Are you thinking of investing in real estate for the first time? Investing in rental real estate can generate income in the long-run while also jumpstarting or broadening your investment portfolio. Real estate is an excellent asset to invest in for the first time because homing is a necessity that people will always count on. The market steadily expands year after year as new property development projects and refurbishments populate the land. With that said, making an investment and becoming a landlord is a serious commitment that requires a lot of research.
Are you ready to be a landlord?
The act of property investing entails various levels of commitment in terms of financial, time, and effort. There are different investment opportunities for each level of commitment and what you may be ready for at the moment. Some examples are:
Invest in a property you already own
Investing in real estate doesn’t always mean making a new property purchase. If you already own a property, you may be in a position to rent it (or rooms of it) out for short or long-term rent. Alternatively, you can take the route of investing in fixing up your property so you can sell it for an increased value.
Buy a new rental property
Another popular route is buying a piece of property to rent it out. This option allows you to use the rent income to pay off the place’s mortgage. Whether you decide to invest in a newly-built or older property depends on whether you are willing to invest in renovations and what scale of investment you are ready to bet on.
The beauty of subsidising a property is that you can decide to use the property for your own needs on your own accord, without paying any rent.
Finding a good property
The most integral step of investing in real estate is finding a promising property. This part is where Estate Searcher comes in handy; our platform is a hub for real estate listings across Cyprus from individuals and agencies.
While searching for properties, we recommend taking the following factors into account:
Getting a mortgage for rental property
In Cyprus, you can enquire into housing loans based on each bank’s packages.
The many bank programs require various percentages of down payment and interest rate. You can calculate an estimation of your mortgage rate through many of the banks’ websites before enquiring directly; Bank of Cyprus, Eurobank, Alpha Bank, Hellenic Bank.
Read more on each banks’ housing loan policies here.
Rewards and risks of being a landlord
Investing in rental real estate has the perks of extra financial income. However, you want to consider the bigger picture before committing your time and money.
- Rental income
- Permanent ownership
- Freedom to renovate as you wish
- Stable and tangible investment
- Ability to use the property for yourself or family members if you desire
- You may run into unreliable tenants
- Maintenance fees
- Hard to sell real estate if needed
- If you don’t find tenants, you won’t receive any rental income but will still have to pay general expenses
Familiarise yourself with landlord-rental laws
Before becoming a landlord, you want to familiarise yourself with the local rental laws to prepare yourself for potential tenant situations (e.g. eviction laws, rent increase laws). Read more on rental laws here.
Acquire an adequate maintenance team
When going into the property business, you will gain the duties of maintenance and managing tenants. We recommend hiring and having a good working relationship with a handyman, a property manager/real estate agent, a contractor, and a cleaner, so you’re ready for everything.