The real estate market in Turkey is currently at the early stage of development, international experts say. Yet the quality of construction in the country is consistently top-notch and the Turkish economy is considered to be one of the twenty strongest in the world. This means investors can safely make money on local properties if they investigate the market a bit. In the article below, you will find basic guidelines for those who have little experience in investments but can consider trying this lucrative opportunity.
How to Make Money on Turkish Real Estate
Even if you are not an experienced investor, you can choose among at least six strategies to make a profit:
- Select a reliable construction company and purchase accommodation in the foundation stage. You will not need to pay the full sum upfront — most developers allow customers to transfer funds in installments. If needed, you can apply for a mortgage in a local bank. In Turkey, foreigners can easily get bank loans on rather favorable conditions. Once you get the title deed and transfer the last installment to the developer, you can resell your house or apartment with an approximately 20% margin.
- You might want to sell your property before the construction is finished. In this case, you have a right to ask the bank to transfer your loan to the buyer. Such deals are common for the Turkish market and you will be able to make a profit.
- Those who are dreaming of a premium property but cannot afford it right away might purchase a more affordable option and then exchange it for a pricier one. You will not need to pay the tax at the land registration office if you tell the officials that you are making an exchange.
- Buy a second-hand property, renovate it and resell it for a higher price. To use this strategy, you should have some background in construction. You should be able to assess the current condition of the premise and calculate how much funds and effort you should invest in it. Fortunately, there are plenty of second-hand properties on sale that can boast of a superb location. You purchase an old house with a sea view, whitewash its walls, make cosmetic repairs and find a happy customer for it.
- You can apply the same strategy to land too. Buy a vacant land at an affordable price and add value to it. You can plant a garden there, construct a farm, pave roads and so on. Buying land is a smart variant for short-term investments. If you prefer long-term investments, opt for a field. A field can bring you harvest but the prices for this type of property grow slower than for land. When choosing a piece of land, check its zoning status. Maybe, in a few years, some developer wants to construct a building here. For this purpose, square or rectangular pieces of land are ideal.
- Turkish authorities invest large sums into urban transformation. You can acquire a property in an area that should be renovated soon and then resell it to the contractor.
These strategies might seem easy to follow. Yet in practice, each region and neighborhood has its peculiarities. It would be wise to hire a real estate consultant who would explain to you all the potential risks and share recommendations on how to make the most of the deal. The expert will be able to calculate the property’s annual increase in value more precisely than you. Maybe, your advisors will recommend to you some alternative strategies for making a profit. For instance, you might purchase arid land, mount solar power systems on it and sell it to the government.
Define Your Budget
The price of the property will depend on the region where it is located. The main touristic hubs are predictably the most expensive. Let us consider the example of Istanbul property for sale:
- On the outskirts of the city, you can purchase a worthy apartment for less than $100,000. The suburban infrastructure is rather developed but you would still need to commute to the center of the city to see the sites, visit events or enjoy high-end facilities. Foreigners might find it a bit boring to live in the suburbs — but they can rent this accommodation at a profit all year round.
- Those planning to invest between $100,000 and $500,000 can locate decent family-style accommodation. Even though it will not be situated in the most prestigious part of the city, you will still be able to enjoy modern planning, a well-groomed neighborhood and maybe even a sea view.
- Properties with a price tag between $500,000 and $1,000,000 can be considered as the affordable segment of luxury. These are especially popular for short-term holiday rentals. If you invest in a premium apartment at the early stage of construction, you should be able to resell it later at a large profit.
- Real estate that costs over $1,000,000 deserves to be called high-end luxury. At such a price, you can select a superb villa or a penthouse apartment with five-star hotel facilities.
As it was said at the beginning of the article, the Turkish real estate market is still in its infancy. This means you can purchase properties in excellent locations two or three times cheaper than in Europe. For this, you should look outside the popular resorts and turn your eye to lesser-known areas. What seems to be a small seaside village today might attract affluent developers tomorrow. Use your chance to make money on Turkish real estate as long as the opportunities are still vast!
Investors from Europe, North America, Middle East and CIS countries eagerly purchase properties in Turkey. Many of them buy several houses: they keep the best one for themselves and rent or resell the others. Thanks to political stability and the ongoing economic progress, this country is rated consistently high in the international investment listings. If compared to other regions, the foreigners’ risks here are reduced to a minimum.