Rental Yield from Real Estate in Paphos

Before buying a home for rent, the future owner should calculate the costs and income that the property will generate. Paphos in this sense - is one of the most profitable areas of Cyprus, although Limassol and Nicosia are still the leaders.

Based on the database of ads agency DOM, we will present calculations and find out how much can apartment and house rental generate in the long-term and short-term rentals.

Apartments for long-term rent

The cost of rent can vary greatly among apartments of the same area and level of amenities depending on the location. The most expensive are considered to be: the Old Town area, Kato Paphos, part of Chloraka. Here is quite a lot of elite real estate, developed infrastructure, and proximity to all tourist sites and entertainment.

So, a fairly spacious double apartment with furniture and appliances in the center costs 1200 euros per month. This is the standard price, although it can be higher.

For example, in closed complexes with a swimming pool, the price immediately increases to 1500 euros.

In total, in a year on the rent, you can earn from 14 to 18 thousand euros. It should be understood that with this amount will have to pay income tax, and property tax, as well as to cover some regular (albeit small) utility costs.

It is also advisable to make repairs every time after the tenants move out. This will allow you to freshen up the apartment and maintain its attractive appearance. If you calculate quite roughly and rounded, the net profit from the lease of such an apartment will be 10-14 thousand euros a year.

If we are talking about real estate in the suburbs, the amounts will be different. As an example - a selection of prices for different apartments, for convenience we can take the average amount - 900 euros. In a year, the yield will be 10.8 thousand euros, less taxes and repairs - no more than 8 thousand euros.

On the contrary, elite real estate can bring several thousand euros a month. The spread of prices is very large, so you can not derive an arithmetic mean. It should be understood that the cost of maintenance and renovation of such real estate will be significantly higher.

Apartments for short-term rent

If you focus on various rental services, then you can make an estimated chart of prices for each month. Of course, the location is also taken into account, but to a lesser extent. As a rule, these are properties on the first, maximum - the second line to the seashore.

So, here are the approximate rates: first we specify the cost per night, then choose the arithmetic mean and multiply by 25 days - that's how many days usually manage to "capture" in one month. Here's what we get:

1. March-April - from 30 to 50 euros (a month averages 1000 euros);
2. May - on average 45-55 euros (per month on average 1250 euros);
3. June - from 50 to 60 euros (monthly average 1375 euros);
4. July-August - €60 to €80 (monthly average €1,750);
5. September - from 45 to 60 euros (monthly average 1300 euros);
6. October - from 35 to 55 euros (monthly average 1125 euros);
7. November and December - from 35 to 45 euros (monthly average of 1,000 euros);
8. January and February - from 30 to 40 euros (monthly average 875 euros).

In total, in a year, the apartment in the best case scenario will bring 13.5 thousand euros - almost like an apartment, which is rented for a long time. Another issue is that apartments for rent usually have a small area and only one room, while for the long term more often rent spacious apartments. It turns out that at a lower cost (to buy real estate) yield will be the same. It is profitable!

In addition, you can always increase the cost of rent with some amenities. For example, apartments in a condominium with a swimming pool, parking, excellent repair, and minor household services can be counted on the upper limit. Then you will get about 15 thousand euros a year, or even more.

House in a long-term lease

The house is larger than an apartment, moreover, it has several undeniable conveniences: private territory (usually - with a recreation area, and sometimes with a swimming pool), spacious layout, increased privacy, and more. Therefore, it is possible to rent it more expensive, but you should take into account that it is more difficult to maintain it, and more expenses will be required.

Here the neighborhood does not play the last role, but it is not so important. Most residents of cottages have their cars, so spending 10-20 minutes on the road for them is not a problem.

Thus, in the suburbs, you can rent a house at an average price of 1800 euros per month.

If you choose a closer neighborhood and the presence of a swimming pool, the cost immediately increases to an average of 2700 euros per month.

If you take the average option for 2.3 thousand euros, it turns out that the annual yield will be 27.5 thousand euros. From here you can safely take away 10% for taxes, expenses, and difficulties of maintaining the house. In the end, it turns out 25 thousand "net". Not a bad result, which is better than an apartment.

Elite villa with a beautiful view, large territory, swimming pool, and in a top neighborhood is rented at an average price of 6 thousand euros per month.

You can find ultra-expensive offers for 10-15 thousand euros per month and more. They will be in gated complexes with a full range of services, on the beachfront and close to both nature and the entire infrastructure.

Of course, elite housing requires high maintenance costs. Approximately 15-20% of the rental cost will go to maintain the status. If the villa is rented remotely, then for the services of an intermediary you need to pay another 5-7%. In total, at the very minimum, it is necessary to subtract 20% of the average monthly cost (let it be 6 thousand euros) - this is 4.8 thousand euros of income monthly, a year - 57.5 thousand euros.

House in short-term rentals

I wonder, in the sector of private houses, the returns from short-term and long-term rentals are also the same - or are there significant differences there? Let's calculate using the same scheme as with apartments. Let's take the average price for each month, multiply it by 25 nights, and add it all together to get the income for the year. So:

1. February-March-April - from 120 to 300 euros (monthly average of 5250 euros);
2. May - from 130 to 350 euros (monthly average of 6,000 euros);
3. June - from 140 to 400 euros (monthly average 6,750 euros);
4. July, August, September - from 180 to 420 euros (monthly average 7500 euros);
5. October - from 170 to 250 euros (monthly average 5250 euros);
6. November - from 120 to 220 euros (monthly average 4250 euros);
7. December-January - from 100 to 190 euros (monthly average 3600 euros).

It turns out that in a year a cottage with a pool and in a good location will bring 38.5 thousand euros (against 27.5 euros in the paragraph above). Can we conclude from this that the house is more profitable to rent to tourists than to "permanent residents"? Of course not. It should be remembered that it is always more difficult to rent out a large house than a small apartment. Therefore, 25 days of rent per month - this is almost an ideal figure housing can be idle for quite a long time.

If we talk about average options, then short-term and long-term rent of private houses will be about the same in its profitability. To choose the most profitable option, it is necessary to consider each specific case.

Do not forget about payback

Of course, all of the above makes it clear that it seems more profitable to rent a house, especially if you take elite real estate. If it is the amount of monthly income that is important to you and nothing else - this point can be skipped. And if not - familiarize yourself with the payback period of houses and apartments.

In our article, we have already calculated how quickly can pay off real estate in Cyprus. It turned out that the average term for a small apartment is 8-10 years, while for a house the term increases to 15 years. Thus, apartments pay off faster, that is, the accelerated benefit with them is higher.

But if you are not in a hurry, then the profit from renting and subsequent sale will certainly be higher with private homes and even more so with luxury villas. Paphos has enough areas to buy such housing, and you can choose any place you like. Luxury areas include Kissonerga, Coral Bay, Tsada and Tala, Sea Caves, as well as the Tombs of the Kings and the center of Paphos.

For more information about all projects in Paphos, please contact the specialists of DOM, the #1 real estate agency in Cyprus, by phone +357 26 030 205, or in person at 1st Apriliou Street 8, Aristo Center 8011, Paphos, Cyprus.

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