Table of Contents

In the first part, we talked about guaranteeing rights when buying a property under construction. We also discussed the most important construction companies in Turkey and the stages of establishing each project. To read the article in detail, you can review the following link: Construction companies in Turkey and investment in projects under construction Part One

In the second part today, we will answer the questions that we started in the first part, which are:

4- What are the profits that can be achieved when investing in a project under construction in real numbers?

5- When is investing in a project under construction not suitable for me?

And before we start with that, let us agree that any number that will be discussed here in this article is a real number and at the same time does not mean that it is guaranteed for future investments. the future .

4- What are the profits that can be achieved when investing in a project under construction in real numbers?

Real estate investment in under-construction projects needs a conscious and courageous investor because the profits in it are higher than the accounts of novice investors. We saw real estate investments that gained 300% in five years, and we saw investments that were profitable, but because they were not completed at the right time, they eventually lost.

What are the most important factors that make real estate investment in under construction projects more feasible?

The strategic location based on studies of the region’s past and future, taking into account the development and its speed, for example, when the properties of the Istanbul Valley track were sold, and real estate prices in Sisli for modern buildings were relatively high, the Kait Hana area was the alternative investment destination, especially since it has the first metro that connects For the new Istanbul airport, and therefore even the traveler in Taksim Square needs to pass from Kait Hana to reach the new airport by metro, and from here our first eye focused on this area as an alternative to the central areas of Istanbul at competitive prices, but at the same time the second eye is where we monitor the number of new projects Under construction in Kait Hana, at first the number was 3 projects, but as soon as the new metro project was announced, we noticed the launch of at least 5 new projects, and thus the law of supply and demand was disrupted, and these properties will become suitable for long-term investment (because it will not be easy to resell them in the short term) Therefore, we decided to study the client’s demand and its conformity with the Kait Hana area (and if it weren’t for the large number of new projects in it, it would have been an investment area par excellence in a any project under construction).

The law of supply and demand, which states that every increase in supply leads to a decrease in demand and therefore a lack of desire to rent ready-made apartments or buy used apartments. The most important thing in the law of supply and demand is to study the region’s past and extrapolate its future, otherwise what will be the benefit if the balance of supply and demand is suitable for investment when it begins And not appropriate when you want to terminate it?! .

How easy it is to resell the property when you want to end the investment and the extent of the desire of the local and foreign market to obtain a property within these specifications at the appropriate price for you as an investor.

The fact that the property is close to the center of Istanbul does not mean that the profit rate in it will be higher, but it necessarily means that its price is higher than the remote areas from the center, and what we want to say here is that investing in the center needs a higher budget, but it is safer because the properties of the center maintain their prices no matter what happens Confusion in the exchange rate of the lira against the dollar.

Real estate licenses are never a criterion for evaluating the feasibility of investing, whether in ready-made or under-construction projects

Profit in Rotana project in Sisli Bomonti

A client purchased a one-room property with an area of 69 square meters in this project located in the Sisli Bomonti area in the fifth month of 2019 at a price of 153 thousand US dollars and only two years later, i.e. in the fifth month of 2021, the price of an apartment with the same specifications was 320 thousand dollars and therefore in this example We have a profit of 157 thousand dollars in two years, and to calculate the investment return for the two years as a percentage, we find:

ROI = (320-153)/153 x 100 = 109% 

For one year, half of it means: 54.5%.

This is considered one of the highest investment returns that can be achieved in the Turkish real estate market.

If we ask what is the secret of this high number in this project, we can note the following points:

  • The project was the only one under construction in Sisli Bomonti and therefore the demand is very high
  • The project has views of the Bosphorus and views of the historical city. It is desirable for rent and for resale later
  • The project is managed by Rotana and the same costs as managing any other local company, and this is a big attraction
  • Opposite the largest Hilton hotel in Europe and thus as if you are getting an apartment in a five-star hotel
  • The purchase was made in the early stages of the project, and therefore when the delivery approached, we got this high percentage
  • The real estate developer of the project is reputable
  • The real estate marketing company has a good reputation, and this is the reason for the sale of apartments quickly, and thus the demand for them increased more, which led to an increase in their prices
  • The interior finishes are excellent and are eye catching and encourage purchases now and in the future.

After these details, is there anyone who believes that they can find the most suitable investment property on their own and without consulting a professional broker..

Profit in the Topaz Topkapi project

Although this picture seems crowded, it perfectly expresses this project, which is located in a very central area of Zeytinburnu at the E5 highway, in the middle of 3 important universities, and guarantees the residents easy access to historical areas such as Sultan Ahmed, Aya Sofia, the Gulf and the Golden Horn.

A client purchased two rooms and a hall in this project in the second month of the year 2020, for the amount of one million and 200 thousand Turkish liras, which is equivalent to 200 thousand US dollars according to the exchange rate at that time and today, in the eighth month of 2021, that is, after a year and a half, the price of the apartment became the same specifications 2 million 625 thousand Turkish liras, which is equivalent, according to today’s exchange rate, 314 thousand US dollars, which means that this investor made a profit of 114 thousand dollars in just a year and a half. Let’s calculate the investment return as a percentage:

ROI = (314-200)/200 x 100 = 57% 

This is for a year and a half, but for one year, we will find that the return is 39%. It is worth noting that the project is still under construction, and therefore there is still an opportunity to achieve more profits.

This return is considered high in the Turkish real estate market, and one of the important points was to achieve this successful investment:

  • The only project under construction in the central Topkapi district
  • Close to 3 major universities and a main E5 road that includes all kinds of transportation
  • The project includes an apartment-office style, so the rental yield will be high and resale will be feasible in the future
  • The number of units in the project is few, and this in turn increases the investment value sometimes
  • A reputable construction company that is a holding company originally and will complete the project even before the scheduled delivery date
  • The real estate marketing company has a good reputation, and this is the reason for the sale of apartments quickly, and thus the demand for them increased more, which led to an increase in their prices

Remember that you can always get a free consultation to find the best investment property in the market and also remember that we are a real estate consulting company that we do not market for any project or any region. Our goal is one and that is to find the best property for each client according to his request.

5- When is investing in a project under construction not suitable for me?

  • Investing in projects under construction requires patience, as sometimes some investors are forced to extend their investment plans because of an unexpected thing that happened in the market, and from it the expected profits will not have a specific date to be achieved sometimes, and this is not suitable for investors with limited budget and do not own any other property.

  • There are no direct monthly returns from investing in projects under construction, but at least we need a year to conduct the resale process and achieve profits, and from it it is not suitable for investors who want to obtain a direct financial flow (even if the rental return is much less than the profits of investment in projects under construction )

  • When you invest in a project with a high and guaranteed rental return and your investment plan is long-term like investing in The Ritz-Carlton in Nisantasi

  • When you consult your friends or relatives who are not experienced in the Turkish real estate market and based on their experiences, you decide to buy a property somewhere. This is very dangerous and can lead to disastrous results. See the first part of this article to learn more about it