Apartment Building Investment
Real estate investment is an extremely broad term. There are multiple different branches under commercial and residential property and finding the correct property type can seem like a struggle at times. To make it a little easier we thought we would go through all the information you need to know about one particular type of project, apartment complexes and why you should invest in apartment buildings in Cyprus.
We will show you how apartment buildings can add diversity to your portfolio as well as the pros and cons. We will also discuss why investment in apartment complexes tend to cost more but why they offer so much more than single family home investments.
The Different Types of Apartment Complexes
There are two types of apartment buildings you can invest in. One is considered as residential investment, consisting of 2 to 4 units. These units are often managed by the investor as there are only a few tenants. You will frequently here that this is how investors started out and even where they lived themselves. The other type of investment is under the commercial category, large complexes containing 5+ units. These apartment buildings are usually for the more experienced investors as they include a deep level of involvement financially and physically.
Whether you choose to invest in small or large complexes will depend on your experience and commitment however there are plenty of opportunities for both in Cyprus.
Why Invest in Apartment Buildings in Cyprus?
Apartment building will always be in demand, create constant cash flow and adding value to complexes is easier than adding it to single-family homes. It seems obvious why investment in apartments is a good idea but let us go into further detail.
There is a high demand for apartment complexes everywhere but especially in countries such as Cyprus. This is due to the fact that the market is not only open to residents and citizens but also tourist. The island sees a high number of tourists each year as well as students and summer workers, all of which are looking for apartments. There is also a need for more apartment buildings in the major cities such as Larnaca, Limassol and Nicosia. With a rise in global companies moving their offices to Cyprus, the need for apartment complexes to house employees for long term rentals is also rising so the investment of apartment buildings is Cyprus is a very smart move to make in the coming years.
Complexes and Adding Value
Apartment complexes are much easier to add value to in comparison to single-family units. The nature of these buildings allows an investor to add amenities far easier than adding features in single family homes. For example, extra space in a complex can be used for an onsite gym or laundry room and will instantly add great value onto the apartment building. There does not need to be a drastic change to apartment buildings in order to increase the value, simply improving the lighting will go a long way. New fixtures to light the building from the outside can create a much more appealing look for current tenants as well as prospective ones.
Finally, improving the parking lot in apartment complexes can certainly add value. Again, it does not have to be a dramatic change, painting the area and removing any stains, mold or rust will create a fresh, hygienic parking space. Features like these will benefit the tenants as well as create positive reviews and attract new tenants, meaning it will increase cash low and improve resale over time.
Pros and Cons of Investing in Apartment Buildings
Like investment, investing in apartment buildings has its pros and cons. We have created a small list of benefits and drawbacks that need to be considered when contemplating investment in apartment buildings in Cyprus.
Pros
Investors create larger returns on multi-family projects than single-family homes.
Apartment buildings are valued by the income they produce in relation to other complexes in the same area. So, not only do Investors typically know the value of their apartments, they also know the value of their competition. If an investor were to add features like the examples, we mentioned above the value would increase and this is known as control on appreciation.
An apartment building means centralized operations. Handling inspections, meeting contractors and collecting rent is easier with complexes than numerous single-family homes as there is less travelling involved.
Cons
The investment of apartment buildings in Cyprus will require a large cash outlay.
Investment in complexes requires consistent management. An investor will need to hire a company to manage the properties. This is a constant expense whereas single-family homes do not need this.
Conclusion
With real estate investment having such an extensive span of subjects it is understandable that people are unsure of what type of property to invest in. There are multiple different options especially when considering investment in Cyprus; commercial buildings ranging from hotels to retail parks and residential properties such as villas.
One type of property that crosses over both commercial and residential is apartment buildings and deciding to invest in apartment buildings in Cyprus is very popular. Investors find the island so appealing for investment in apartment complexes due to EU membership, taxation benefits as well as many other benefits. Additionally, apartment buildings in Cyprus can target tourists and seasonal workers as well as permanent residents and citizens. They also add diversity to an investor’s portfolio making them very attractive in the investment market and so it seems clear why investing in apartment complexes in Cyprus could be your next venture.
