Parkash Randhawa explains why she and her husband chose Cyprus as their new property investment opportunity.
Meet The Buyer:
Name: Parkash Randhawa
Age: 44
Location: Aphrodite Hills, Cyprus
Job: Beauty clinic owner
Contact: Golf Cyprus, www.golfcyprus.net, 01908 612045,
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What Parkash Spent
Cost of two-bedroom villa: CY£200,000
Now worth: CY£300,000
Made: CY£100,000
Cost of one-bedroom apartment: CY£110,000
Now worth: CY£175,000
Made: CY£65,000
Self-taught property investor Parkash Randhawa and her electrician husband bought their first UK investment property around 18 years ago and have since built up a portfolio of 14. In 1999 they branched out into the overseas market and bought two apartments on the Costa Del Sol where they now own five properties. Then, in 2002, they purchased a house in the prestigious Aphrodite Hills resort in Cyprus and the following year they bought an apartment there.
The Randhawas have learnt how to spot a bargain by trial and error and have never attended any courses or had formal training at buying and selling homes. They rely entirely on their own research and instincts. Four years ago they identified Cyprus as somewhere they were likely to make money if they invested in property. We asked them why they chose the island: “We were looking to expand on our investment, but at the same time avoid keeping all our eggs in one basket,” Parkash tells us. “After a bit of ground-work we decided that in terms of property investment, Cyprus would be the next Spain.”
The couple bought two properties in Aphrodite Hills from Cybarco to use both for pleasure and for investment, with an aim to retire there in the future. They felt that Cyprus was a good place to buy due to its membership of the EU and the fact that it was quieter and smaller than Spain but with even better weather year round. The couple visit the island three times a year with their two children aged 20 and 11.
The Marbella of Cyprus
Cyprus has recently become one of the best-known countries to buy an overseas home, but three or four years’ ago, there were only a couple of UK agents promoting Cypriot property. “The choice of location, type of property and developments were very limited,” continues Parkash. “So I phoned around asking international agents to find me the ‘Marbella’ of Cyprus. I kept getting told no such place existed. So when I read about a five-star golf and leisure resort being developed there, I asked for details immediately. We arranged to meet the developers at the Sandown overseas exhibition and we knew this was what we had been waiting for. Unfortunately, they had sold all the units that we were interested in. Eventually, they contacted us on releasing the next phase and we secured the villa. It was another 10 months before we actually made our maiden visit to Cyprus, to monitor the progress and to see the amazing development first hand. Immediately, we loved it and confirmed what we already knew, that we had made the right choice.”
Parkash bought her first apartment off-plan and directly from the developer, Cybarco. “The developer’s sales office were very helpful and supportive,” she says. “We had paperwork sent to us about three to four other developments before we came to hear of Aphrodite Hills, but none of the others met our expectations. We found Nicos the Cybarco sales manager very helpful and accommodating and built up a trust with him. He recommended a solicitor who we employed and the whole proccess was smooth. The buying process seemed more familiar to us than buying in Spain and the purchasing taxes and fees were also more favourable.”
The couple bought a two- to three-bedroom villa for CY£200,000 (£238,124) and the one-bedroom apartment was CY£110,000 (£130,950). Four years later and the properties are worth around CY£300,000 (£357,128) and CY£175,000 (£208,304) respectively – a very good return on their original investment.
The villa has a kitchen and open plan living/dining room downstairs which has three sets of French doors opening on to the terrace with views over a ravine, the sea and the golf course. Upstairs the house has two double bedrooms and a large basement which offers additional living space with a second bathroom, plus the garage. The villa also has a small garden. Their one-bedroom apartment is on the first floor and has a private terrace which again overlooks the ravine and golf course and the Mediterranean Sea.
While the Randhawas were pleased with their investments, there have been some unexpected expenses involved: “Considering they were such expensive Cypriot properties, we were surprised to have to pay extra for the air conditioning and marble flooring,” says Parkash. “However, we both agree that they were neccessaties rather than luxuries. The only other disappointment was that initially we were told that we would have life-time golf and health club/spa membership. However, on the opening of the spa, this membership was reduced to only 10 years.” A lesson to us all to check the small print and make sure any extras you are promised are included in the sale.
The family use their properties on the island for holiday rentals and for their own family holidays: “Fortunately, the whole family loves holidaying in Cyprus and we all have our own favourite places and things to do,” says Parkash. “Our 11- year-old daughter loves the beach at Aphrodite’s Rock, the water parks (especially Fissure) and scuba diving in the clear warm waters. Our son, who is 20, really enjoys the night life in both Paphos and Limassol (although we have not ventured to Adiana as yet). There also many sporting pursuits on and off the resort. I adore getting up early to buy fresh local produce from the farmers’ markets – it looks and tastes so much better.”
A Bit of Local Colour
“We very rarely sit around, we have made so many good friends locally and are regularly introduced to amazing restaurants where locals eat. Everywhere is soaked in history and culture. It’s nice to cool off in the beautiful Troodos mountains, where in the winter months (December to March), we’re told that the skiing is very good. They also find that the locals are warm and welcoming. “They tend to want to take you home, introduce you to their family and feed you! They are extremely hard working people who love their leisure time and long, relaxing meals in the company of family and friends. They are particularly warm towards the British.”
What advice would Parkash give a potential investor? “Personally, I would only feel 100 per cent safe buying in the southern (Greek) part of the island. If you are considering buying, I suggest you do it sooner rather than later. Due to its position Cyprus attracts a wide audience, both holiday-makers and purchasers alike. Although it is already popular, Cyprus is keen to become the next golfing destination. There are also many benefits coming from joining the EU. When the euro currency is adopted, prices will probably move upwards again.”
Parkash is happy that they decided to buy property on Cyprus: “Yes, on the whole we are very pleased. The main difficulty seems to be building the initial client base of visitors. However, the exemplary feedback from existing guests makes me feel confident that it will happen gradually. Once the mortgages have been paid off, the places will bring in a retirement income. We are hoping to share our retirement time between Cyprus, Spain and here. We have built up our UK portfolio of 14 buy-to-let properties over the last 20 years. To date, we own five apartments on the Costa Del Sol which are also let as long-term rentals. The two places in Cyprus are for holiday rentals, which is a new concept to us and, naturally, there is a learning curve. We find we are kept sufficiently busy with these and are not presently planning to expand on this. Fortunately, we did our sums looking long term, when we were relatively young and buy-to-let was not fashionable. It has been and continues to be hard work but we enjoy most aspects of it. I also feel my children have benefitted by being brought up in an environment where they witness reward for hard work. They do not necessarily see it that way!”
Why Buy In Cyprus?
• Cyprus property prices are growing faster than they are in the UK
• Cyprus offers steady capital growth and pretty much assured rental
• The infrastructure and economy of Cyprus are both very healthy
• The island has a fantastic climate and is near enough to the UK to visit for a weekend
• The crime rate in Cyprus is very low, making it a safe place to live
• Larnaca and Paphos airports are being extended to cope with the demand for more flights as tourist numbers visiting Cyprus increase
• The government is ploughing money into new marinas as well as the roads and general infrastructure
• The British home buying market comprises approximately 60% of the total foreign demand in Cyprus
• There is a large ex-pat community, plus a lot more Brits who own holiday homes on the island
How to Buy In Cyprus
Estate Agents: Use a recommended agent who is based in either the UK or Cyprus or both. Check that the agent (or the developer) is a member of FOPDAC (The Federation of Overseas Property Developers, Agents and Consultants).
Budget: As well as the price of the property itself, you will have to allow for extra fees and costs, so stick to a realistic budget. There will be legal and solicitors fees (about £1,100 – which are payable on the signing of the contract), land registry/transfer fees which are calculated on the value of the property, stamp duty and VAT when buying new-build. In all, set aside 11% of the purchase price for expected costs. There will also be ongoing costs such as maintenance and taxes to pay.
Inspection trips: These are a great way to view potential properties and will involve subsidised flights and accommodation, but only go on one if you can pay a deposit.
Aristo Developments' Top Tips For Buying In Cyprus
• Europeans are entitled to freehold ownership of a villa or an apartment. Europeans who acquire a permanent or temporary permit can register in their name as many properties as they want, provided they sign a confirmation to the government that they will stay for five years.
• Real estate transfer tax fees are necessary in order to transfer freehold ownership to the name of the purchaser. The transfer fees will be paid when the transfer of the title deed in the name of the purchaser will take place. The purchaser is responsible for the tax payment. The rates are on a graduated scale.
Value of property (CYP) Transfer fee rate (%)
Up to 50,000 3
from 50,001 to 100,000 5
from 100.001 and over 8
The annual immovable property tax is calculated on the market value of the property as at 1st January 1980.
Market value Annual property tax (CYP) (%)
Up to 100,000 Exempt
100,001 to 250,000 2.5
250,001 to 500,000 3.5
over 500,000 4.0
• Transfer of ownership from the vendor to the purchaser is undertaken by a simple procedure through the Cyprus Land Registry Office, either by the buyer in person or by appointing a third party with a power of attorney. The transfer of ownership requires a permit from the Council of Ministers.
• For a temporary permit you need a bank account in Cyprus and a sales agreement of the property purchased. For a permanent permit you must also establish evidence of a secured annual income of not less than CYP5.600 per person plus CYP2.700 for each dependant person. This law is subject to change.