Pros & cons of renting vs buying a home in Cyprus

Муки выбора: аренда против покупки недвижимости на Кипре
7 June 2021 DOM LiVE
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Deciding on a place where you will live for several years is not an easy task, thus you need to take into account a lot of nuances.

Which is better: rent or take out real estate on a mortgage?

This question is asked by many residents of Cyprus. It is noteworthy that not all of them are ready to get a loan for 20 or 30 years. Most of them choose the first option because of the flexibility of rental terms. Therefore, the number of homeowners in the country is gradually decreasing.

If you look closely, then both buying and renting property in Cyprus have their pros and cons. Only after carefully weighing all the pros and cons, you can come to a certain consensus and choose the most optimal option.

In this article, we want to help you understand the advantages and disadvantages of living in a house, townhouse, condominium and apartment in Cyprus.

So, which is better: rent or purchase?

Often, when a person is faced with the choice of buying or renting housing in Cyprus, the decisive factor is the availability of the required amount in their bank account for the down payment on the mortgage.

Despite the fact that rents have increased significantly in recent years in all cities of Cyprus (especially in Limassol), competing with monthly mortgage payments, not everyone has the opportunity to make the required down payment of 20% to buy a home on credit. However, financial considerations are not the only deciding factor when it comes to buying and renting.

Pros and cons of renting property in Cyprus

For many residents of Cyprus, renting a home is a great option. First, it is not so difficult to find suitable housing that meets the needs and financial criteria. Second, they can choose the rental period of real estate as they wish - from 1 month to years. Renting is a good solution for those who do not want to worry about repair, maintenance, and payment of real estate taxes.

On the other hand, renting a property in Cyprus has its drawbacks. For example, you will not receive any income from such housing. The owner at any time can raise the rent or put the house up for sale. In addition, the lease agreement may contain a lot of clauses regarding the operation of an apartment or house, which will limit the number of residents living in the premises, introduce a ban on animals and so on.

Pros and cons of buying property in Cyprus

Likewise, there are many pros and cons of owning property in Cyprus. Owning is expensive as the cost of maintaining the home sometimes goes far beyond the monthly mortgage payments. So, the owner is obliged to fully cover the repair of their home, if this is not provided for by insurance. And insurance, by the way, in Cyprus does not cover anything except damage from catastrophic events such as a hurricane. The owner is also responsible for paying taxes on the property.

Homes often also require internal and external maintenance, from landscaping to painting. Don't forget that a mortgage is a much more serious obligation than a rent. A home is not a liquid asset, so if you want to get rid of your asset, you have to deal with the cumbersome process of selling your home, which can take months or even years.

At the same time, the owner can count on tax breaks by declaring the mortgage interest. Sometimes you can make good money on the resale of housing if its value suddenly rises. The owner has the right to dispose of the housing at their own discretion. For example, make repairs to their liking.

Thus, when deciding whether to buy or rent property in Cyprus, it is imperative to carefully weigh your needs and lifestyle. Better to ask yourself the following questions:

  • Has your family grown and thus you need extra space for your children?
  • Are you waiting for excellent promotion prospects that might require a move?
  • Do you travel regularly?
  • Do you need a place for your dogs?
  • Do you need a place to have fun?

By reflecting on your needs, you can arrive at the right solution. Owning a property is more suitable for some situations, while renting is good for others.

House, townhouse, condominium or apartment?

Whether it's rent or purchase, you need to decide on the type of housing. Let's take a closer look at each of the options.

House

Houses are usually ideal for those who prefer a lot of indoor and outdoor space, since the houses are much larger than apartments in Cyprus. The house is suitable for a family who needs several bedrooms and a patio. But do not forget that the house is a much more expensive option. The house requires constant maintenance, and, accordingly, more costs.

Several important factors to take into account when deciding whether to buy a home.

Pros:

  • maximum privacy,
  • more internal and external space,
  • more freedom in redevelopment or home renovation,
  • investing in a home is a good deal.

Cons:

  • feeling of isolation
  • many maintenance requirements and associated costs (e.g. lawn mowing),
  • the need for a high down payment.

After evaluating all the pros and cons, you can draw certain conclusions.

Apartment

Renting or owning an apartment definitely has the advantages, but we cannot fail to mention the negative aspects as well.

So, the advantages of the apartment:

  • it is usually cheaper to pay rent than mortgage,
  • less or even no obligation for maintenance and repair,
  • increased sense of security due to proximity of neighbors,
  • on-site facilities such as swimming pools and a fitness center.

Disadvantages:

  • smaller area compared to the house,
  • the inability to change the layout or make repairs to your taste (in the case of renting),
  • possible presence of noisy neighbors,
  • lack of personal space,
  • pets may be prohibited (in the case of renting),
  • there is not always a parking space or storage room.

Tenants also need to pay a deposit before check-in. However, this amount is much less than the down payment on a home mortgage.

Сondominium

Buying a condominium property is usually cheaper than buying a house, but renting a condominium property is usually more expensive than renting a regular apartment.

Pros:

  • more spacious and luxurious accommodation than apartments,
  • often has additional services, for example, a concierge service,
  • investments (residents pay for condominiums with a mortgage),
  • freedom of action when redeveloping or renovating housing.

Cons:

  • lack of privacy (similar to living in an apartment),
  • lack of open space,
  • ban on pets,
  • harder to sell than a house.

If you enjoy living in an apartment but want to take advantage of the investment benefits of home ownership, a condominium might be the perfect choice for you.

Townhouse

Many people enjoy life in a townhouse as it combines many of the features found in other types of houses.

Pluses:

  • more living space,
  • more storage space,
  • cheaper than a house,
  • the presence of a backyard.

Minuses:

  • more expensive than an apartment,
  • the possible presence of noisy or intractable neighbors,
  • lack of freedom of action for redevelopment or repairs to your taste (in the case of a lease).

Although townhouses usually have more space than apartments, they still somewhat resemble living in an apartment. Be sure to carefully weigh the pros and cons.

Before choosing a location to live, decide if you want to live in a city or in the suburbs. Ask yourself a few questions to make the right decision:

  • How long will it take to get to work?
  • What schools are nearby?
  • What parks are there around?
  • Does the neighborhood have the necessary infrastructure?
  • What is the best place for other members of our family?

Ready for the city?

Many people love urban life. Others find the noise and crowds boring. Before looking for a home in the city, think about the advantages and disadvantages.

Pros of the city:

  • availability of public transport,
  • active cultural and social life,
  • a large selection of restaurants, shops, cultural institutions, etc.

Cons:

  • noise,
  • poor air quality,
  • higher crime rate.

Or, maybe it's better to choose a suburb?

The suburb definitely attracts many people. To decide if this option is the best for you, you also need to weigh the pros and cons.

Pluses of the suburb:

  • quiet measured life,
  • lower crime rate,
  • warm, family atmosphere.

Minuses:

  • less diverse set of amenities such as restaurants and shops,
  • lack of public transport,
  • fewer job opportunities.

It is undoubtedly very difficult to choose the perfect place to live with so many different options and many pros and cons to consider. Use the information above to narrow down your choices before moving on.

Even if there is no absolutely perfect place to live, there are tons of near-perfect options. And we hope you find yours soon!

If you are looking for interesting housing options in Cyprus, then check out the DOM Real Estate. Here you will find residential and commercial properties for every taste and budget.

Read more:

  • First acquaintance with Larnaca (link)
  • Skala neighborhood in Larnaca (link)
  • Oroklini village near Larnaca. Tourist area (link)
  • 7 reasons why you need a real estate agent in Cyprus (link)
  • Investment in real estate in Cyprus (link)
  • Permanent residence permit in Cyprus (link)
Source: Автор - Lorena Romo
Photos: porch.com
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