At the start of 2022 and the massive and rapid spread of social media, almost everything is within reach on the one hand, and on the other hand, the large number of information sources has become a factor that hinders the user from accessing his request correctly.
For example, the number of real estate brokerage companies in Istanbul only that have a presence on the Internet through a website or any social media platform is more than a thousand. But if we add to this number individual people who promote real estate in Istanbul through their YouTube and Tik Tok channels in particular, we can talk For more than ten thousand sources.
If all these sources connect the investor to the same place, there will be no problem at all, but through our daily observations of customers’ requests and their sources that they share with us, we found that writing this article is a must to establish the constants and lay the foundations for the process of buying a property in order to preserve the interests of customers, as we found that More than 80% of real estate purchases in Istanbul are made in a way that does not actually meet the real client’s request, but rather meets the interests of the novice seller or not already specialized in the real estate field.
The customer today finds himself lost between dozens of different opinions when he wants to buy a property in Istanbul, especially if his goal is to obtain Turkish citizenship (buying real estate worth 250 thousand US dollars).
Some new consultants advice the client to buy 5 properties at the west of Istanbul worth together 250 thousand US dollars ,At the same time, the client is oblivious to how difficult it is to rent 5 properties at the same time and the amount of effort needed to make this process profitably successful, without calculating the investment return as a percentage.
Others want to appear more professional and advise the client to buy two apartments with a budget of citizenship in the middle of Istanbul, such as Basin Express Street and its environs, convincing him that the return here will be high because this is the modern business center in Istanbul and it will have a great importance in the future.
The strangest thing is the advice of some advisors to buy a property with the aim of investing in the Basaksehir area shown in the map below:
Knowing that the price per square meter for new projects is equal to the price per square meter in the real center of Istanbul near the Bosphorus in the Sisli, Maslak and Beyoğlu areas.
Although real estate prices have actually risen during the past years in the Basaksehir area, this is not due to its investment importance at all, but rather to the large demand for it and the temptation of some real estate advisors to clients, as it is the only Islamic region in all of Istanbul, and thus buying in it, even if the price is high, guarantees the future of your sons and daughters!
And why did we say that it is not due to its investment importance?
because investing is simply the process of buying and selling a property after a certain period and making a profit.
In the famous Basaksehir area, new properties are high in price due to the large demand for them, but resold properties are sometimes less than half the price of new properties with similar specifications, because There is a lot of supply in the market and little demand for used real estate, so if we assume that the buyer who acquired a property worth 200 thousand dollars 3 years ago and a property similar to his property today is sold for 300 thousand dollars, he did not make any profit except when he was able to sell his property, and when his property is offered for sale, he will find The amount offered is about $150,000.
Some real estate consultants want to be distinguished and thus convince customers by offering them to buy real estate in the Asian side of Istanbul in the Pendik or Kartal regions, so the customer will feel that he is distinguished from his acquaintances who bought in the European side of Istanbul. Is this really a good investment?
The areas far from the center of Istanbul, whether in the European or Asian side, have less demand than the central areas, whether in resale or renting. Therefore, this option depends on several factors, including the price of real estate, ease of access to the center and the area itself, and the volume of supply and demand in it.
Finally, the least part of real estate consultants offer the areas of Istanbul Center as an investment option for clients, and in fact, according to our practical experience in the field, it is considered one of the best areas for investment because the supply is always low and the demand is high, but of course we should not forget that the center of Istanbul is a very large geographical area and does not mean that buying Any property in it is the right investment choice.
Here are some statistics before we move on to talking about real experiences of buying real estate in Istanbul:
- Depending on the number of new projects all over Istanbul, and after making approximate calculations, we found that 85% of real estate is sold outside the areas of the center of Istanbul shown in the last picture above.
- 90% of clients who want to obtain Turkish citizenship have their main goal as investment, not housing.
Thus, the vast majority of real estate is sold on the basis that it is investment, which is often not.
- The possibility of renting in the central areas of Istanbul is faster, easier, and with a rental return as a higher percentage than real estate in western or central Istanbul.
- The possibility of reselling a property in the center of Istanbul is 2 times easier than selling it in the center of Istanbul is 3 times easier than selling it in West Istanbul.
- The number of properties purchased by foreigners does not represent more than 3% of the total properties sold in Istanbul, and therefore the real estate market in Istanbul is a local market par excellence.
Why do customers search for cheap real estate to buy in order to invest?
- The reason we started our article is the lack of knowledge of fake or novice advisors and thus convincing a client to buy a cheap property that is not suitable for investment is easier than convincing him to buy a property with a higher price even if it is actually suitable for investment.
- The client’s lack of knowledge and reliance on unqualified sources to gain his information (we noticed that some clients are willing to take their information about buying a property from a famous YouTuber who specializes in transmitting local news!!)
- The large number of sources and their confusion on the client makes him prefer to buy cheap real estate for fear of a fraud process that will lead him to buy a high-priced property with no investment value (unfortunately, fraud incidents still exist today and the main reason is the lack of knowledge of the customer)
- Some customers prefer watching a 30-second video on Tik Tok that discusses investing superficially rather than reading a truly comprehensive article for 10 minutes that discusses investing in a logical way that is proven by factual evidence.
Knowledge in general is the only solution for the client to obtain the most suitable property for him through a professional real estate advisor, and he will not be able to evaluate the experience of the real estate advisor without being familiar with the main points in the subject of investment, we guarantee you today when you read our blog specialized in real estate investment that you have no Only a general picture of the real estate market in Istanbul, but you will have an amount of information that exceeds more than 70% of the real estate consultants currently in the market.
Real experiences of buying a property in Turkey
We will take real examples of investors who bought real estate in the areas we talked about above 3 years ago, and we will assume that today they want to end this investment after obtaining Turkish citizenship, so what are the returns they obtained, whether from rent or from resale..
1- Buying 5 properties, each with a value of 50 thousand dollars, in West Istanbul:
The main problem here is not only the low rental return, but also the very difficult possibility of resale, and thus collecting a price even lower than the purchase price due to the decline of the Turkish lira against the dollar
If the rental return was 3%, at our best, after 3 years, 9% (assuming the apartments were rented continuously, and this is relatively difficult in these areas), and therefore investing in the amount of citizenship of 250 thousand dollars has a rental return of $ 22,500, but the value of these properties today is all of them It does not exceed $30,000 and therefore we have a loss of $100,000 for the five properties.
Amount to enter into investment: $250,000
Investment exit amount: $172,500
Net investment: a loss of about $ 78 thousand.
2- Buying two properties in the center of Istanbul, Basin Express and its environs:
We cannot deny that the rental return in this area is better than the previous one and may reach 5%, and therefore after 3 years we have a 15% return.
For two properties, each of 125,000 dollars, we have a return on 250 thousand dollars over 3 years: 37,500 dollars
When reselling we have more than 40 new projects in and around the Basin Express area, so the process will be difficult, and because of the depreciation of the lira against the dollar and the closure of Ataturk Airport, we will find that the value of each property decreased from 125,000 dollars to about 90 thousand dollars.
Amount to enter into investment: $250,000
Investment exit amount: $217,500
Net investment: a loss of about 33 thousand dollars.
3- Buying a property in Basaksehir:
The rental return in this particular area did not exceed 4%, and therefore this property will achieve a return of 12% after 3 years, which is equal to 250 thousand dollars 30 thousand dollars.
The biggest problem when reselling the $250,000 property will only be $140,000.
Amount to enter into investment: $250,000
Investment exit amount: $170,000
Net investment: a loss of about 80 thousand dollars.
It is clear that this area is not an investment at all, and a property can be purchased in it for the purpose of housing only.
Purchasing a property that is under construction may contribute to reducing this loss, since purchasing a property in its early stages in specific areas may result in a significant increase in its price upon delivery of the project.
4- Buying 2 or 3 real estate in East Asian Istanbul:
It is known that Asian Istanbul is a non-incubating environment for foreigners and therefore your investment in it means your orientation to the local population and the rental returns in it depend mainly on the tenant you will deal with and the extent of his desire to live in your property.
But the same previous problem is that resale is difficult in areas where there are many options for sale.
Therefore, investment in these areas would be more feasible if it was long-term.
5- Buying a property in the center of Istanbul:
Buying a property in the center of the only city that spans the two continents of Asia and Europe must be a unique investment, especially if the property is chosen correctly.
The areas of the center of Istanbul adjacent to the Bosphorus, such as Sisli, Beyoglu, Maslak from the European side, and the areas of Uskudar and Kadikoy from the Asian side of Istanbul. Getting a property in it in an upscale neighborhood within a modern building that cannot lose its value over time no matter how low the value of the Turkish lira against the dollar is, because this The type of real estate is priced in the market according to the dollar and not according to the Turkish lira.
Hence, we obtained the golden key in investment, which is the possibility of reselling the property easily when you want to terminate the investment with capital gains.
Thus, even if we get a property worth 290 thousand dollars, even if it is of a small area (as most of the properties in the center of Istanbul are not worth 250 thousand dollars exclusively, because they are investment properties in themselves and are not priced to be suitable for the amount of Turkish citizenship only!) the rental return will be 6% on The lowest up to 7.5%, and therefore if we get an average return of 20% within 3 years, and upon resale, we will get a profit of at least 10% within 3 years, and thus the investment equation in the central areas becomes if the property is chosen correctly:
Investment entry amount: $290,000
Investment exit amount: $377,000
Net investment: a profit of about 87 thousand dollars.
We also have investment options with returns higher than 50% within 3 years. You can contact us to present them to you because offers and opportunities are constantly changing that we cannot write consistently in this blog.