Cyprus Property | Antonis Loizou

Русский

UK FREE PHONE 08000326203

INTERNATIONAL 00 357 25 871 552

Home Search Golf Properties Press Centre About Us Contact Us  

Press Centre > Articles

Aiming for Retirement in Cyprus

21 May 2017

Subscribe to our monthly newsletters.

Aiming for Retirement in Cyprus

Avoid buy to resell since what you should be after is an annual steady income and not speculate on such an event for the purchase but having said that the asset you acquire (apartment/shop) is there to sell in the future even if sold at the price of acquisition it will still make sense (retaining the price of such investment is the minimum as nowadays the property market gets better and most likely it will be increased bearing in mind the improving economic situation and the increasing demand).

For those who are around the age of 40-50 should start considering their retirement income as a first priority and things to do once they reach the retirement age of 63 (optional 65) years old.

  • Most companies and well organised private business have in place a provident fund with contribution by the employer and employees at various percentages of their monthly income, which could amount to a sizeable sum which could help them during the retirement years. This amount could vary but let’s say on average around €50.000 and could be multiple of this for the civil servants and others and much less for the labour force (those who need it more and should have been the other way around).

    Unfortunately, by Cyprus standards locals borrow against this provident funds amount, whereas others have as their priority of helping their children in their studies etc, leaving them at the end very little – A mistake to think that life ends at 70 years old. Based on the Cyprus standards the life expectancy is around 75 years old for men and 80 years old for women, say on average 15-20 years after retirement and Cy pensions do not necessarily cover the living expenses and the increasing health care (until the National health happens).

  • Pensions amounts again is a matter of contribution and vary from €600 p.m. to €2.000 p.m. for the high income earners.

  • As one gets older so will their own expenses increase not only for their health care, but also for other expenses such as grand children’s requirements etc. For one reason or other in Cyprus parents seem to be looked upon by their children at whatever age they are for help asking them for funding regardless – how unfortunate for most retired people who cannot say no.

  • Old age pensions are provided by the Government only to those who are under a certain income, whereas widowers are entitle for a small Governmental help. Not enough to live – especially those who owe money and those wishing to live in a similar style that they were used to.

  • Planning for retirement is therefore a must in terms of retirement income and bearing in mind the prevailing financial situation we suggest that at an early age (even at the age of 30 years old) one should plan for the period after retirement. For this we suggest the following:

  • Invest in real estate for income which nowadays show a return of 3%-4% on the invested amount. What we refer as a good investment is that one should aim for the rental income with a particular reference to shops and residential properties (apartments) the latter within the towns for which it has now a high demand/rents are on the increase. Apartments in Nicosia-Limassol and Larnaca are much in demand, as are holiday villas to let (see our previous article on the subject).

Location to target is Limassol for shops, Nicosia on high streets (not only) and in the tourist areas, such as along the tourist roads. Pay special attention to Possidon Avenue area and Coral Bay area in Pafos, the surrounding area of the Ayia Napa Marina and for the Paralimni region in the Pernera area and other seaside areas of the resort (non availability to target the Hotels road at Protaras).

  • Buy to let shops as we have recorded with 3%-4% p.a. return but less expenses etc reducing the income to 2%-3%, a level, low as it may be, it is better than bank deposits, whereas Governmental bonds are nowadays at level below 1½% (and going down).

  • Rents in Cyprus have also all sorts of problems which refer to the statutory tenants (properties built prior to end 2000) non payment of rents and common expenses by tenants (provide a rent inclusive for the common expenses and maintenance) repairs etc.

  • An upcoming form of investment (buy to let) are apartments studio-1bed let for short stays by mainly foreign visitors (mainly business people) in the towns of Nicosia and Limassol. This is an alternative to hotel stay by visitors costing them less than ½ of the hotel stay, but in such occasions the units must be of good quality and very good quality fully equipped furniture and equipment. It also includes management on the investor’s side, but then the rents are almost double from the long term ones. If one can get connected with banks, auditors etc who have a long line of foreign visitors, it could pay.

As we have said, start considering your retirement income at an early and not at the end.

Having discussed this with our more affluent readers they have pointed out to us “why not invest abroad e.g. U.K. in real estate where one can get a return of almost 8%-9% p.a. or in international shares?”. Quite right, but then, we are not talking about an investment of €150.000-€200.000 but more like €½-1 mil. and in addition the recently introduced inheritance tax (U.K.) could amount to 45% tax on the asset (nothing for Cyprus).

Avoid buy to resell since what you should be after is an annual steady income and not speculate on such an event for the purchase but having said that the asset you acquire (apartment/shop) is there to sell in the future even if sold at the price of acquisition it will still make sense (retaining the price of such investment is the minimum as nowadays the property market gets better and most likely it will be increased bearing in mind the improving economic situation and the increasing demand).

So, let’s say at the age of 50 years old you invest in two apartments in Limassol be it of some age but the building is well kept, for 1bed €120.000 and with an expected rent of €6.000 p.a. less expenses say net amount €4.500 p.a. which shows a return of ±4.0% more than your deposits with the banks etc etc.

Start considering our suggestions dear readers and specify the area where you wish to target. At some age you could secure a loan but make sure that loans have to be repaid not later at the age of 60 years old.

www.aloizou.com.cy | www.aloizou.ru

Disclaimer / Copyright / Privacy Policy | Site Map

Copyright © 2017 Antonis Loizou & Associates All rights reserved.
Development by Pansophic Software