How to invest in Real Estate in Turkey ?
Real estate investment is the practice of owning immovable assets “real estate” for the purpose of selling or exploiting them. Real estate investment is one of the most important types of investment around the world, because it provides long-term stability for investors, unlike other types of investments such as trade offers, stock trading and other types of investment that Involve risk. This stability or “security” is mainly due to the fixed and permanent nature of real estate, and this is what prompts many major companies and global investors to invest part of their capital in the real estate sector, even if real estate is not the main form of investment that they practice.
This demand for real estate investment prompted many countries to compete to provide facilities and incentives to investors wishing to invest in real estate to attract them to it, such as tax exemptions and amending laws and government procedures and the renewal of infrastructure and the provision of building materials at reasonable prices.
Turkey was among the pioneers in the real estate investment sector, as the Turkish government worked to provide the necessary facilities for local and foreign real estate investors alike and worked to attract capital from all over the world to invest in real estate in Turkey.
There are many ways and forms of real estate investment in Turkey in terms of the time set for this investment, and in terms of the amount of investment return, and this varies according to the investors’ view of the market, their plans, and their goals for this investment.
Before talking about the types of real estate investment in Turkey, it is necessary to highlight some of the main points that must be considered before deciding to invest money in the real estate sector.
Important points to ensure a successful real estate investment:
♦ Investment evaluation and market monitoring: This is one of the main steps that precede the real estate purchase process, where the investor must calculate the feasibility and investment return from the purchase, determine the best areas and type of investment required, is it short or long-term, in short, determine the expected future return from this investment.
♦ Searching for the best price in the market, and the most appropriate time to buy.
♦ Determining the costs of the purchase process and the expenses that it entails, as well as the annual fees, expenses, and taxes for the property.
♦ Consultation with a real estate expert: This is one of the very important points before any investment, which is to seek advice from experienced people, and this is what we at Taksim Real Estate Consultancy offer to you based on our experience - more than 10 years - with the movement of the real estate market in Turkey and the best real estate suitable for investment.
Real estate investment styles:
By this expression, we mean the expected period to achieve a return on investment, and accordingly we can define it in three styles:
1- Long-term investment: in which the investor does not aim to achieve immediate profit, but rather looks to achieve a double profit after a relatively long period of time, while maintaining the value of the capital, and therefore this type of investment involves a desire for current savings and future profit.
2- Short-term investment: It is the opposite of the previous style, the investor is intended to achieve immediate profit through resale operations, without freezing the capital for long periods, and this type of investment requires experience in the real estate market and continuous monitoring of market movement.
3- Periodic profit investment: This style includes features from the two previous types, as it involves the investor’s desire to save, such as long-term investment, but at the same time, making a profit in the short term, but this profit is in the form of a periodic return from the exploitation of the property, and this return is low. If we compare it to the quick profit that the investor achieves in the short-term investment.
Types of real estate investment in Turkey:
Considering the foregoing real estate investment styles, we can summarize the types of real estate investment in the Turkish market in the following forms:
1- Buying and reselling: It is the most common type of real estate investment, as it simply depends on the market movement and the increase in demand, which raises the price of real estate and thus achieve profit, and its forms include:
• Buying agricultural land, waiting for it to enter the regulatory area, allowing building on it, and then reselling it. This type of land is widely spread in Turkey, especially outside Istanbul and in the eastern states.
• Buying real estate that is still under construction where prices are low and installments are comfortable and sell it on delivery.
• Purchasing lands intended for construction and building on them, and this type requires a relatively large capital in addition to experience, and this may force the investor to form partnerships to execute the project.
• Buying ready-made properties (whether residential or commercial and reselling them).
• Buying, renovating, and reselling old real estate.
2- Purchasing real estate for the purpose of renting: This type achieves for the investor a periodic return (monthly or annually) while retaining the value of his capital as real estate, and this type also can be in several forms, including:
• Buying and renting shops: It achieves a higher investment return than residential real estate.
• Buying and renting residential real estate: This type can achieve a return either by renting the apartment on an annual basis, or the apartment can be furnished and rented on a daily or weekly basis as a furnished apartment with a higher return.
• Buying and renting ready-made hotel apartments, which are popular in Turkey due to the demand of tourists.
3- Acquisition of Turkish citizenship: The Turkish Nationality Law and its amendments stipulate that anyone who owns a property worth $250,000 or more can apply for Turkish citizenship with his wife and children under the age of 18. We have included this item among the types of real estate investment in Turkey because it is already considered a long-term investment. If the family of an investor consists of 5 people on average, the value of obtaining Turkish citizenship for an individual is only $50,000, frozen for 3 years, as the ownership of the property remains for the investor. He can dispose of it after 3 years. While many countries grant their citizenship at an amount higher than this amount and without the right to recover it by the investor later.
In this article, we discussed the most important real estate investment methods in Turkey in general, and we will talk in detail about the expected return on investment for each type of investment in a another article.