The real estate market in Turkey is characterized by active growth and a comfortable investment climate. Local property offers attract investors from around the world. Our experts have prepared an article on the investment benefits of Turkish real estate, how to invest in local housing and the reasons why local properties are so popular among foreign investors.
Table of contents:
- Is it profitable to invest in real estate in Turkey
- Why invest in real estate in Turkey
- 1. Steady economic development
- 2. Comfortable investment climate
- 3. Good location
- 4. Development of international tourism
- 5. Urban growth and modern infrastructure
- 6. Large selection of offers for profitable investments
- 7. Profitable investment and property management schemes
- 8. Special investment offers
- 9. Low cost of property objects
- 10. High rent yield
- 11. Property maintenance services
- 12. Friendly taxation system
- 13. Ample rental opportunities
- 14. Broad resale options
- 15. Positive expert forecasts
Is it profitable to invest in real estate in Turkey
The real estate market plays an important role in the development of the Turkish economy. The government is also interested in the development of this market. Over the past 10 years, the real estate and construction market has provided approximately 8.4% of GDP. Almost half of the total investors are foreign citizens.
Foreigners have been actively buying Turkish housing for many years. Over the past three years, the volume of transactions made by foreign nationals has grown by almost 25,000.
One of the reasons for such high interest is the fact that investing in local housing is as easy as profitable. The key advantages of investing in Turkish properties are:
- No VAT when buying real estate;
- Sales tax is only 4%;
- Long-term residence permit;
- Simplified procedure of getting citizeship when buying a property that costs at least $250,000.
Of course, there are plenty of other reasons, like a wonderful climate, active social and economic development, a high standard of living, affordable cost of living, relatively low housing prices. Considering all the above-mentioned factors, we can say for sure that it is definitely worth investing in Turkish property.
Why invest in real estate in Turkey
Earning income and preserving capital is the main goal of any investment. And investing in Turkish real estate is no exception. This country offers a great choice of investment options and ensures foreign investors a friendly property investment policy as well as legal clarity of all deals. The Law on Foreign Direct Investment ensures a favourable investment climate.
The effectiveness of all measures taken to develop investment potential can be confirmed by statistics.
Over the past 15 years (the period from 2003 to 2018), the country's economy received 12 times more funds from foreign investors than over the previous 30 years (the period from 1973 to 2002). This data clearly shows that the measures taken by the Turkish authorities really work. Here we offer you 15 reasons for investing in real estate in Turkey.
1. Steady economic development of the country
According to experts, Turkey is about to enter the top ten countries with a developing economy with an indicator of $1 trillion. Bloomberg experts have recommended this country as an investment destination, because its economy is growing rapidly - a 3-fold increase in GDP over the past 14 years. This is the first place in the growth rate among the G20 countries.
This indicates a fairly stable economic situation, which is under control even in times of crisis. A stable economy and competent government policy in this area are key factors for successful investment.
2. Comfortable investment climate
Turkey is famous for its liberal foreign capital regulation regime. To actively attract investors from other countries, the government have taken special measures. The country has also the principle of equality with national capital.
3. Good location
This country is the place where the West meets the East. Foreigners from different countries come here. Turkey attracts both western and eastern investors. The country is actively developing relations with other countries, ensuring a friendly policy towards foreigners.
4. Development of international tourism
Local resorts are very popular among holiday-makers from all over the world. The Turkish authorities actively support the tourism sector, so the number of tourists in this country has been increasing for many years. The British, Europeans, holiday-makers from Russia, Ukraine, Belarus and other countries go to Turkey's resorts.
Tourists create a high demand for rental properties. And this is a source of income for investors.
5. Urban growth and modern infrastructure
The development of the real estate market depends on the development of the construction sector. Turkish cities are actively developing, roads and bridges are being reconstructed. Today, developers offer top-notch development projects located in areas with great infrastructure. Buying a property in such locations definitely gives more rental prospectives. In Turkey, you will find plenty of options with a good location and at a reasonable price.
6. Large selection of offers for profitable investments
The Turkish market offers a wide selection of investment options in any category:
- Projects under construction;
- Finished projects;
- New homes and existing ones;
- For rent and resale, and etc.
Here you can buy almost everything, from a cozy studio to a first-class penthouse. Each buyer will find a perfect option meeting all their requirements and budget. The top destinations for foreign buyers are large cities and resorts - Istanbul, Antalya, Bursa, Ankara, Yalova.
7. Profitable investment and property management schemes
In Turkey you can choose investments of different types:
- Long-term rental solutions. If you buy a property in a finished project, then you can start looking or long-term tenants straight away.
- Short-term rental solutions. This option is perfect for foreign property buyers, as a property management company will take care of all rental business. You can also enjoy a beach holiday in your own overseas apartment and when you go back to your country, you can earn money by renting it out.
- Resale solutions. There are investors who consider resale options, buying a property at the very first stage of construction. Developers offer the lowest prices at the start of construction. As construction continues, apartment prices in Turkey get higher. When a project is finished, the prices can be 30% higher. This difference in price allows investors to get a considerable profit.
The investment profit depends not only on the chosen investment scheme, but also on how wisely you choose a property to invest in and its location.
8. Special investment offers
The Turkish property market offers options for buyers of all levels. Whether you are a complete beginner or an experienced investor, you will find an ideal option. Turkey's properties can be a great solution if you are looking for a holiday home or a property to invest in. There are plenty of special offers for this goal.
For example, apartments in built-for-rent developments. Buying such an apartment, an owner receives passive income, whereas a management company takes care of the rent. This scheme is a great solution for private investors. It is as simple as safe.
If your goal is to receive income as soon as possible, Turkish developers offer an extensive selection of finished projects. If you want to get the maximum profit, consider properties under construction, which you can buy at the lowest prices.
9. Low cost of property objects
A buyer with any budget can become an investor in Turkey. Here you can find options priced from € 30,000. The cost of liquid assets that can bring guaranteed income starts from an average of € 50,000.
10. High rent yield
The return on investment depends on the correct choice of the object. Depending on the location, housing characteristics and the property management system, you can get a yield of 3% to 15%. If you work with a property management company, you can receive a higher rent income. When buying a property for resale, the income may reach 200%.
| Type of investment | Yield |
|---|---|
| Long-term rental | From 6% - 7.2% to 12% |
| Short-term rental | From 4% - 5% to 20% |
| Resale | From 20% - 30% to 100% and more. |
11. Property maintenance services
Management companies help foreign investors maintain their properties while they are away. These services include cleaning, repairs, arranging leasing, meetings with tenants, etc.
This list of services can be expanded by agreement with the owner. The cost of maintenance services is an average of €500 per year and approximately 20% of the rent.
Property Maintenance Costs
| Types of costs | Rate |
|---|---|
| Tax | 0.6% - 0.1% per year of the cadastral value |
| Municipal fees (garbage collection and street cleaning) | €10 - 40 per year |
| Utilities (aydat and utility bills) | About €1,500 per year for a 1+1 apartment |
| DASK (insurance) | €15 - 150 per year |
12. Friendly taxation system
When you purchase a property, you need to pay taxes:
- Tax on purchase and sale - 4% of the property value;
- Property tax - 0.6 - 0.1% of the cadastral value. On average, the tax is no more than $75 for an apartment per year, and no more than $100 for a spacious house.
- Income tax - from 15 to 35% of income.
Tax rates may vary from region to region, but in general, the tax policy in Turkey is quite friendly. And this is another reason why investing in housing in Turkey is profitable.
13. Ample rental opportunities
A high tourist flow ensures great rental conditions. There is always a demand for holiday rentals. Not only will your rent income cover property maintenance costs, but also ensure you a profit.
The most profitable rental options are fully furnished apartments located in close proximity to the beach, overlooking the mountains or the sea. Such apartments are very popular among holiday-makers during the high season and in winter they attract people who prefer to spend winter in warmer countries.
14. Broad resale options
If you prefer to earn on resale, then Turkey will offer a lot of opportunities to do so. Property prices are steadily growing in Turkey and you can gain profit even when reselling secondary housing. People who bought apartments located in popular resorts about 5 years ago now sell them at the price 45-50% higher.
But most often, investors who prefer resale options choose property deals at the construction stage. In this case, the profit can reach 200%.
Experts say that prices will continue to rise, which means that positive trend will continue in the rental sector as well as in the resale sector. Buying an apartment in Turkey today, you can get an income of 20 - 25% of its resale just in a few years.
15. Positive expert forecasts
When investing in property, you should consider not only the current market situation but also expert forecasts. When it comes to Turkey, experts predict a further steady increase in prices in all categories, and the country's government is going to continue encouraging foreign buyers to invest in local property. The country plans to become one of the most visited destinations in the world by 2023, which brings only positive investment prospects.
What real estate in Turkey is better to invest in
According to experts, Turkey is considered one of the most investment attractive countries. The most important investment factors include:
- Property location;
- Property characteristics.
As for location, experts advise considering Istanbul, Izmir, Antalya, Kemer, Belek.
A standard rental option is considered a fully equipped 1+1 apartment, located close to the beach, in a district with developed infrastructure.
Purchasing such property, you make a great bargain that will bring you higher profit.
What real estate is profitable to invest in 2019
Choosing the right property is the key to the investment success. If you want to choose the best option in Turkey, check out properties on our website. Here are our tips how to choose a property:
- Choose a reliable verified partner. We offer property options from leading Turkish real estate agencies and companies, as well as from verified individual sellers and developers.
- Choose an investment property in large cities or in popular resort areas. Your property will always be in demand.
- Decide on your goals and choose options that perfectly match your goals. If you want to rent out an apartment and receive income immediately, consider properties for a short-term lease. If your goal is resale, choose projects under construction.
The choice of an object is the key point in investment. With our website, you can be sure you choose the right option. Check out our real-time property deals that will suit your investment goals today!