Where and why Americans are leaving and investing
Who would have thought a year ago that Americans would invest in housing in North Cyprus. But now this trend is actively gaining momentum.
Investing in real estate has been and remains the most reliable way to preserve capital. And since in the United States there is now an unfavorable situation due to the pandemic, unrest and slowdown in economic growth, more and more Americans are thinking about buying profitable real estate abroad. According to the TLC channel, over the past six months, Americans have taken the lead in buying real estate abroad.
One of the most popular destinations today is Northern Cyprus, where the cost of housing is much lower than in the US and EU countries.
We spoke with Elzhas Munataev and Ekaterina Toropova-Munataeva, the founders of the company True Life Developmentto find out why the Cypriot market is growing with the COVID-19 pandemic and the global crisis.
“Professionals have long understood that money should be kept“ in different baskets ”and in different currencies. In this case, if something happens to your local market, you always have a fallback from where to get a steady income to ride out the turbulent times. Now many Americans have understood it and are actively using it, ”Elzhas explained.
Ekaterina clarified what makes the Cypriot market attractive to investors: “We have been living and working in Northern Cyprus for the third year already, this market is reliable, affordable and profitable. The price of the property as well as the rental income are recorded in British pounds sterling. It is a stable currency and the least subject to sharp fluctuations. ”
Representatives True Life Development stressed that Cyprus property is growing in value every year. For example, here are the indicators of one of the largest developers with the highest profitability.
In this table, you can see the price increase since 2014. In 2014-2017, real estate prices grew by 9-15% per year, in 2018-2019 there was an increase of 8-10% per year. Over the past six months, developers, even despite the quarantine in North Cyprus, have organically raised prices by 3-7%. And if back in April 2020 it was possible to buy real estate on the island for at least $ 50 thousand, now prices start at $ 60 thousand.
What is the investment income
Investment income is 7-12% per year of the value of the property. In this case, the owner himself does not need to do anything. You can buy an apartment in North Cyprus and transfer it to the management of a company that will send you income from the rental of your property.
Each owner can choose one of two options for obtaining profitability:
- Guaranteed income - 7% of the value of the property, as well as the right to live in your own apartment for 2 weeks a year.
- Non-guaranteed income, which in fact can be up to 10-13,7% of the value of the property.
In both cases, an agreement is concluded with the management company, which starts using your apartment as an apart-hotel and frees you from all the hassle of finding tenants, settling them and collecting payment.
Company gives a 7% guaranteed income per year, because he knows that the return on real estate in fact reaches 14%.
“The management company independently searches for clients through the well-known websites Booking.com, Airbnb.ru, etc., is engaged in cleaning, check-in / check-out, transfer from and to the airport and other necessary services. The property owner pays 10% of the income for services, as well as 10% tax on income. The above profitability from 7 to 14% per year is shown after deducting all expenses, ”explained Ekaterina in detail.
The company's confidence in 10-14% per annum in dollars is explained by the situation in the Cypriot market.
“The flow of tourists to Northern Cyprus is growing every year, and since this country began to actively develop only 15 years ago, there is still a shortage of primary housing. There is still a lot of undeveloped land in Northern Cyprus, while more and more tourists are discovering this piece of paradise and come here for a mild climate, clean sea, ecologically clean products, sun, safety and inexpensive pleasure. Therefore, developers are building new houses here to meet the growing demand, ”Elzhas said.
In 2019, North Cyprus was visited by 1 tourists more than in 095. The total number of all those who visited the country at the end of 016 amounted to 2018 people. The growth is happening every year due to the fact that Northern Cyprus is gaining popularity among tourists as an island with an ideal value for money.
The main tourists, not counting the Cypriots from the southern part of the island, are the British (21%), Americans (1,2%), Germans and Israelis. People who come to the country as tourists, in about the same percentage, become investors in real estate in Northern Cyprus.
The procedure for buying a property is very simple
“The buyer is only required to have a valid international passport. our company True Life Development helps with registration and registration of real estate in the land registry on a turnkey basis. Also, at the request of the client, an English-speaking lawyer is provided, ”Elzhas said.
In order to buy property in Cyprus, it is not necessary to have the amount to cover the entire cost. It is enough to pay 30% of the initial payment, and the developer provides the remaining 70% in installments up to 5 years, without interest. And this is with one foreign passport, without providing other additional documents and proof of income. This is how absolutely all developers in Northern Cyprus work, the country's legislation allows this to be done, which cannot be said about other states. And while you can use it.
“Over these six months, we have noted an increased demand for online purchases from American investors, who, due to quarantine, cannot fly to North Cyprus to conclude a deal, since the capabilities of developers and British legislation make it possible to safely conduct transactions without the personal presence of the buyer. It is even more profitable for the client - the money saved on flights can be added to the initial payment. So, from April to October 2020, about 500 Americans purchased real estate online, ”Elzhas said.
Prices don't bite
The prices on the Cypriot market are pleasantly pleasing to Americans when they undertake to compare them with the cost of housing in the United States.
“Prices for real estate under construction this year in good projects start at £ 45, which is roughly $ 000. The market is stable as Americans are not the only investors in North Cyprus. Now real estate on the island is acquired by the British, Israelis, Norwegians, Belgians, residents of the Baltic countries and the CIS - since many of them can arrive without quarantine. Therefore, it is not worth expecting that prices will collapse in Cyprus, the current price offers are already very profitable, ”Elzhas said.
At the same time, according to Ekaterina, developers value clients and are ready to make reasonable concessions: “Developers, against the backdrop of a pandemic, are happy to meet real buyers, make special gifts and offers. Therefore, for those who are seriously thinking about investing, I recommend not to postpone. Right now, oddly enough, during the coronavirus, you can get very good conditions for buying real estate in North Cyprus. "
You can leave a request for a consultation with True Life Development specialists link.
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