When the topic is about the minimum level of real estate investment in Turkey, it means that we are addressing a novice and ambitious investor at the same time, and in order to provide accurate information, we will start with several definitions before we get to the main topic.
What is the definition of successful real estate investment?
It is an investment that achieves the required feasibility within the specified period of time, and the investor can finish it on time.
If the property is ready and the goal is to profit 25% within five years, then we have one of two scenarios to achieve this:
Rental return of 5% annually + the possibility of selling the property after five years at the same price at which it was purchased.
Or a rental return of 3% annually + the possibility of selling the property after five years at a price higher than 10% of the purchase price, and therefore the total rental return with capital inflation equals 25%.
What are the obstacles that a novice investor may face in the Turkish real estate market?
- To buy real estate because it is cheap in the hope that it will be a successful investment and therefore not be able to achieve the annual rental return commensurate with the price of the property and the investment plan.
- To buy a non-investment property and therefore will not achieve a high rental return, and the most dangerous of that when reselling it will not find a buyer easily and will often get a price lower than the price at which he bought it, especially since the foreign investor has a foreign currency and it is not hidden from anyone that the value of the Turkish lira has fallen against foreign currencies continuous.
To buy a property with the aim of investing in a non-investment area in Istanbul or another Turkish state, and this is often a big mistake with regard to investment because the demand is very little outside Istanbul and rental returns are linked to a specific period of the year (which are mostly summer tourism seasons).
To focus on the area of the property, the number of rooms and the price per square meter without paying attention to what really matters to the investor, such as the rental yield and the growth of real estate prices in the region in the coming years when the investor wants to end his investment and reap the profits.
If you have a strong knowledge of Istanbul regions, you can continue reading. If you are new to Istanbul and its regions, we recommend that you first read the following article:
What are the specifications of the investment property?
1- It should be in a strategic location so that supply is low and demand is high, and this is often achieved in some neighborhoods of central Istanbul, such as Sisli, Maslak and Beyoglu, but these neighborhoods, the initial prices of investment projects in them will not be less than 200 thousand dollars. Does this mean that the minimum investment Real estate in Istanbul is 200 thousand dollars?
Of course not, because some neighborhoods of Kait Hana and Ayoub include investment projects and can start an investment of no more than 80 thousand dollars, and also the strategic location may be located in an area of Istanbul for specific projects that have combined qualities that make them a successful investment, and we will talk about the rest of the property specifications From the investment, the idea will be clearer.
2- To be desired by the Turkish local market, because foreigners at best constitute 2% of the total Turkish real estate market, and therefore if you choose a property desired by foreigners, you target only 2% when you want to resell and reap profits, while if you choose a desirable property from Before the Turkish domestic market, you target at least 98% of the customer segment.
What does the local market want?
- The fewer units in the housing project, the more desirable it is, because Turks are social people who like to form relationships with a small number of neighbors.
- If the property is commercial, the first point is reflected, then the commercial store within a residential complex of 5,000 apartments is much more desirable than a commercial store within a residential complex of only 1,000 apartments.
- That the property is close to transportation because most Turks study and work in places that are relatively far from their place of residence, and therefore the ease of transportation, whether public or highways, is a very preferred thing for them when choosing a property.
3- The price per square meter is lower than the neighboring properties
This point constitutes great confusion for many new investors, and they understand that the property should be purchased at the cheapest price per square meter in the region, and this is not true. Rather, the intent is to buy the property with the cheapest price per square meter and choose it from among the real estate equal to it with advantages in terms of finishing, proximity to transportation and operational feasibility. Therefore, we will find that it is not an investment option to buy an old property in the Kait Hana area at a price of 1100 dollars per meter, while it is possible to buy a modern property very close to the first property At a meter price of $1600, the second is a successful investment and the first is not.
4- The presence of an opportunity for the growth of the real estate area parallel to the schedule of the investment plan
If your investment plan is short-term (less than 3 years), it is undoubtedly better to buy a property under construction to achieve a high return within this short investment period.
And if your plan is medium (3-7 years), it is better to find a property that will pass the future near a new metro line or open a large university or any event that guarantees its growth in the future, all of which will help make your real estate investment more feasible.
If your plan is long-term, more than 8 years, it is better to get a property with a high rental return, thus achieving the highest possible feasibility at the end of your investment plan.
5- It is the property that is bought at the right time and sold at the right time
As a continuation of the idea in the previous point, we say here that investing in a project under construction must be at the correct time, which is the early stages of construction. Some may say that there is a great risk in investing in a project under construction in its early stages, and this is certainly true if the project is not studied in an excellent manner. By an old and experienced real estate consultant, as well as the construction company, project specifications, prices per square meter upon entering into investment, and prices per square meter for later resale.
Therefore, there is no great benefit from most of the projects under construction when the delivery time approaches, because it is simply the ideal time to sell and not to buy. at the correct time.
What is the minimum amount required for real estate investment in Istanbul?
The real estate market in Istanbul is growing rapidly and changing rapidly as well, so if we say that the best opportunity is available today in the market at a price starting from 50 thousand dollars, perhaps soon there will be a better opportunity than it at a price starting from 60 thousand dollars and after several months there may be a distinguished investment project with prices It starts from 40 thousand dollars, so the best solution that we found is to provide a free consultation to the investor wishing to buy a property in Istanbul and to discuss through it the investment feasibility and the investor’s expectations and whether his budget is able to achieve what he wants or not, so we can direct him to collect more budget to be able to obtain an investment A real estate agent or advise him of the most appropriate opportunities within his budget if they are immediately appropriate.
To listen to advice from an old real estate broker who is familiar with most of Istanbul’s projects for free is really a real opportunity that does not harm at all, but on the contrary, it will enlighten you on the path of successful real estate investment.