The real estate investor is accustomed when he asks about real estate in the canter of Istanbul, such as Sisli, for example, that he is first offered the following option:
A modern tower with a wonderful view and excellent finishing, perfectly built above a metro station.
There is no doubt that this option is a good investment option, especially if the investor finds a similar tower, but in the early stages of construction. This means that the chance of increasing the capital upon handing over the project may actually reach 70% within three years on the basis of the dollar.
But the price of one room apartment in this tower starts from $ 650.000, and if it is under construction, it can start from $ 440.000, and therefore in all possibilities obtaining a new property in Sisli needs a budget that exceeds $ 400.000, which is a higher budget than the calculations of some investors, so they resort to the second option:
An old property in a sub-neighbourhood in an old area of Sisli as in the picture below:
So that the investor can obtain a two-bedroom property at a price of less than $ 150.000, and thus he feels proud that he was able to find a property in the same municipality, but at a much lower price than what the first real estate consultant gave him.
The surprise here is that this investor did not correctly calculate the real estate investment equation, which states the following:
Investment return = rental return + capital increase when reselling the property later.
With a simple calculation of the rental return for an old property in a sub-neighbourhood in Sisli as a percentage, we will notice that it will not exceed 4% at best, and the investor will initially find it difficult to find a tenant for his property because the property is old, and the trend today is for modern properties with a security and protection system.
The second point, which is the most important, is that when reselling later, there will be great difficulty in finding a buyer who wants to obtain an already old property in light of fears of increasing building wear and its inability to withstand even a medium-intensity earthquake, and this will lead to selling the property at a price even lower than the price that the investor bought it for the first time (according to our experience on reality) and therefore any gains that the investor achieved from leasing will be lost to compensate for the initial capital.
The important question here:
Is there a middle ground for owning a relatively cheap property in the canter of Istanbul?
In fact, Istanbul is a much larger city than having limited options, and therefore those wishing to own property in the canter of Istanbul (Sisli, for example) do not have to buy a property in a modern tower (albeit a better investment according to the investment equation), but rather they can obtain a relatively modern property in a simple building, but at the same time, it includes all the basic services required by the tenant.
If we are talking about a property that is more than 10 years old, with modest advantages and modest spaces, we can also get a two-bedroom property up to $ 350.000, or a one-room property up to $ 180.000, which is a big difference from the first option.
Who is suitable for these relatively cheap new real estate in the center of Istanbul?
+ The buyer who wants to obtain an apartment in the center of Istanbul in order to use it during his frequent visits to Istanbul and his desire to have a private place in it away from hotels.
+ The investor who is well aware of the investment equation and makes its calculations accurately to ensure that the equation is profitable by making sure that the tenant who will find him is ready to pay high rent (and it is better to rent the apartment with furniture to achieve a higher return) and at the same time he must be sure of his ability to sell it later An amount higher than the one in which he bought the property.
+ For those who want to live in the center of Istanbul within a limited budget, this type of real estate combines modernity and security found in modern towers, and at the same time, at an average price that suits his budget.
+ For the investor who owns many properties and has sufficient knowledge of managing hotel apartments, he can benefit from a group of apartments in the center of Istanbul to turn them into hotel apartments that offer him an annual return that may exceed 10% if the real estate is managed appropriately.
Note: An investor of this type must be sure of his real estate management team and not rely on a real estate brokerage company that promises him to carry out hotel leasing business only for the purchase process to take place.
What are the factors affecting real estate prices in the center of Istanbul?
We previously talked about 20 factors affecting real estate prices in Istanbul, and now we can summarize the following if we single out the center of Istanbul for mention:
1. The age of the building is a factor influencing real estate prices in general, but its importance increases in the center of Istanbul such as Sisli when modern real estate is available with an age of five to ten of years, up to old real estate with an age of more than 20 years.
The effect of this factor may be less in an area such as Fatih, since all the construction therein is ancient, or in an area such as Maslak Vadi Istanbul, since all the urbanization therein is modern, but the diversity in Sisli gives the age of the building great importance in determining its value.
2. The neighbourhood in which the property is located, so the more the neighbourhood is spacious and the property has an open view in general (and the Bosphorus view in particular), the higher the price of the property will increase significantly, because Sisli is a crowded municipality being the center of Istanbul, and therefore obtaining an open place in it is considered a very big advantage unlike areas far from the center of Istanbul, as the open view does not constitute a decisive factor in the price of the property.
3. Proximity to public transportation is a given in the center of Istanbul, but the importance and impact of this factor increases whenever there is more than one type of transportation close to the same property (metro + metrobus + buses + minibuses).
Also, the proximity of this transportation station to the property, according to the first tower we talked about today, the metro station can be located exactly at the entrance of the tower, and this significantly affects the increase in the price of the property, since a property like this can be used as a commercial activity.
4. The proximity of this property to the main road affects the price of the property because the center of Istanbul is necessarily crowded, and therefore access to the main road within a short time is very important in pricing the property, because it necessarily affects the rental return and the price of the property later when you want to resell it.
There are many things that also affect real estate prices in the center of Istanbul, and in order to obtain more details and suitable offers for you, all you have to do is contact us for a free real estate consultation.
