Last week we completed the sale of our Cyprus villa, and I said I'd open the books once it was done. So here it is, the whole thing, with real figures. What it looked like on paper, and what actually landed in my hand. They are not the same number, and the gap is the lesson.
I sold it for €175,000 more than I paid. Sounds great. Let me show you how much of that was actually profit, and whether it was even worth it versus just renting.
For context: I bought this villa for cash in 2020, we lived in it as a family for five and a half years, and we sold it last week. So this is the real thing, start to finish.
Bought at €420,000 and sold at €595,000. On paper, that's €175,000.
Now take off what I spent.
Buying it cost €11,000 in transfer fees, plus about €4,200 in legal fees.
Then the house itself:
€22,000 on insulation, because it had none and we sat in coats in January
€15,000 on a bedroom and office renovation
€10,000 on solar
€4,500 on air conditioning
€4,000 on new guttering
€3,000 on a pool safety fence, which isn't optional with small kids
€3,000 on repainting, plaster and general tidying
€5,000 to an architect for extension plans that never got approved and never will
And about €2,000 a year on maintenance and things breaking, so another €10,000
That's €76,500 I put into that house.
Then selling it. Agent commission at 4.8 percent, which is €28,500. Plus €6,000 to the lawyer.
Add it all up. I had €511,700 in that house. I got €560,490 back after costs.
So my actual profit was €48,790. Not €175,000.
Over five and a half years, that's about €8,500 a year. A return of around 9.5 percent across the whole period, so call it 1.7 percent a year before you even think about inflation. And that's not counting the €15,000 of furniture we bought and sold for €3,000.
Now, I'm not crying about it. We lived in that house. We had a son there. It gave us a life, and it went up in value while we used it, which is more than you can say for most things you spend money on.
But if you're moving abroad and doing sums in your head about what a place might be worth in five years, you're probably going to be a long way off. I certainly expected more.
The gap between the headline increase in value and the money actually in your hand is enormous. Mine was €126,000.
I'm not a financial adviser, and this is one house, one deal, in one country. But those are the real numbers, and they're the ones nobody shows you.
As for whether I'd have been better off just renting the whole time, that's what I'm breaking down in the next email. It's closer than you'd think.
If you're weighing up buying versus renting abroad, or there's a number you can't get a straight answer on, hit reply. I read every one.
Talk soon,
James Hopkins