2093

Message Posted:
16/08/2010 10:19

Walkerscott.....presumably you mean it could be a good investment provided that you buy it on a NO KOCAN , NO MONEY basis?



And as we all know,unless the laws are changed in respect of PTP then this cannot happen.

walkerscott


Joined: 13/08/2009
Posts: 901

Message Posted:
16/08/2010 10:34

Cronos,

Thank You. Yes, only if you adhere to the "No Deeds, No Money" practice ensuring that there is a guarantee that memorandums etc cannot be placed against the Deeds whilst you are waiting for PTP.

walkerscott


Joined: 13/08/2009
Posts: 901

Message Posted:
16/08/2010 10:41

How do I tell if a property is a good investment?

Traditionally, investments in property provide a ‘return’ in 2 ways:

Capital appreciation and Rental income

A simple formula to give an easy way of comparing the required sale price of a house against its ‘true worth‘ is perhaps the following:

If the annual rental income you can expect achieve from a property is around 6% or more of its price, then it is a ‘good’ investment. Conversely, if the annual rental income you can expect achieve from a property is less than 5% of its price, then it is a ‘poor’ investment.

A property is ‘fairly priced’, for both the buyer and seller, when its annual rental income is between 5% and 8% of its price. This percentage return is known as its ‘Yield’ – and it is an industry standard formula for assessing the value of property.

cronos


Joined: 26/10/2008
Posts: 2093

Message Posted:
16/08/2010 10:47

walkerscott...msg 4



In which case,a typical £150K villa in NC would struggle to get more than £500 per month long term rental....which is only about 4% yield.

bigbadbob


Joined: 04/08/2010
Posts: 368

Message Posted:
16/08/2010 12:06

seems to me that you are better off leaving your money in the hsbc at the moment.Bob.

kavenkoy


Joined: 10/04/2008
Posts: 1787

Message Posted:
17/08/2010 05:34

message 5



3 appartments worth 150k would bring you approx £950 per month .



but i suppose 3 times more head aches lol



kav

cronos


Joined: 26/10/2008
Posts: 2093

Message Posted:
17/08/2010 09:10

Kav....msg 5



That's a very fair point,and as you say for pure investment return through rental you would be better having a few cheaper apartments rather than one large villa.



However as you say,worrying about 3 properties and 3 lots of tenants may be too much for most people !



Also,aren't us foreigners only allowed to buy ONE property in the TRNC? ( unless we put it in other people's names or form a company etc? )

breezyboy


Joined: 14/05/2007
Posts: 1179

Message Posted:
17/08/2010 11:59

There is no difference between UK and TRNC on this point. Buy to let investors are lucky to make 4% on their properties. This of course pre-supposes that they rent them out for 12 months every year , if at all. The huge number of flats built to take advantage of the buy to let boom a few years ago have meant over supply and many are getting nothing at all, but paying a mortgage which was too easy to get when the boom was on as greedy banks and societies jumped on the bandwagon.

Personally I think the risk has been better with TRNC banks with 20% 2 years ago and still 11% on offer. If you stick to 30000 euros per account at least you are not worrying about getting tennants.