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Many investors who are interested in starting their real estate investment in Turkey find themselves facing the most important question:
What are the best Turkish cities for real estate investment?
Many of them rely on the advice of relatives and friends with previous experience, which can potentially put their real estate investments at risk because what worked in the past does not necessarily guarantee success today. Also, the increase in property prices after purchase does not necessarily indicate a successful investment.
In this article, we will discuss the different available options and present our conclusion based on Right Home company.
What are the prominent Turkish cities that investors believe are suitable for real estate investment?
*Istanbul: As the largest city and economic center of Turkey, Istanbul has attracted significant real estate investments in recent years. It offers diverse investment opportunities, including residential, commercial, and mixed-use properties.
*Ankara: As the capital of Turkey, Ankara has a stable real estate market and offers diverse investment options. The city has witnessed infrastructure development and urban renewal projects, which can attract investors.
*Izmir: Located on the Aegean Sea coast, Izmir is the third-largest city in Turkey and has a growing real estate market. Its mild climate, coastal location, and expansive infrastructure make it an attractive destination for both local and foreign investors.
*Antalya: Located on the Mediterranean coast, Antalya is a famous tourist destination and has experienced significant real estate growth. It offers opportunities for investment in holiday homes, hotels, and resorts due to its beautiful beaches and pleasant climate.
*Bursa: Located near Istanbul, Bursa has become an attractive destination for real estate investment. The city has witnessed infrastructure development, industrial growth, and urban transformation projects, making it a potential investment area.
*Trabzon: Located in northern Turkey on the coast of the Black Sea, Trabzon is known for its cold climate. However, some investors believe that establishing a successful real estate investment in Trabzon is possible. Despite its weather, the city offers potential opportunities for real estate investment.
*Kucaili: The regions of İzmir, Şirince, and Maçka are exceptional tourist destinations that attract tourists, particularly during the summer season, and sometimes throughout the year. Based on our research, we have also noticed that several investors believe these areas are suitable for starting a profitable real estate investment.
Now, to study which of these cities is more profitable in terms of investment, we need to properly define the return on real estate investment in Turkey:
Return on real estate investment in Turkey = Capital Appreciation + Rental Yield
Here are several important notes to clarify this equation:
+There is no successful real estate investment in a city or region where the property cannot be easily resold. Therefore, no matter how high the profits may appear on paper, they cannot be realized and collected effectively to start a new investment.
+The change in capital does not only mean an increase but also a decrease. It is possible to buy a property for $100,000 and eventually be forced to sell it for $80,000, resulting in a negative change. This is one of the most important mistakes that investors make when purchasing their first property in Istanbul, regardless of their previous experience in the real estate field in their own country.
+The optimal return is achieving a high increase in capital without focusing on obtaining a high rental yield. This is because the capital appreciation in construction projects can reach up to 35% annually in some projects, while the rental yield does not exceed 8% under the best conditions. Therefore, choosing a property under construction in the right location has the potential to double the capital upon resale after 3 years.
+When aiming to achieve a high rental yield, it is important to note that the demand for the property should be consistent throughout the year and not limited to a specific season. Therefore, the overall annual yield should be high, rather than just the yield during specific months.
+Not every purchase of a property under construction is considered a successful investment. Some projects do not get completed on time or delivered according to the agreed specifications. Therefore, a detailed study with the assistance of experts in the field is necessary to examine the track record of the property developer before making an investment decision in any project.
+If the main objective is investment, as our article's title suggests, then the number of rooms or the size of the property is not the priority. Instead, what the market demands is what makes this property a successful investment.
What is the best city in Turkey in terms of resale potential?
Reselling an apartment in Istanbul is relatively easier compared to some other cities in Turkey due to its dynamic real estate market and high demand. Istanbul is a vibrant and rapidly growing city with a large population and a diverse economy. It attracts both local and international buyers, increasing the chances of finding potential buyers when reselling an apartment.
However, it is important to note that the ease of resale can depend on various factors such as location, quality, condition of the apartment, prevailing market conditions, and pricing strategy. Apartments in popular and well-connected neighborhoods, with amenities and good infrastructure, tend to have higher demand and may be easier to sell.
In addition, it is crucial to consider the overall conditions of the real estate market at the time of resale. Market fluctuations, economic factors, and changes in government policies can all impact the ease of resale and the potential returns on your investment.
To enhance the chances of reselling an apartment in Istanbul, it is advisable to work with a reputable real estate agent or consultancy firm that has experience in the local market. They can provide guidance on pricing, marketing strategies, and assist you in navigating the legal and administrative procedures involved in the resale process.
What is the best city in Turkey in terms of rental yield?
Based on general market trends and rental potential, Istanbul is often considered one of the best options for rental income in Turkey.
Istanbul, as the largest city in Turkey, offers a diverse and dynamic rental market. It attracts a large number of tourists, both local and international, throughout the year, creating a strong demand for rental properties. The cultural landmarks, historical sites, and vibrant atmosphere in Istanbul make it a renowned destination for travelers and expatriates.
Additionally, Istanbul's economic significance and business opportunities attract professionals and entrepreneurs, leading to a steady demand for long-term rentals in various neighborhoods and areas. Areas such as Sultanahmet, Taksim, Kadikoy, and Besiktas are known for their rental income potential due to their central locations and proximity to famous attractions.
It is important to note that while Istanbul offers promising rental income opportunities, it also has a highly competitive real estate market. Property prices can be relatively high compared to other cities in Turkey. Therefore, conducting comprehensive research and analyzing local market conditions is necessary. Factors such as location, property type, and target market need to be considered before making any investment decisions. Seeking advice from local real estate experts or property management companies can provide valuable insights tailored to your specific needs and goals.
What are the factors that affect real estate investment?
1- Location: The property location is one of the most important factors that affect real estate investment. Factors such as proximity to amenities, transportation networks, schools, employment centers, and desirable neighborhoods can significantly impact the property value and its potential appreciation.
2- Market Conditions: General market conditions, including supply and demand dynamics, interest rates, economic stability, and government policies, can have a significant impact on real estate investments. Understanding market trends and predicting future conditions is crucial for making informed investment decisions.
3- Property Type: The type of property, whether residential, commercial, industrial, or mixed-use, can affect investment opportunities and returns. Each property type has its own set of considerations, such as rental demand, vacancy rates, maintenance costs, and market cycles.
4- Rental Income Potential: For income-oriented investors, potential rental income is a critical factor. Rental demand, rental rates, occupancy rates, and rent growth potential can significantly impact the profitability of real estate investment.
5- Property Condition and Quality: The condition and quality of the property can affect its value, attractiveness, and potential appreciation in the future. Well-maintained properties and modern amenities often attract more buyers or tenants and may have better long-term value.
6- Infrastructure Development: Infrastructure development, such as transportation networks, roads, utilities, and public facilities, can positively impact property values in a particular area. Investments in infrastructure can enhance accessibility and quality of life, attract investors, and stimulate property value appreciation.
7- Legal and Regulatory Environment: Understanding the legal and regulatory environment is crucial for real estate investors. Factors such as property rights, zoning laws, tax policies, and permits can significantly impact the feasibility and profitability of investments.
8- Economic Factors: General economic factors, such as GDP growth, employment rates, inflation, and consumer confidence, can impact real estate investments. A strong economy often leads to increased demand for properties and can contribute to value appreciation.
9- Demographic Trends: Demographic factors, including population growth, migration patterns, and changes in household composition, can influence the demand for properties. Understanding the target market and its preferences is important for identifying investment opportunities.
10- Financing and Interest Rates: Access to financing and prevailing interest rates can affect real estate investment decisions. Favorable financing conditions and low-interest rates can increase purchasing power and improve investment returns.
It is important to note that the significance and impact of these factors can vary based on the specific location and property type. Conducting comprehensive research, consulting with experts, and evaluating individual investment goals are crucial steps for successful real estate investment.
