This article is intended for real estate market researchers in Istanbul who are looking to start their first investment or for investors who have already started and want to evaluate their current investments in case of success or assess better opportunities for future investments if their current investment is not as desired.
This article is not intended for individuals who randomly buy properties under the pretext of a unique opportunity and then struggle to rent them out and try to sell them at the right time for buying and buy at the right time for selling.
Before delving into successful real estate investment strategies, let's agree on a set of principles for real estate investment in Turkey:
- Real estate investment in Turkey means investing in Istanbul only due to its high local and foreign demand. It is the largest city in Turkey in terms of population, trade, tourism, business, and everything else. Therefore, it is not advisable to evaluate any investment opportunity outside Istanbul unless the investor already owns a large number of investment properties in Istanbul and wants to diversify and choose other cities.
- Real estate investment in Istanbul primarily relies on resale and secondarily on rental income. The importance of each cannot be confused, and a property cannot be considered a successful investment just because its rental yield is high but cannot be resold later.
- Timing in buying and selling is the key factor in the success or modest success or even failure of real estate investment.
- Real estate investment is solely based on supply and demand theory and not on the opinions of real estate consultants, whether experienced or inexperienced. Any property that does not have high demand cannot be resold, and therefore, a successful real estate investment cycle cannot be completed. At the same time, a limited supply is very helpful in building a successful real estate investment.
Now, let's remember the foundations of a successful real estate investment (the more we fulfill a larger portion of these foundations, the more the success of the real estate investment is guaranteed) to apply them to successful real estate investment strategies later.
Foundations of Successful Real Estate Investment in Istanbul
- Buying property at a lower price per square meter compared to neighboring ready properties.
- Having advantages in the project where the purchase is made that are better than the surrounding projects.
- The fewer units within the complex, the more successful the real estate investment.
- A prime location close to existing transportation and roads, or those planned for future development.
- The closer the property is to the city center, the higher the demand and, consequently, the higher the return on investment.
- Implementing the right timeline for each type of property.
- The development of the surrounding area greatly contributes to improving the return on investment if it aligns with the appropriate timeline for the property.
- The reputation of the property developer and the company responsible for project management after delivery are important factors in investment success.
Real Estate Investment Patterns in Istanbul 2024
1-Buying property near the city center under construction
This traditional pattern is considered one of the most successful real estate investments, offering high returns. Choosing a property under construction in the early stages in the center of Istanbul means the price per square meter is lower than comparable ready properties. It also fulfills the theory of high demand, and often such properties are developed by renowned developers and managed by reputable hotel management companies. Hence, it combines most of the foundations of successful real estate investment.
How to find this type of property? Simply contact us for a free professional real estate consultation.
2-Buying property far from the center of Istanbul but with strong advantages
This type of property should still be under construction and can have important factors such as a sea view, proximity to transportation and important roads, and a reputable property developer. All of these contribute to the success of real estate investment and achieving high returns within the appropriate timeline.
Sometimes, high-quality finishes, the property's location in a central area close to all essential amenities, and the development of the neighborhood within a short period are key to a successful real estate investment.
How to establish a suitable timeline for each real estate investment pattern? We will provide you with realistic guides and figures.
3-Combining rental yield and capital appreciation in a relatively long-term timeline
Investors may have a limited budget that doesn't allow them to purchase a property with superior investment advantages in the center of Istanbul or may want to buy multiple properties within their budget. This doesn't mean that building a successful real estate investment is impossible. However, buying property far from the center means that the ease of resale is not guaranteed. Therefore, for this type of investment, a relatively long-term timeline should be considered. The chosen property should have a high rental yield to benefit from the rental income alongside capital appreciation. This means that delaying the sale of the property won't cause concern for the investor, as they can already enjoy high rental income during this period.
What are the real estate properties that suit this long-term timeline? Contact our specialized team to present them to you along with their investment plan.
Now let's talk about the top 3 patterns of successful real estate investment, but what about the patterns of failed real estate investment that many investors have fallen into or that any new investor may fall into?
Failed real estate investment can be defined as investment that lacks the foundations of proper real estate investment. Here are some examples that we see daily:
What are the patterns of failed real estate investment?
- Buying a ready-to-move-in property at a price per square meter that is the same or higher than its counterparts and then being surprised that selling it quickly and profitably is not possible.
- Renting out the property with an annual contract without consulting an expert familiar with rental laws, resulting in low rental income and being stuck with a tenant who refuses to vacate the property.
- Buying cheap ready properties in different parts of Istanbul with the intention of renting them out on a daily or weekly basis without realizing that new regulations prohibit this type of rental from now on and expose the property owner to significant fines.
- Buying a property in an area with an oversupply and expecting to sell it easily and quickly later.
- Buying a property at a time when prices were high and market demand was high, and attempting to sell it during periods of inflation and recession, which are considered ideal times for buying, not selling.
- Buying land in any area of Istanbul with the intention of developing a project on it and selling it to achieve high profit.
- Buying land in any area of Istanbul with the intention of selling it later to a developer who plans to build a project in the area within the next three years.
- Buying a commercial shop leased with a 5-year contract renewable with income in Turkish lira.
- Buying a villa with the intention of investment through resale later.