What is the secret to making huge capital gains with property in North Cyprus?
The simple answer is timing. Everywhere you look you can see property for sale in North Cyprus and new developments springing up, and don’t think developers have any trouble selling large amounts of off-plan units quickly.
Property investors are coming to North Cyprus in droves and there is no sign of it easing off. Even during the early coronavirus travel restrictions, when it was almost impossible to travel, investors where buying properties in North Cyprus over the phone without even coming to the island.
This buying frenzy was created partly by North Cyprus property featuring in the international press. Forbes Magazine in 2021 voted Iskele in North Cyprus ‘#1 Best Beachfront Buy in The World’ and it has been booming ever since.
High Capital Appreciation
We have a long list of investors screaming for ‘pre-launch’ properties because the initial prices set by developers are usually very low compared to the price you can expect at key delivery. It is not uncommon for the developer to increase the price four or five times until handover to the client. The sooner you invest in North Cyprus the better.
Here is a typical example of a development showing the ‘pre-launch’ and ‘current market value’ price in the space of just 18 months.
As you can see, the capital appreciation can be huge. We cannot guarantee by how much an off-plan property will increase but the average is around 50%. There aren’t many places in the world, especially under the current world economic climate, where you can achieve such gains.
Attractive Payment Plans
Another reason investment properties in North Cyprus are so popular is due to the attractive payment plans on offer. The payment plans are virtually identical across the board no matter which developer you choose. Interest free payment plans from 24 - 80 months is not out of the ordinary. In addition, investors usually pay a 30% down payment followed by monthly, quarterly or half year payment plans. This is actually one of the reasons why the North Cyprus property market is so stable and unique. Unlike other European destinations, the North Cyprus property market is built with cash and doesn’t rely on any loans from the international banking system. Mortgages are available but usually for a maximum of 7 years up to £100,000, depending on your financial circumstances.
Another tactic developers use to entice investors is by offering them ‘rent guarantee’ periods once investors take key delivery for their new properties, some of the rates vary between 7% - 8% (net) for between two to four years. However, usually these deals require a larger down payment of up to 50% but these offers can even include a free ‘furniture pack’ or other bonuses.
Even without these ‘rent guarantee’ periods you are still likely to achieve a 6% - 8% annual rental return, since North Cyprus has a generous climate with 300+ warm sunny days every year. On the whole you can expect occupancy rates of around 60% or 220 days per annum for short-term bookings. Most large developers have their own in-house rental management department that can deal with all your short-stay bookings, cleaning, linen etc - a turnkey solution.
Property Flips in North Cyprus for Huge Rewards
Many savvy investors snap up as many pre-launch properties with rent guarantees as they can so they can get the best of both worlds. Once investors find these discounted properties they hold on to them until as they approach the end of the rent guarantee period, and then they put them back on the market as re-sale properties. This way they have earned rental income and huge capital gains in just few short years. For many it is a ‘no-brainer'.
Lowest Prices in Europe and the Mediterranean
Finally, the prices of these properties in North Cyprus are so low you would struggle to find anything else comparable in other European or Mediterranean destination. One recent client commented “North Cyprus reminds me of Spain twenty years ago”. Of course no market stays in an uptrend forever and just like elsewhere the market will have to eventually mature at some point, however we do not see this happening for at least another five to seven years. To give you an idea, prices start from just £80,000 for studios and £120,000 for one bedroom apartments.
Northcoast Properties work with all the major developers who offer these attractive property investments in North Cyprus and most properties either have sea views or are in close proximity to the beach.