Real Estate Investment in Turkey

50 golden tips for real estate investors in Turkey

Last edited:Feb 11, 2024
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50 golden tips for real estate investors in Turkey
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Introduction

This article has been compiled and written based on our accumulated expertise in the field of real estate investment in Turkey for over 10 years. It is not a random article generated by artificial intelligence that pretends to have a wealth of information but proves impractical when applied in reality.

 

A- Tips related to the concept and principles of real estate investment

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1- The chosen property should align with the primary investment objective, whether it relies on capital appreciation in projects under construction for resale upon completion or focuses on high rental yields that can attract rental income significantly above the modest rental yields commonly found in Turkey.

 

2- Profit calculations cannot be accurately assessed until the completion of the real estate investment and the sale of these properties according to the required timeline. For example, purchasing a property for $200,000 and earning an annual rental return of $10,000 does not mean you've made a 25% profit after five years. Your real profit only materializes when you manage to sell the property. Upon selling it for $250,000, you've actually realized a $100,000 profit – $50,000 from rental income over five years and $50,000 from the difference in purchase and sale prices, equaling a 100% return on capital over five years.

 

3- Choose properties in cities with high demand, such as Istanbul, and avoid other cities where resale possibilities are nearly impossible. Even in Antalya and the southern coast, despite high demand for vacation homes, the likelihood of resale with a substantial profit is very low.

 

4-The earlier a property is in the construction process, the greater the expected capital appreciation upon completion, but the risks are also higher at the same time.

 

5- If the property lacks investment advantages that set it apart from neighboring properties in terms of price per square meter or other existing or future amenities, it fails to fulfill the primary investment principle of uniqueness.

 

6- The cheapest property is not necessarily the best for investment. A thorough analysis is required to evaluate the advantages it offers compared to its price. Only then can a well-founded decision be made.

 

7- For investment purposes, the size or the number of rooms in the property does not matter as much as the expected return it offers.

 

B- Tips related to property location

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8- Selecting a prime location is the key to successful resale and the foundation of any real estate investment.

 

9- Properties in city centers generally have a faster investment cycle due to high demand and limited supply. An investment cycle in the city center can be completed in less than three years.

 

10- Properties located away from the city center, such as Istanbul suburbs, typically have longer investment cycles (at least five years) before significant improvements in infrastructure and increased demand are noticed. The duration varies depending on the exact location and demand, both in the near (5 years) and distant (over 10 years) future.

 

11- Anticipate the future of the area, the progress it will undergo, and the supply and demand dynamics at the time you intend to complete your investment plan.

 

12- Do not judge the suitability of a property's location solely by the name of the area it's in. For example, many properties in Istanbul's city center, like Sisli and Besiktas, are not suitable for investment regardless of their prices. At the same time, highly successful investment properties can be found in Istanbul's suburbs, which are often overlooked for potential investment opportunities.

 

13- Try to combine multiple advantages when choosing an investment property location. For example, a property in central Istanbul, close to an upcoming transportation hub, and near an important university offers multiple benefits that can result in a successful resale.

 

14- Choosing a premium location without evaluating the price per square meter at the same time may lead to purchasing an excellent property in an excellent location at a price higher than the market, making resale difficult. This is a common issue with upscale towers in central Istanbul.

 

C- Tips related to types of investment properties

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15- Residential apartments typically have shorter investment cycles compared to commercial units. It's not always a good idea to invest in a commercial unit in a project under construction with the intent to sell upon completion, but this strategy can work for residential apartments within the same project.

 

16- Commercial units usually require less time to reach their peak price, making it easier for investors to exit their investments. However, villas are generally not considered for investment, unless they provide a high rental yield initially and the investor is willing to wait for a specific buyer interested in that particular villa.

 

17- Land with building permits typically has a shorter investment cycle compared to agricultural land (without building permits). Agricultural land in various parts of Istanbul, especially near the Istanbul Canal, is often sold with the unrealistic expectation of generating substantial profits within one or two years. This type of investment usually requires at least 20 years to yield reasonable returns.

 

18- Full buildings intended for use as hotel apartments should be purchased, invested in, and later sold with the same approach, including furnishing and equipping them. Success in this type of investment is not guaranteed without such comprehensive planning.

 

19- Smaller apartments tend to have quicker investment cycles compared to larger ones, whether for rental purposes or resale. Small apartments with areas around 65 square meters are in high demand, particularly in central Istanbul, as they cater to employees with small families who want to be close to their workplaces without paying exorbitant rents for larger apartments.

 

20- Larger apartments with lower price per square meter, even within the same project as smaller ones, may have lower demand in central Istanbul. If you choose a non-central location, larger apartments can still be attractive to renters looking for spacious accommodations.

 

21- A premium location can lead to the purchase of an excellent property at a higher-than-market price per square meter, making resale challenging. This is a common scenario with luxury towers in central Istanbul.

 

D- Tips related to the pre-purchase process

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22- Gather your information from multiple sources without exaggeration to avoid confusion while also considering different perspectives.

 

23- No matter how knowledgeable a real estate consultant you are in contact with may be, it does not exempt you from conducting your own research and verifying the information they provide you with reliable sources.

 

24- Do not be deceived by misleading offers that you receive, whether before your arrival in Istanbul or during your stay while selecting the appropriate investment property. Always remember that the expert real estate consultant who has provided you with an accurate market view during your communication with them is better equipped to identify any opportunities you want to see in the market.

 

25- Focus first on legal information, followed by specific areas. Do not accept any real estate consultant who asks how many rooms you want and then starts sending dozens of random offers.

 

26- Choose your sources and advisors based on the valuable information they provide, and do not be swayed by the attractive facade of someone who speaks with you without offering useful information. In the end, your successful investment is your goal.

 

27- The presence of an active blog section on the website of the real estate consultant you are dealing with is an indication that the experiences of this company are genuine, and you can assess their depth through the depth of the content you read.

 

28- Your positive and consistent response will motivate the expert real estate consultant to continue working with you to their fullest potential. On the other hand, your hesitation and showing of ambiguity may make this consultant feel that you are not interested, and as a result, they may lose communication with you. Consequently, you may lose out on professional real estate advice that you urgently need in a new market

 

E- Tips during the purchasing process

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29- After studying the real estate market for a suitable period and gathering valuable information, whether in person or online, do not forget your primary goal. Do not hesitate when you come across an excellent investment opportunity because it may not be available in the future.

 

30- Chasing the market and waiting for prices to drop based on inaccurate news will only result in missing out on investment opportunities.

 

31- If you have gathered information from multiple professional real estate consultants, it is natural to meet with all of them when you visit Istanbul. We recommend starting with the one you assess as the most professional.

 

32- Negotiation is a precise and complex process, especially in the Turkish real estate market. Ensure that the most skilled negotiator is someone with extensive experience in the market, who has conducted the most sales transactions and has the best reputation.

 

33- Do not compromise when choosing a property. If a consultant (often a female consultant) recommends a property that you believe is not suitable for you, do not buy or even reserve the property unless you are 80% sure it is suitable for you. The result we see from our daily experiences is either purchasing an unsuitable property due to the client's reluctance to contradict the sales representative or reserving an unsuitable property, leading to problems with canceling the reservation and refunding the reservation fees. Sometimes clients completely change their minds due to a situation they encounter.

 

34- Clearly state your requirements to the sales representative when you meet with them. If you have a fixed budget that cannot be exceeded, it is best to mention it to avoid getting a property tour that does not match your requirements, wasting your valuable time and energy in Istanbul. For example, a client who requests the best investment properties without specifying a budget will have the sales representative search in central Istanbul to find a suitable property. If the client's budget is not suitable for properties in the center, they will find that property prices are high, and they may withdraw from the idea of investing at a time when suitable investment properties are available in other areas. The sales representative could have visited these areas with the client if they had disclosed their approximate budget.

 

35- Make sure that you have chosen the right company, not just the right consultant, for the following advice during this stage.

 

F- Tips for after purchasing the property

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36- If you have done everything correctly, you will generally be happy at this stage and should not encounter any problems in the present or future.

 

37- After-sales services are not limited to empty promises made by the sales representative during the contract signing but serve as a complete reference to the company's operations and its past performance. Additionally, the actual duration of the company's presence in the  real estate market is significant. The continuity of a real estate brokerage company for more than five years is a clear indication that it is capable of handling post-sale processes.

 

38- Choosing the right property from the beginning will make the process of renting it out easier and help you achieve the highest return on your investment.

 

39- Selecting the right property from the beginning will make the process of reselling it and ending your investment when you want to much smoother.

 

40- Having a specialized legal team is essential when dealing with the company to protect your investments in Turkey.

 

41- A real estate agent who does not respond to your logical requirements as part of their after-sales services should not be relied upon for your next investment.

 

42- Do not underestimate the advice of the company's legal team, especially if you intend to apply for Turkish citizenship. We have heard of cases where clients did not follow their lawyer's recommendations, resulting in delays in obtaining Turkish citizenship. Sometimes, Turkish citizenship can be revoked for children who have crossed the age of 18 due to negligence, either on the part of the brokerage company or, more often, the investor themselves.

 

G- General Tips

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43- Beware of scams that are often designed not to steal your money directly but to make unrealistic promises that cannot be fulfilled in reality, such as a guaranteed 10% permanent rental return or profits of up to 300% within two years, and so on.

 

44- Be cautious of offers that come with a gift wrap, as they are often (but not always) a deception, such as a guarantee of renting apartments for three years in regular apartments. What happens after those three years? Or offers like buying land near the Istanbul Canal and selling it at double the current price after two years. Be aware that if the square meter price actually increases, the abundance of such offers will prevent you from achieving the desired profit. Or offers like buying two apartments for $400,000 in total, claiming they are suitable for Turkish citizenship.

 

45- Be cautious about buying properties that violate the laws because, in the near future, you will be the only loser. For example, buying a property valued at less than $400,000 but claiming it's suitable for Turkish citizenship when the Turkish government has set a minimum of $400,000, there's no room for manipulation at all.

 

46- Be wary of advice from friends and acquaintances who have made unsuccessful real estate investments and are advising you to buy property in the same area or project, even though their investment is incomplete or unsuccessful. A successful investment is only complete when the property is sold, and thus, if one of your friends bought a property for $200,000, and its price is now $250,000, this is not considered a successful investment unless the owner manages to sell the property and complete the investment.

 

47- Flexibility is required when you come across a property that suits you almost perfectly but is slightly above your budget. Also, if your plan is to sell a property you bought three years ago this year, but the market is suffering from inflation and stagnation this year, selling your property despite that will result in the loss of your profits or a significant portion of them. Thus, the time of stagnation is a time for buying new properties at reduced prices or waiting, and it is never the right time to sell your property.

 

48- A successful investment in real estate is a sensitive and complex process. You should not take it lightly or rely on incomplete experiences of others.

 

49- Every property in Turkey has an appropriate price, but the lack of sufficient information with the sales representative makes them evaluate projects with incorrect criteria. However, what matters to you as an investor is choosing the property that suits you and your plan. Certainly, there are better projects than others when viewed from this perspective.

 

If you have reached this point in this relatively long article, we would like to thank you on behalf of the Right Home company's team. We are very interested in conscious investors who are genuinely interested in obtaining accurate information, no matter how much time and effort it takes.

 

50- We welcome you to Right Home and offer you a free consultation by contacting us to find the best property suitable for you. All you need to do is reach out to us by providing your information or through chat or WhatsApp.

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