Investing in real estate in Turkey is one of the most profitable types of investment. The activity is not limited to professional traders. Still, the vast majority of society can achieve good revenues through real estate investment, and they are either dedicated to real estate work or use it. To achieve additional revenue to their original revenue. However, real estate transaction is one of the most complex activities that overlap between many variables and demographic data, including demographic, planning, financing, and legislative. But it is seen in Turkey in particular and in the world in general as one of the safest and most stable sectors.
This safety has come due to the strong demand on the real estate market in Turkey, especially in the main states, in which real estate prices are twice as high as the rest of the states. It is mainly driven by several factors, the most important of which is the large increase in the population and the economic boom in the region and the increase in the area of
At the individual level
But at the individual level, the success of investing in real estate depends only on the investor’s decision. If this decision is not accompanied by sufficient experience and the elements for the success of the decision are available, the investor may expose himself to potential losses, or he may be subject to a waiting period that may be prolonged until the prices recover their health. To help you start your first real estate investment in Turkey or expand your real estate business, we provide you with some advice. If you are a professional and experienced, what is mentioned in this article is a reminder for you only.
Real estate investment is divided into two parts: the first is long-term, aimed at owning land and real estate that is expected to recover in the coming long years, or owning real estate that generates income from its rents, and the second is short-term and aims to sell the property directly after owning it or after improvements have been made to it.
Accordingly, the feasibility of real estate includes two big secrets. The first is a famous saying: “The location… the location… .. the location” real estate does not always increase in value. The average rate of increase usually ranges from 5 percent annually, for example, but many sites did not increase it. Real estate prices for decades. The second: the state of the property to be purchased, including its specifications and location.
Four important rules
The two Alsran four important rules should be adhered to its beginners in real estate investing, and these rules are
1 – Buy property in the distinctive and vital area as the capital Istanbul: If you want to be a successful investor, you must be fully aware of what you do. And if you have spent several years in a specific area, know that you are distinguished from others in the knowledge of local real estate more than you think. If you have a good idea about the real estate of neighboring areas, it does not increase to the specified level of knowledge and familiarity, and this is a sufficient reason to move away from it and stick to your local area if you stay In a privileged area, it allows you to get information the real estate market with the right knowledge, and this is the key factor in reducing your risk and increasing the possibilities of making a profit.
2 – Invest your money in excellent or promising new real estate: The old saying that the three basic rules for investing in real estate are (location, location, location) is correct. If you can buy in promising projects, you are on a date with big profits. But there are two types of great projects, those that have proven to be useful and those are the ones that are about to occupy a great site. You can make profits in either case and here is the method :
– In neighboring areas, be sure to buy the cheapest real estate in this way. Any money that will be spent on repair will be back to you twice to three times the capital invested. When you buy a property wrong in a fantastic place, the advantage of the beautiful place support you and raise the selling price once it seems the drug in the form of an acceptable Of course, it is not easy to buy the lowest priced real estate in such a good place at a low price, as you will often find that the owner of the property is aware of what is happening. Still, in the case of real estate in an awful situation, you can have a good deal.
– In the promising neighboring areas, buy a group of real estate, either alone or in partnership with a group of buyers, that will work to upgrade the neighborhood, which will result in increasing prices in a way that sometimes exceeds your expectations.
3 – Buy new buildings and renew them whenever possible: There is nothing worse than managing a bad building. Tenants complain and hesitate to pay the rent and deal with you as if you were a fraud against them. Be very careful about real estate that is in a critical and expensive condition, do not buy Any property that suffers from fundamental problems such as a poor ceiling, bad drainage, or a corrupt electrical system, so the cost of fixing these problems will eat up any profits you can make.
4 – Cooperate with one of the specialized institutions in the field of real estate that is well informed about Turkish real estate in terms of location, price, and legal procedures
The five rules for starting a successful real estate investment :
The first rule: Start with what you know: This confirms to us the first secret that we mentioned at the beginning about investing in the vital area in the center of the capital Istanbul and the promising new areas, so focus on one of the two neighborhoods that You know it, real estate that is sold below its market value will not wait for a long time, though you have to take the required practical measures to discover deals and be ready to seize them at the right moment. The second rule.
Ensure that there is an active market: The biggest mistake that investors make is their failure to examine whether there is an active market or not. This error occurs most often when one breaks the first rule to start with what he knows. Once it starts from its local and neighboring regions, it is well aware of the demand and the quality of the market. But if he wanted to exceed the limits in his first stage, the chances of him falling in the level of determining the size and quality of the market are greater.
The third rule: Ensure the correct buying method: Once you know the real estate values
Here are many tips when buying, which some investors may overlook despite its very importance:
1 – Determine the area you want and the average price you want to buy to save your time and effort when searching your request.
2 – Do not pay any cash in the form of inspection expenses unless you make sure of the good reputation of the mediator you deal with. Some brokerage offices make money from the inspection expenses by making insincere advertisements about sales of apartments or any other property. The price is much lower than reasonable To tempt you to pay the inspection expenses immediately. In agreement with the owner of the unit, they bring the customers to inspect the apartment in exchange for a part of the collection expenses. After that, the customers are informed that the apartment owner has dismissed the sale or rent process and so on in every advertisement, so you must be careful and not believe the ads Whose real estate prices are below the reasonable limit.
3 – When you make any purchase, you must ensure all the legal procedures and stages of investment in Turkey
Buying and selling real estate under construction :
The establishment of any new real estate in any area means that there is new growth in it, which means that the demand and competition will be intense. Then you will be able to buy a housing unit while it is under construction, and then you can sell it with an increase of no less than 25 percent within two years at most. It is the completion stage of construction. And always remember that you can pay a small part of the money in exchange for obtaining the housing unit as a contract provider. The seller will not force you to pay the full value of the unit until after the completion of the implementation, which means that you are ready to purchase several units with the amount of one unit only.
Buying and selling real estate that needs renovation :
The skill in this aspect is that you can determine the occurrence of profit after its change. If you can search for a property in poor condition and you can add some improvements to it and then sell it at a difference from the price of the property and the cost of the improvements, then know that you will make good profits from that. The secret behind achieving these profits from this investment activity is to make the expenses of improvements significantly lower if the price of the property is less than 30 thousand dollars from its market value. The amount of spending that must be made on the process of improvements should not exceed ten thousand to 10 thousand dollars. Try to focus on the first impression, while the front door can generate first impressions of your home is worth it to some potential buyers. It is difficult to say that no one will buy a home because of the front door, but many buyers walk around the house to see what the house looks like. Is it good or not, and the front door makes a general impression.
There are three rules for buying and selling homes of this type :
1 – Buy low-value real estate: it is impossible to make a full-value property more valuable by repairing and renewing it. The idea is to search for a property whose value is less than it should be compared to other properties with the same features in the same area and then renovate, improve and spend on it until it becomes worth the value it is supposed to be.
2 – Set a budget for repair and renewal that gives you a sufficient amount of profits to reach your financial goal, so buying and selling real estate that needs repair and regeneration is interesting work. You can decide in advance how much profit you want from this activity to achieve for you and then distribute this amount by the number of deals That you can expect to achieve from this activity, for example, if your goal is to win 60 thousand dollars in the first year, you may decide that you need to earn 20 thousand dollars on three deals.
3 – Just as the expenses usually exceed your expectations, the prices frustrate you at times. To deal with this fact, you should have a rational approach to selling. You should be willing to reduce the cost you ask if the selling conditions dictate that to you. : (Do not cling to the property for more than three years) In the long term, you will earn more money by making more deals, and then the total profits from all these deals will be greater, even if each profit from them is small.
The fourth rule: Always make sure to inspect: Never buy a house or commercial property without checking it, and a good inspection is from a person known for his honesty and honesty. (Never contract without adding a clause that gives you the right to recover the deposit if the inspection results in something unexpected and unwanted) . Among these unexpected things are the amounts arising on the site from utility bills and legal violations.
Factors affecting the price of the property :
1 – Market factors: they are the factors subject to supply and demand and represent the price per square meter in the region at the time of demand (i.e., the immediate market price regardless of the future price possibilities)
2 – Planning factors : the planning factors for evaluating the price of the property represent the actual price of the property, taking into account the future factors affecting the price – and we find some banks request this study to evaluate the price of any property for the purpose of financing – and these planning studies include studying the real estate in terms of: the urban growth trend of the city Availability of infrastructure services, building system in the area, property location in relation to the general site plan and the number of facades, studying the market situation for the past five years for the plan and neighboring plans, studying similar properties on the same site to determine the current income and comparing it to the income of the property, studying similar properties on the same site to determine the occupancy rate and compare it with the rental property, construction areas and determine the level of finishing and the proportion of consumption and construction cost , after deducting the proportion of consumption as well as the general situation of the safety of the building in terms of construction .
Fifth rule: Always have a backup plan: The most important principle in reducing risk and increasing your chances of achieving profits on every real estate deal is to have a suitable backup plan. Even though you may not have any plans to rent the property you intend to sell, it is best to make sure. That you can rent it out at a profit (or at least break even) if you have to.
We all heard stories about an investor who buys a house, paints it, installs a new front door, grows a few roses in his garden, and sells it a month after buying it with an estimated profit of $ 20,000. At the same time, this type of success is common in the fast-moving market when real estate is bought for less than Its market value; however, it is not a general rule. Enter into any real estate transaction – whether you are planning to sell quickly or invest for a long time – with a good defense mechanism, and the best defense mechanism is to make sure that the rental income that the property can achieve will cover the monthly costs of capital, taxes, and insurance benefits if any.
Search for the rental values
Be careful in real estate investing?
Real estate investment can achieve quick and tremendous profits when you find a suitable property. Still, these deals are not always reliable, as inexperienced investors often lose their money, so you should consider the following three points and take them into account :
1 – Do not be fooled by the rapid growth of the market, the most common mistake that people make when they lose money in buying a property and then selling it is that they pay a high price when purchasing it in the hope that the price will rise when selling. Your rental yield, you are more likely to make a loss.
2 – Do not think about real estate investing. If you are facing financial hardships, you will likely become a desperate investor. Of course, you never want to invest while you are in despair.
Seven tips for buying investment properties :
1 – Do not buy real estate in remote areas.
2 – Buy only in promising regions.
3 – When purchasing a residential or commercial unit, make sure that the total rental income is at least 5% of the unit value.
4 – Determine how much money you will pay for each square meter.
5 – Buy real estate units from which you can get a return of one to two times the amounts you will spend on improving them.
7 – Spend money on improving your real estate unit. Have a potential tenant as often as possible before completing any purchase