Real estate investment returns in Turkey

Real estate investment considered in general one of the most successful investments not only in Turkey but around the world. Countries such as United States of America, Britain, France and Spain made huge real estate investment projects to attract businessmen and billions of dollars to their countries. All countries realize the importance of real estate as a source to their national income, the reason that pushed Turkey to join the race through the past ten years, as it realizes the advantages of real estate investment, and although Turkey is one of the latest promising markets in real estate investment, but according to Bloomberg magazine, Turkey is the 7th most powerful emerging economy in the world because of its geographical location, its strong infrastructure, and has an attractive environment for investment, and of course its nature as a touristic country in first place, Istanbul, Antalya and Mugla are unique from the rest of the Turkish cities with an investment return that is the highest and most competitive in the real estate market, whether locally or globally.

Definition of real estate investment

It is any unit that represents a fixed asset in a fixed place that cannot be moved from one place to another, without being damaged, such as lands, buildings, villas, and houses.

Why real estate investment in Turkey is successful?

Although Turkey considered as new market in real estate but it is the second most active and strongest construction market in the world, and Turkey ranks fourth among the top ten real estate investment countries in the world, due to the facilities that the government provides to foreigners who wishing to own a property, and actually there are several factors helped Turkey like:

• The stability that Turkey enjoys compared to the countries of the region.
• Legal reforms that made by Turkish government to support real estate investment.
• The nature of Turkish society, which combines Western European civilization and Eastern customs and traditions.
• The touristic nature and the presence of many sightseeing back to the Byzantine era or the Ottoman era, which was reflected in museums, temples and monuments.

The advantages of real estate investment in Turkey

Real estate investment has many advantages, the most important of which are:

• Obtaining a fixed, continuous and guaranteed monthly financial income.
• Increasing the value of the property in the long term, because the real estate market like gold and oil, is the only market increases by time, so after several years the investor can sell it and increasing his capital, and this type of investment with long-term investments is an additional saving for the retirement and as insurance for the family.
• Obtaining Turkish citizenship by owning a property worth 250 thousand US dollars.

Types of real estate investment

1. Residential real estate Investment, which is investment in real estate used for residential purposes, such as apartments and villas.
2. commercial real estate Investment, which is investment in property that is not intended for living, such as commercial offices, companies, and shops.
3. Student housing projects that depend on its near to universities, and the entire project is depend on international students who come to study in Turkish universities.
4. Investment in stores and warehouses is also a successful investment.
5. Hotel projects and hotel apartments, as it is possible to invest in hotels or hotel that have continuous return for many years due to the large demand for it.
6. Commercial offices, that have profit return due to lease them to companies that are constantly established in Turkey, and construction companies allocate some office buildings to meet the requirements of investors who open their company headquarters here.

Types of real estate investment return

Real estate investment depends in its principle on two main pillars to obtain the income:

Rent: Many foreign investors and even Turks are buying residential real estate in Istanbul and they are renting it, whether the rent is an annual or tourist rent

- Annual rent: 

It is defined as a fixed return for the investor every month, actually the demand for annual rent increases significantly in Istanbul as a result of the coming foreigners who move their lives to Turkey, which creates great opportunities for investment with a guaranteed return, knowing that the annual rent is in Turkey.

- Hotel rent: 

It is the second type of rent and is known as “touristic rent”, which is considered more profitable for some investors because it depends on touristic seasons such as summer, mid-year holidays and Christmas, and most of the construction companies for complexes with hotel apartments give a rental guarantee to the investor for several years with an excellent profit return, and therefore choosing hotel system apartments will be successful. In the first half of 2018, the number of residents in hotels or hotel apartments in Istanbul was about 2 million foreigners.

- Resale: 

So many cases of investors they buy real estate under construction and after that they sell it once the project will be completed of the construction process and obtains a high profit return.

How is the return on investment of a property calculated?

First of all, the investor must be specific from the beginning which type of investment that suits him. There are investors who prefer the annual rent allocated to residents and workers who have moved to live in Turkey, and there are those who are looking for hotel projects managed by the construction company, and they have a contract with the construction company that specifies the percentage of profit or return real estate investment.

At the annual rent, the increase is calculated on an annual basis, and the rates of increasing are ranging from 10-20% of the value of the contract between the tenant and the property owner, and the increase depends on the district and type of property, but in last October of 2021 the state notified the apartment owners that they have to increase the rent for this year by no less than 30-40% and in some areas increased by 100%.

- In the hotel apartment rental, the investor must choose a strategic and vital location, close to the touristic areas, to guarantee a rapid return for his investment, in which construction companies are responsible for managing the apartment for the investor, often the agreed return is about 6% for a period of 5 years, the investor can get 30% of the property value.

- Resale: If the location of the property is in a promising and developing area, it means that real estate prices can be increased well, here the investor gets 50-70% over the value of the original price, and this value increases to 100% over the original value. The promising real estate districts are Basin Express, Avcilar and Basaksehir.

Factors affecting in the value of real estate investment

• Balance between supply and demand.

• The location and area of ​​the property.

• Rental property returns.

• Natural factors such as the surrounding environment like weather, as Istanbul enjoys cold weather in some months, which sometimes negatively affects the movement of tourism and real estate of course.

• Economic and political factors such as inflation or the imposition of sanctions on Turkey, as the value of real estate is linked at times to the general economic and political effects in the country.

At Ramzy Real Estate Company, we are glad to accompany you on the journey of buying property in Turkey and to provide you with a range of services to make the process smooth and easy , as we are always keen to present a variety of options for residential and investment properties in addition to helping you obtain Turkish citizenship for those looking for it.
Our services:
- Legal advice .
- Property Management.
- After-sales services .
- Legal services and obtaining Turkish citizenship.
- Buying and selling real estate in Turkey.
- For more details, you can contact us via the communication platforms or via the WhatsApp attached on the site.

Editing by Ramzy Real Estate Team ©

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