Investing in residential and commercial real estate in Turkey
Investing in residential and commercial real estate in Turkey
The real estate market in Turkey is characterized by the abundance of options and high competitiveness, especially in light of the facilitating laws that guarantee the rights of foreigners. Those wishing to own property in Turkey, These laws were used specifically to launch the real estate market to keep it vibrant and developing, as with the Turkish government allowing foreign investors to own property, and the cancellation of the condition of reciprocity. In addition to allowing citizens of about 182 foreign countries to own property, Turkey topped the list of the best destinations for real estate investment.
The idea of investing in residential and commercial real estate in Turkey represents one of the best current ways to achieve a profitable return. But venturing into it is a decision that must be well thought out before making. It requires a lot of research before getting through it and if done correctly, it will be the start of a profitable journey for you. Furthermore, it is considered an insurance against financial and economic fluctuations.
Studying the real estate market before making the decision of investment
Before you invest in any type of property, you should look for the highest profit. Making a profit depends on several factors, including the amount invested and capital growth, which is the amount that increases or decreases the value of the property over time, which means that you should consider the area in which you are investing as well as the property itself. And always the best type of investment depends on what you are looking for, the decision will also be affected by the amount of money you have available for investment, no matter what type of property you will choose to invest in, always remember to study the market well, and you should conduct a comprehensive analysis of the area and the property to identify the growth potential in the area rather than other areas.
Investing in commercial property
Commercial properties of all kinds are safe portfolio for the investor, and one of the best types of profitable real estate investment. There are many types of commercial properties (hotel apartments, shops, commercial offices and exhibitions or galleries inside malls).
It is generally expected that investing in a commercial zone will result in a high return on investment, moreover, it will be rented to businesses rather than individuals, and this means that the whole process will be smoother because companies tend to care about their image, it is financial profits and therefore companies will pay attention to the property and running it properly.
Therefore, if you find an opportunity to invest in a commercial property in a thriving area, consider taking the right real estate opportunity before it is too late.
However, all aspects of investing in commercial property must be taken into consideration, the most important of which are the following:
- The property owner is not obligated to undertake any of the transactions related to the property or with its expenses, as all transactions related to the property are managed by the company that owns the property in the correct manner, which will certainly return to the benefit for this property.
- The investment return in it equals two times or more, compared to the investment return on the residential property, which ranges from 6% to 15%.
- The commercial property is distinguished from residential property in terms of home remodeling, as it is more demanded by investors.
- Cash flow is good for a long period of time, as the lease contract extends for longer periods than residential properties, and can reach 5 years and more with an opportunity to extend it.
- Taxes in it may reach 18%, which is double the tax rates in residential properties.
- Long-term returns on commercial properties investment.
- The acceleration in terms of real estate growth and the increasing demand for it, especially as Turkey has a commercial nature, which increases its investment potential.
Investing in a residential property
Residential property is usually a safe path to take, as it is a frank and simple investment. However, all aspects of investing in residential properties must be taken into consideration, the most important of which are the following:
- It is characterized that the property is owned by the investor and suitable for living and investment.
- The purchase taxes are lower compared to the prices of commercial property.
- The investment return in it reaches from 2% to 8% annually.
- It is easy to find a renter in this type of investment. Because people are always looking for a place to live.
- Investing in residential properties does not cost as much as commercial properties.
- Regardless of economic conditions, rental fees may be reduced but the place will always be rented.
- In the case of renting the property, you will have to deal with the renters and their problems yourself, because hiring a property manager can cost you more than the rental fees.
- Some renters will cause damage to the property, this requires you to repair and maintain those damages before you rent them to someone else. This will cost you a lot of money.
Prices of residential and commercial properties & affecting factors
Economic Condition
Low economic conditions undoubtedly affect the real estate market and properties prices. It causes a state of stagnation and lower prices. But in the case of the recovery of the economic condition of the country and the stability of per capita income, in this case, prices will increase. Where there is stability in the financial condition of individuals, which makes them able to buy or rent properties.
Condition of the property
The better the condition of the property, the greater the effect on the increase in the price of the property. For example, if you compare a property that is in good condition to another property with similar features. The latter may have been distinguished by a larger area, but its condition was bad. Of course, you will find preference for the first property in the best condition.
Supply and demand
The higher the demand and the lower the property supply, The higher the properties prices, and vice versa, of course. The lower the demand and the higher the supply, the lower the properties prices. The ratio of demand and supply is also affected by many economic and political factors.
The region where the property is located
The prices of properties in the regions of the city center differ from their prices in the regions outside the city.
Availability of services
Availability of services such as schools, universities, malls, entertainment means and other services in a region, affects properties prices significantly and increases demand for them, which naturally affects the increase in the prices of properties in that region.
