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You might not be familiar with the property market terminology at all, so in layman’s terms “buy to let” means just that. All you have to do is buy a property, complete it and then let it out. There is just one special rule to keep in mind and that is that your projected rental income should fully cover your mortgage costs.
One thing to keep in mind while venturing on this type of property investment is the total month duration of the high and low seasons. In Northern Cyprus for example, the low season lasts only five months and the high season extends for seven months. To put the icing on the cake, there are over 300 sunny days a year, allowing thousands of travel makers to enjoy year-round holidays in places like Northern Cyprus.
There’s nothing better than having real figures to work with, so let’s move on to a property deal including sea view totaling 250.000 Euros. First you have to make an initial payment of 3000 Euro to own the property. After that 30% of the total deposit is paid which will be 75.000 Euro, including 3000 Euro down payment.
With the deposit we only have to deal with the 175.000 Euro balance, which we are going to finance. Take a good look at all the different mortgage options, but I would recommend the interest only mortgage, as it lowers your monthly payments. We’ll take the best rate under current conditions, then the resulting monthly payment works out to around 800 Euros, which is 9.600 per year.
Available data on rental income in Northern Cyprus suggests that properties can be rented for up to 10 months per year. So if we keep the asset we just bought, we can expect an astonishing 2600 Euros. in high season and a whopping 1500 euros. in low season.
So if we look at the finer details of the property we just bought, let’s calculate that it is rented out for about 6 months in the high season and about 4 months in the low season. You may be surprised to find that you have 21.600 Euro of rental income in your pocket. Well, you will have to hire a property management company to take care of your payments such as the community fee, but it will not exceed 1000 Euros a year. Are you starting to see why property investment in Northern Cyprus sounds interesting?
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