Property in Polis - Latchi - Golden Land Developers - Cyprus Property

Home

Short Term Strategy

Short Term Investment Strategy

Key Opportunity

As a former English colony, the Republic of Cyprus (Southern Cyprus) is reassuringly "British" for UK tourists and homebuyers on the island. English is still widely spoken and the large expatriate community ensures that this will remain the case, while many laws and administrative procedures are akin to "back home". These familiarities, in conjunction with over 300 days of sunshine per year and 648m of beautiful coastline, entice an ever increasing number of visitors and property investors to the island for business, pleasure and relocation.

The Strategic Plan for Tourism 2010 plans to upgrade tourist facilities and resorts with the main aim of launching Cyprus tourism well into the 21st century. The plan includes the establishment of new theme parks, agro/nature tourism, marinas and several golf courses – all great news for overseas investors who seek a stable tourist market, high rental potential and good capital returns.

A high-income country, the Republic of Cyprus comes 16th in the world in terms of per capita income. This means a high standard of living, superior to that of many other EU states and an impressive economic performance.

Property prices remain roughly 30% lower than in some other European destinations such as France or Spain, so British and other property investors are enjoying strong buying power in Cyprus with capital growth reaching 30% - 40% per annum since EU membership in 2004.

With many new off-plan developments going up on Cyprus, it's important to ensure your chosen off-plan property is priced a good deal lower than neighbouring completed prices, allowing power for "flip" investments in which capital investors sell on the unit prior to project completion. In this way investors take advantage of substantial capital appreciation over the construction period.

Timescale

Average construction time for Cypriot off-plan development is between 18 months and two years. Short term investors normally look to profit from a highly promising market, selling on their unit to mid or long term investors approximately 14 to18 months after making their initial reservation, regardless of whether or not the project is yet completed.

Payment terms vary; good projects will often offer terms of 30% - 40% deposit with the balance due upon completion, allowing short term investors to operate their strategy with minimum capital outlay. Of course, the earlier the investment is made, the lower the prices and greater the eventual returns. The early investor also gains the first choice of the best units and these will always be first to attract buyers in the future.

Level of Complexity

Short term strategies offer the lowest level of complexity as the purchase has not yet been officially made; therefore, no property taxes or maintenance or management charges are due. This is a simple capital investment, often with no need to proceed to purchase contract or make any finance arrangements. Always check with the developer if there are any charges made to "flip", or reassign your contract, and at what stage you are permitted to do so, before you proceed.

Risk Assessment

All investors must carefully assess the particular project and units they wish to invest in. In many cases a wide range of other projects will be under construction and a choice will need to be made. This will be need to be based of how a particular development or project will outshine its competitors in terms of appearance, location, on-site facilities and the unit itself. Investors will also need to consider issues such as the number of other units available within the particular development, predicted demand as well as competition for the type of property in they propose to invest.

To curb risk, a short-term investor normally seeks an early purchase of the best possible unit, i.e. a corner unit, a penthouse or ground floor unit with a private garden, which will always sell in preference to a standard first floor unit.

Investors need to be clear how their exit strategy is to run. How will the unit be marketed and by whom? How much will the selling agents charge in commission? Golden Land Developers offers a substantial Investor Care package, which adds significantly to investors' chances of a successful exit.

Should a buyer not be found prior to completion of the property, investors must be confident they can cover payment to completion of the unit and adapt their strategy if necessary.

Short term "flip" investments are undoubtedly more risky than longer term strategies, but, with sound research and careful planning in place, off-plan purchase in well located Cyprus projects live Golden Land Developers offer a sound investment with lucrative returns on investment.

Return

Cyprus property offers potentially high capital appreciation of between 30% and 40% in carefully selected resort areas. Despite being an established overseas property market, Cyprus' progress since EU membership is extraordinary and creating strong opportunity for fresh investment into Cyprus.

Shrewd investors have the opportunity to achieve maximum returns by selecting prime resorts such as Golden Lands Developements at pre-release or off-plan pricing levels.

Financing

This short term investment strategy is purely based on capital outlay. In order to cover all eventualities, investors MUST be confident they can complete the purchase if necessary, even if using a buy to flip strategy. This covers all eventualities.

If necessary, Golden Land Polis Developers and associated establishments can help its investors arrange equity release from their existing property to fund the initial capital payments.

Taxation

Purchasing a property and then re-selling prior to completion is a tax-efficient way to invest as it allows buyers in many countries to avoid any property transfer taxes and side-steps capital gains tax, should they choose to sell on the contract prior to project completion. However, depending on the development and locality in which you buy, this situation may vary and investors are advised to be sure whether or not they need to pay any Cypriot taxes in full prior to selling on their contracts.

Golden Land Polis Developers always recommends research into any double taxation treaties in place between Cyprus and the investor's country of residence.