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If ten years ago, when the euro cost less than 40 rubles, Russian buyers of apartments in Turkey did not really care about profitability and liquidity, often purchasing housing on the coast just so that there was a place to spend a vacation for themselves and friends with relatives, today the situation has changed dramatically.
The euro rate has “skyrocketed” to 90 rubles; and those wishing to invest in Turkish residential real estate are now assessing how much it is, in principle, capable of regularly generating income. That is, if it is liquid and profitable because you want to buy a house that can be easily rented out for a while or quickly and with a profit to sell, if suddenly there is a need for a large amount of cash.
LOCATION SPECIFICATIONS
Location
If you focus on tourists, it makes sense to take a closer look at popular tourist destinations - resorts on the Antalya and Aegean coasts. The province of Antalya, especially Alanya was an undisputed leader for many years. But recently, the province of Muğla has become the leader, where in Bodrum alone, rent has risen by 24% over the year.
The resort of Çeşme (near Izmir) is also rapidly gaining popularity, but this is partly a “pandemic” trend: last year, villas and detached houses in resort villages with a maximum of greenery and a minimum of people have been in demand. And in order for real estate to be guaranteed liquid, it is still better to make sure that the demand specifically for this city, village (or other settlement) and area is stable for several years.
Roads
If you choose an apartment, then the place for a residential complex can be wonderful, the views from the windows are wonderful; but if it is inconvenient to get to the residential complex - that is, there is no necessary infrastructure in the form of public transport at least within walking distance - then it is difficult to call such housing “highly liquid”. Because it is suitable only for those who have their own vehicles, or are ready to constantly rent a car, or call a taxi; and gasoline in Turkey is expensive.
Thus, you can buy an apartment somewhere in the advertised “eco-village on the mountainside” for yourself “on the outskirts”, no matter how beautiful the surroundings are. But do not expect tourists to line up to rent, and you can hardly count on a quick sale of such properties.
It is still better to choose more “civilized” areas, where it is convenient to get there. The priority in this sense is developed resort cities like Antalya, which is rapidly updating the transport network of Alanya, Marmaris, Fethiye, etc.
Infrastructure and urban projects
When choosing a property, especially in a large city, be sure to specify what is nearby. And most importantly, what is planned in the future. If you hurry up and accidentally buy, focusing on the photo and description on the Internet, an excellent and at the same time cheap apartment, which is located next to the sewage treatment plant, then let alone rent it out - it will even be impossible to stay there longer than a few hours. The case is, alas, from real life.
Housing prices fall next to emissions-related industrial plants, in neighboring houses from railway tracks and rumbling highways, etc.
However, the neighborhood is different: for example, housing in Istanbul is now rapidly becoming more expensive, next to the metro lines under construction, as well as in the vicinity of the Istanbul Canal being built.
Housing prices have also skyrocketed in Mersin, where the first nuclear power plant in Turkey (Akkuyu) is being built: tourists are unlikely to be interested in this property, but the Turks themselves who come to work on projects and bring their families with them will willingly rent it, and for a long time: for years, not a season.
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DEMAND CHARACTERISTICS
It makes sense to consider what investment goals you are pursuing when buying an apartment or house:
- mainly live in Turkey yourself, periodically renting out at a time when you do not need housing;
- purposefully for renting;
- for future sale with a profit.
In the case of the first option, it makes sense to consider resorts, and travelers as a target audience.
In the second case, in addition to resorts and their tourist guests, you can consult a specialist and assess the attractiveness of your property for the local population, that is, Turkish citizens. Specialists moving to another region for work often look for apartments for rent for a long time. Thus, housing near large factories, business and exhibition centers will definitely be in demand. Naturally, we are talking about large cities, mainly megalopolises. Antalya, by the way, is also a fairly large city that “lives” all year round, and not only in the summer season at the expense of tourists.
You can also consider buying housing on university campuses, where students flock in the thousands. But, of course, here it is better to take a closer look at the options with one or two bedrooms: it is unlikely that students will willingly rent an entire house or a very large apartment.
In the third case, advice on point 2 is relevant, plus housing near significant objects. From historical (city center) to infrastructural - for example, an airport under construction; and a lot of airports are now being built in Turkey. Let us recall that the New Airport recently opened in Istanbul received 500 or more flights per day even at the peak of the pandemic.
Thus, regarding the rise in housing price in the area of the nuclear power plant, as well as other strategically important objects that can soon “add” the value of your chosen real estate, we recommend consulting specialists. There is no need to expect a significant increase in the number of factories and plants in Turkey in the very near future; however, for example, Istanbul is growing rapidly, transferring part of the industrial zones to the former sleeping areas - housing there will become more expensive as well as near the New Istanbul Airport as soon as the metro opens there. We have already written in the news about the new metro lines being laid, the Istanbul Canal, and large bridges under construction. Square meters of residential real estate will rise in price here; which means that liquidity will also increase. By the way, liquidity.
LIQUIDITY
“Liquidity” and “profitability” are directly related. That is, if there is a demand for your housing in terms of rent, then it will be easy to sell it. And vice versa: if, even with a low declared price, those who want to rent your apartment or house are not there for months (or even years), then you will be selling it for a long time. Or, alternatively, you will have to drop the price, having received less money than you paid for this housing yourself.
Therefore, it is imperative to pay attention to liquidity, even if you do not plan to rent out the property: suddenly you get tired of this place and want to move to another area or even to another city, or you urgently need cash - anything can happen in life.
In general, investments in Turkish real estate are now very profitable. Partly due to the rise in the exchange rate; this is especially beneficial when the property price is fixed in Turkish lira.
The real estate market “guarantees” to the Republic of Turkey slightly less than 10% of GDP, so this area is important. And the government pays a lot of attention to it. Construction technologies are developing, ever higher requirements are imposed on the quality of construction (especially seismic resistance). Banks regularly review rates on mortgages and consumer loans; a year ago, in the summer of 2020, due to the pandemic, the mortgage interest dropped to historic lows. And, they say, in the near future there is a chance that this “action from the government” will be repeated.
The quality of development organizations work does not raise questions: Turkish developers are at the rating top of the best contractors not only in Eurasia, but all over the world. Thus, the industry continues to grow and develop.
Projects are also developing; following the demand, developers are now creating more and more innovative residential complexes, equipping them with smart home systems.
As for villas and residences, it also makes sense to clarify before buying what exactly was “in trend” at least over the past year.
The past year has clearly confirmed that the priority for this period of time is spacious housing with at least spacious balconies and large terraces, and better - houses with their own gardens: the desire to live away from the crowd with maximum comfort will probably persist for several more years.
This is partly why the luxury villas in the province of Muğla, in particular on the “Turkish Riviera”, in Bodrum, are already on par with the European ones. Imagine how much their owners earned if they bought this property 15 years ago.
PAYBACK
When assessing liquidity, one cannot ignore the payback. More expensive real estate in prestigious areas pays off, of course, longer; small inexpensive apartments in high-demand areas - faster. Thus, when purchasing real estate, we recommend that you think about how soon you plan to sell it. The average payback period for housing in Turkey is from 18 to 30 years. The last year has corrected these figures: real estate is growing in price faster than even the most daring forecasts - but no one can predict the situation for 10 years ahead.
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HOW TO MAKE A CHOICE BETWEEN DIFFERENT HOUSING CATEGORIES
Apartments - or serviced apartments?
It is up to you to decide. You can buy housing; or you can purposefully buy the so-called “serviced apartments” in hotel-type complexes in order to rent them out regularly for most of the year, occasionally coming on vacation. It all depends on the plans. Renting out apartments and houses brings somewhere from 3% per year (sometimes 8-10%, depending on demand - for example, this year in Bodrum there is a truly explosive demand, and well-located luxury villas in the season -2021, with an advance calculation, have already brought their owners one million Turkish lira! This is with the average cost of housing in Turkey at the level of 0.4 million lira).
The difference, in general, is only that apartments with a service, as a rule, are initially offered with the option of “management”: the developer works in partnership with a management company (hotel or some other), which rents apartments that look most often as hotel rooms, for short-term rent, often with additional services (cleaning, breakfast, etc.). That is, the owner transfers the powers to the management company, and they themselves only receives income regularly minus the operator's commission. The profitability of such apartments in hotel complexes is approximately 8-10% per year.
This is convenient because you do not need to search for landlords yourself, place ads on sites, etc.: the management company or the hotel operator does everything, including cooperating with such popular sites as hotels.com, Expedia, etc.
The downside is that not every location has apartment complexes for rent. And no one guarantees that such a complex will be in the city where you would like to live, and even more so that it will be found in your chosen microdistrict. That is, you will need to choose an apartment from among the objects offered to you. There may not be too many of them in the province you need, or the price may turn out to be higher than you expected to pay: such apartments are usually not cheap. Especially when they work under a well-known hotel brand (which also takes a commission for using its name).
However, in order to consistently rent out your housing, it is not necessary to choose exactly “serviced apartments”: that is, the buyer is not limited in their choice. In any more or less large settlement there are agencies that are ready to take on this work - to select landlords and rent apartments for you. There are companies that offer to buy housing from them, and then they themselves manage it.
The only question is the decency of the agency and the thoroughness of their work. Let us recall that since April 2021, real estate agencies have been banned from operating in Turkey without a license under the threat of a fine, but still not all companies have acquired licenses. Therefore, you need to be vigilant so as not to stumble upon a dishonest performer or a “one-day” company.
Residential real estate of "elite" class
These include detached country houses of a large area and with their own territory: a park, a garden, in addition to the obligatory pool - one or more. Also, luxury residences, villas, or luxury penthouses on the upper floors of expensive residential complexes, as well as very large multi-level apartments (also in prestigious residential complexes: they are in demand among those who are cramped in ordinary apartments, and villas are not suitable for a number of reasons). An optional, but important factor here is the view characteristics: a panoramic view of the mountains, the sea, etc.
Such real estate is sometimes not very actively rented; but you can resell it if the location is successful (see the section above), with a large profit.
By location, such luxury real estate is in greatest demand in Istanbul and its vicinity, Izmir, as well as on the Mediterranean and Aegean coasts.
Budget housing in new buildings
These are new buildings, including both in already commissioned or practically completed houses, and, as they say, “at the stage of the foundation pit”. They are really cheaper, but you need to very carefully choose a contractor: “long-term construction” is not uncommon in Turkey.
After residential complex commissioning, the apartment rises in price almost immediately. You can make a profit on this about 20-30%, but the resale can later return to the investor, with a successful choice of an apartment, up to 200% of its price. After all, the price is also affected by location (including distance from the sea - in resort regions, or from the center - in large cities of the continental part of the country), area, infrastructure, territory arrangement, specific characteristics.
“Resale”
The cost of flats and apartments in the resorts of Turkey is growing by leaps and bounds. So those who do not risk investing in new buildings can be recommended to take a closer look at the secondary fund. Moreover, this applies to districts and cities where new construction has not been carried out for a long time - for example, Marmaris, which is in demand in terms of buying housing; but be careful not to buy a “ghost house”.
Resale of apartments in high-quality houses can bring about 30-50% of the profit. Just be sure to pay attention that the house was built no earlier than 2000 - that is, it is no more than 20 years old. After 2000, houses began to be built using better technologies, in particular, more protected from earthquakes. Thus, even the year of construction itself can protect the buyer from a lot of hassle in the future.
We would like to remind that you can also buy commercial real estate in Turkey - offices, shops, and land plots. With the right choice, they will come in handy in the case of building your own buildings (housing and not only - for example, you can temporarily provide land for the construction of hotels, guaranteeing yourself a stable profit), and when creating your own business in Turkey, and in terms of renting out.
In any case, before buying real estate, be sure to consult experts in the real estate market. And we would like to remind you that the purchase of apartments in the provinces of Muğla and Antalya, where it is convenient to live and relax, as well as to easily rent out apartments, is considered a practically win-win option.