Property Guide Turkey

How to Make Real Estate Investments in Turkey ?

If you want to make the right investment in Turkey and keep your money in your pocket by multiplying it, it is quite important to make the right real estate investment. The first reason for making an investment is to preserve your assets and evaluate it to obtain profit. It may also be to make purchases in order to finance other investments when required or meet your unexpected needs. Briefly, investment aims to both obtain profit and preserve its vale and liquidate it when necessary. Real estate – property, Stock Exchange and Gold are the first items to come to mind in Turkey make an investment.

Out of these three options, which one is the right decision depends on the income, outcome, age, knowledge and expectations of the person. Since a person’s right investment cannot be the right investment for another person, a personal investment plan must be drawn up.
How to make real estate investment? What are the money saving real estate investment methods?

You can earn money by investing in real estate. In real estate investments, there are residence, land, field and commercial area investments and it is the most preferred investment method by the foreigners since it is the profit guaranteed investment which brings profit when investment is made correctly and which has the lowest risk.

Points to Consider in Residence Investment

First you need to decide whether you will buy the house for residing or investment purposes. Financing and how to buy the house and purchase price are important. If you are to buy a property for investment, buying a house from the foundation will be more profitable than buying a completed house. Our biggest advice to the investors who are going to buy a property for investment is to pay half of the requested price to a reliable construction company when the foundation is laid and sign a contract saying that you will pay the remaining amount when the title deed is delivered.

When the title deed is delivered, sell the house in its value and pay the remaining amount to the company and have your profit. If you make an investment between USD 500.000 and USD 1.000.000, you can sell it for USD 1.300.000 and pay your outstanding debt. Thus you would have 60% profit and gained two times revenue compared to an ordinary investment.

In a completed house, rent / price ratio is a quite important criteria and the house must pay off itself in maximum 160 – 180 months. To calculate this, you can divide the purchase price by the rental price. If you will use bank loan, I recommend that term should not exceed 5 years. Monthly payment should be 30% of your income and then it would not put you in a tight spot economically. Although there are numerous factors which affect the price of a house; the environment, location, condition, social facilities, floor, heating, elevator and being close to public buildings and work places are the most important factors. If you sell the property that you have purchased for investment within 5 years, you have to pay revenue tax.

LAND OR FIELD, WHICH ONE BRINGS MORE PROFIT?

Timing is important in investments. Short term investment means 3-5 years, moderate term investment means 5-10 years and long term investment means 10 or more years. Depending on the duration of your investment, buying land is more reasonable for short term investments while buying agricultural fields is reasonable for long term investments. Given that 3m2 field can be purchased for the price of 1 m2 land and annual increase is in 15% in lands while it is 10% in fields; there is two times more increase in the value. In addition, if fields are zoned for construction in case of long term purchases, you can be millionaire if you sell the parcels in the price of land.

Companies and individuals who want to build residence in the short term should buy lands in city centres. Zoning status, shape and location of the land are the criteria which affect the increase in the value of the land and selling it easily. Therefore, note that the land has a square or rectangular shape which will allow that a building can be constructed easily. In addition, obtain the zoning status and plan of the land from the municipality and check the mortgage status at the land registration office. Bargain on the net surface area. Instead of buying an expensive house, buying a land in the price of a house and give it to a contractor in return for flats will provide you two times more revenue within a short time of 2 years. If it has a commercial area, it is a golden opportunity.

HOW TO MAKE COMMERCIAL REAL ESTATE INVESTMENT

Commercial real estate investment is made for commercial activities and it is more profitable than house investment since rental revenues are high and guaranteed. If you make an investment to run a business, it will pay off itself within 3 years, while it takes 7 or 10 years to pay itself off when you rent it. The tenant who rented the property to run a business does the maintenance of the property and it is almost impossible not to take the rental fee because the first thing to do is paying the rent. We strongly recommend to sign a rental contract at the notary public for residential or commercial purposes. While occupancy rate is 70% in houses, it is around 95% in commercial areas, of course I am not talking about a place in an alley. When buying a work place, you should prefer offices located on a street or a location which is frequently used by people.

HOW TO EARN MONEY FROM REAL ESTATE INVESTMENT

There is no investment better than real estate in Turkey which allows you to earn money easily and helps you sleep well at nights.

  1. Buy, wait and sell. Investors who want to use this method should ask a real estate consultant who has investor knowledge in the market to let them know when there is a place with a bargain price. They can analyse the place, its annual increase in value and if there is other revenues and purchase the property for a fair price, then wait and sell; as simple as that. The point to consider here that the property to be purchased complies with the points to be considered when buying a land.
  2. The second method is exchange; you can exchange a property that you have purchased for a cheaper price with a more expensive one. Thus you can have a better property for a lower price. If you indicate that it is an exchange at the land registration office, you would not pay tax either.
  3. You can buy a house with loan, pay the instalments for a few years and find someone who is willing to pay higher than its costs. Let’s say you have purchased a house for TRY 150.000 and found someone to pay TRY 15.000 extra other than the payments you have made. You can execute the sales after going to the bank and transferring your loan to the buyer and getting your profit.
  4. Buy a house in the foundation stage from a reliable construction company, make some of the payment in cash and pay the remaining amount in instalments. Then pay the whole amount when you get the title deed and sell the property for a higher price. Thus you can get 20% profit because of the margin between buying and selling. If your payments are not complete, sell the house by way of the construction company and make your payments after selling the house. That’s it.
  5. Sell the house by increasing its value and use methods to increase the value of the property. You can do some renovations to increase the value of the house. Sometimes even the tiniest work adds value to the house. Add the cost of this renovation to the purchase price of the house and add your profit and then sell the house.
  6. Instead of buying high price residences in city centres, you can buy land in the developing areas and you can give it to a contractors in return for flats. After you recover the money invested in the land by means of this increase in value, you would have a flat free of charge. The most important thing to do here is to give it to a contractor at the right ratios.
  7. You can buy old, detached houses and have it included in urban transformation and find a company to renovate the house. Pay attention to the zoning status and land share when buying shares in old small buildings. Keep away from areas without zoning. If your land share is 50 m2, when you give 2 equal lands to a contractor in return for flats, you would have at least a 100 m2 flat.
  8. Buy a vacant land in the right place for a low price and make investments which will add value to the land. Farm, house, cattle breeding, poultry, culture plants, plantation, flowering, afforestation, roads, water and electricity installations on the land would add value. When you buy a field and increase its value instead of buying improved land, you can gain profit from the added value and annual increase as well as agricultural works. Sometimes you can find places where the field will pay itself off with the harvest of a year.
  9. You can generate electricity by installing solar power systems on arid lands and sell it to the government.

The points to consider here is not to get into troubles that you cannot overcome when doing renovations. For example, you need to get a permit from the municipality when making modifications at the house.

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