Opening a deposit account with a bank may seem like a good way to invest money. However, the idea of buying an apartment in Cyprus to rent out is no less attractive. Many novice investors have a long time to choose between these two options. But experienced 'investors' know that today it is much more preferable to receive income from renting out property in Cyprus.
If we talk about deposits, the maximum that Cypriot banks can offer their customers today is the rate of up to 1.98%. If you calculate the income from a deposit of 300,000 euros at this rate, the amount will not be so great. Another thing is rent. Cypriot landlords are five or even six times more profitable. For example, the average profit from renting a property like this in Cyprus is 3-8%. In the case of investment in a new building, on the zero cycle with a large area of premises, it can reach 30 and even 40%. Such an apartment in Neapolis, for example, can yield an income much higher than the average market.
Of course, the apartment is subject to unforeseen circumstances. For example, there could be a fire or a flood, which would undoubtedly result in significant financial losses. However, the probability of this happening is negligible. And if you want, you can insure your property. In the case of a deposit, the safety of the funds falls on the shoulders of the state, so no one is insured here.
It is therefore more profitable to rent out property in Cyprus than to put money in a bank deposit account to earn interest.
The latest data, based on a new study by Danos International Consultants, shows the profitability of renting out apartments in all cities on the island. Overall, it ranges from 4% to 6%.
In Nicosia, rental yields for apartments range from 4% to 5%. The most stable yields are found in areas close to business centres, government offices and universities.
Limassol, the city with the highest rental growth in recent months, offers rental yields of 4% to 6%. The most profitable investments in this Cypriot city are seafront apartments in popular neighbourhoods that are sought after by foreigners and locals alike.
In Larnaca, you can earn between % and 6% per annum by renting out an apartment. The town is particularly popular with renters at the moment. You can maximise your rental income by buying a property close to the airport or the sea. Larnaca is an ideal option for investors looking for low cost investment properties with great rental potential.
Paphos, known for its appeal to British retirees and tourists, also offers good returns, particularly for holiday home owners. Long-term rental yields range from 4% to 5%, while short-term rentals during the tourist season can yield much higher returns to the owner.