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Real Estate for Self Live and Investment

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Fusions

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Good Morning folks,

I would like to know your opinion on the following questions/observations/statements.

I have a genuine interest in buying a property for self live and for investment purpose.

I appreciate to get a feedback from folks other than agents please.

For Investment

  • Based on my research and interaction in the past months, I strongly feel that the real estate market is artificially hyped by the Arab Investors and does not reflect the actual value of the property offered to foreigners.  
  • Many false promised offered that a property unit upon completion in 2 years will generate a 25% min appreciation and profit while the fact is that there are so many many projects in the new areas (which are essentially being the focus of boom) being developed, that why would any one wants to pay cash (with 25% premium) to buy from you, while he or she can simply go for another project in the same area. If he/she wants to buy a ready made, then there is better websites like https://www.sahibinden.com/en which by the reflect the true trans value of a property far less than these so called agents offer to foreigners.
  • I negotiated a property that was offered to me with starting at 600K TL down to 380k TL. This shows that there is a nasty game being played by these agents. 
  • The areas which can profit you are in/around the city center and the projects there are quite expensive and hence out of reach for many foreigners. Hence the new istanbul areas are being offered and are promised with roi which in my opinion is not true. Because transport is key factor in istanbul and being close to the metro is paramount importance.
  • Some of the projects are put on hold for construction and you never know the credibility of the unit will be delivered to you on time or not
  • I believe it is not a market for some one to expect making heaps of money from flipping em. I witness a good drop in holidays properties in antalya and other places like close to 50% drop.
  • To conclude, one has to carefully study the project, make sure the developer is known and has delivered in the past, make sure the neighbourhood has the potential to grow in real etate and close to metro and with a lot of bargain, expect the roi to realize with at least 3-4 years and not like buy -sell in short time.
  • The agents also wont disclose the taxes, vat, withholding tax etc details so in the end your net roi will be so less than you initially assumed.

Self Live Purpose

  • I found turkey quit fits in this area. You can have a reasonable affordable property for self live that suits your luxary style. Similar property will cost at least 3 times in for example dubai.
  • There are some very good projects that I have seen that falls in this category which are a bit far from city center but its worth it. I can share these details if contacted, as I do not want to sound like a sales pitch. I have done a study of such projects.

Cheers

Fusion

 

 

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In my opinion all of your observations are correct, research is always worth the time and effort.

 

Çukurbağlı's blog. Warning - takes you off the forum and into the www.wilderness

 

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I would be wary about purchasing simply as in investment opportunity. Politics can change the desire for foreigners to live in any country which may be reflected in the value of property. Having said that, we own here and are perfectly happy living in Turkey, but we are not looking to make a profit.

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Real estate investment is not for every one and its not about being a foreigner in a country. In actual face people invested wisely in dubai and made fortune. Most of the millionaires in the past decade come from real estate investment. Turkey is far more stable than other countries in the region in the long run.  I sort of wanted to reach out to any one who could benefit from my experience.

cheers

 

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  • 1 month later...

Fusions, In my opinion your above stated observations as stated in the overview are correct. I was once involved in Turkish real estate for a short period of time,  offering Istanbul real estate to overseas clients. During that period, I came across many foreigners who were tricked by their agents, it was sad listening to their ordeals, pretty decent people getting scammed by estate agents. Guy like myself couldn't simply carry forward.. so finally decided to take an exit. check the website www.turkeymyhome.com

Regards, Silkroute

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Quote

Based on my research and interaction in the past months, I strongly feel that the real estate market is artificially hyped by the Arab Investors and does not reflect the actual value of the property offered to foreigners.  

Could be. In a hot location, prices can still go up. Like Bitcoin. But forget that. Let me explain what you should be looking at.

If you want to buy a house in Turkey and live here, if that is what you want, it is a good thing to do. If you want to do it as an investment, you need to look at other things. Especially the rent-to-value ratio.

In my case, I bought a place to live in San Diego California. Before leaving for Turkey, I turned it over to a property management company. Besides dealing with tenant problems (including taking them to court and evicting them if they stop paying rent), they take ten percent of the incoming rent and put the rest directly into my bank account.

I am making around ten percent per year on the property. And this is represented by the rent-to-value ratio. Let me explain the concept.

Let's say you have a property that you bought for $100,000 USD. A ten-percent rent-to-value ratio means you are making 10,000 per year on that $100,000 USD investment (in monthly rents). This is a normal return for rental property owners in the United States.

But in Turkey the rent-to-value ratio is around four percent (4%). Which, compared to the United States, is abysmal.

For that reason, it makes more sense for me to buy property in my own country, collect rent from there, and pay rent in Turkey. If I bought in Turkey and planned to rent the place out to make a profit, that would be a bad decision compared to my current position.

It may be the same for you. Learn the rent-to-value ratio in your own country first. If it is better there, buy property there, collect rent from there, and pay rent in Turkey.

Quote

Many false promised offered that a property unit upon completion in 2 years will generate a 25% min appreciation and profit while the fact is that there are so many many projects in the new areas (which are essentially being the focus of boom) being developed, that why would any one wants to pay cash (with 25% premium) to buy from you, while he or she can simply go for another project in the same area.

What do you mean by "premium?" do you mean you are paying them more or you are getting a 25% discount?

Quote

I negotiated a property that was offered to me with starting at 600K TL down to 380k TL. This shows that there is a nasty game being played by these agents. 

Hell yes. A real estate agent explained the game to me. Lets say a seller wants to sell their house. The go to the real estate company and say "I want 100,000 TL for my house." The real estate company has nothing to lose, since they work on commissions. So they figure out what they can sell it for. They put it on the market for 150,000 TL. If somebody is willing to pay that, they make a 6% commission, plus 50,000 TL because they raised the price.

Quote

Some of the projects are put on hold for construction and you never know the credibility of the unit will be delivered to you on time or not

No. You can never know. I asked a property developer if a customer could get access to their books to see if the company was solvent (that is, in a good cash position) or not. The property developer said no. So it is impossible to know what is actually going on in the background.

If you buy a previously-owned property, it's already built. Or if you buy a property which is already finished. Same thing. You can touch what you are buying. Of course there are other things to look out for, but at least what you are buying is a finished product, and not a promise that there will be a finished product.

Fusion, you have provided some excellent information and points of discussion here. I hope you will update us all on your investigation into these things.

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Many thanks Ken for your feedback. So far I have stopped looking to buy property in Turkey for reasons we all agreed upon as mentioned in our posts on here. If there is an interest to live in turkey the best option is rental. 

Turkey rental yield is certainly not good for rental investment concept as you rightly explained. While buy-hold-sell may be a good option for certain areas and one needs to do a lot of Due diligence about the developer before buying into it. For me this option is not appealing for the reason that one needs to hold the property for at least 5 years and during 5 years you will only get a 3-3.5% rental yield. Yet this option may still be the choice if you want to diversify your properties at different places so in the event of a fall out in one place, your investment will still be safe.

Real estate sector has seen an exponential growth in many countries and many have benefited and many more have lost their hard earned cash as well.

I think real estate in Turkey is analogous to forex trading where folks owning the platform makes a lot of money from their commission while the end users who trade continue to lose except a few who have insider information or who are over smart then the brokers ;-)

For self living, Turkey is the best choice for me as it offers very good climate plus the cost living is far less than many other countries with similar infrastructure and safety.

The only issue is the language and i would certainly recommend people to learn the language if she or he wants to stay in Turkey for long and also want to do some sort of business or involve with properties or rentals. 

Cheers

 

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  • 1 year later...
On 29/12/2017 at 23:00, Ken Grubb said:

Let's say you have a property that you bought for $100,000 USD. A ten-percent rent-to-value ratio means you are making 10,000 per year on that $100,000 USD investment (in monthly rents). This is a normal return for rental property owners in the United States.

Such high rate values are usually only in very low tax countries possible. The here noted uae at example never gain such a margin as there are about 50% of empty buidlings. Aside the often poor fitment and furnishing quality of them, this oil-boys change their 'rules' as often as the wind changes its direction. Their so called free zones a.e. are only free to locals as foreigners are ripped off with by payments and only the building is 'free'. The rest is not. Anyway

Panama would be another place of interest but the legal certainty seems unsafe and PC suffers also from an average over supply. But the invest to net-profit margins about 10% and royalty free property ownership up to 125'000 $ is highly appreciated. Much higher then in many eu- and non eu -countries where the average profit margin is by 2.5%

My interest to own property in Turkey comes straight to gain profit from my investments. Because the eu and non-eu are becoming anymore a faschistic monster and i want to live any longer in this monster. The Turkey seems to me a legal certain and multipolar and liberal oriented country. A 4-5 floor appt building rented off to a part to tourists during the season, or the whole year, and shops in the free zone of Izmir and/or Antalya importing and selling machinery from Russia. Can any one here tell me exactly about their taxations and owning risks. Founding a free zone company isnt that tricky when you know the right providers but i didnt found the right answers yet how to export into the turkish economy is working.

Regards

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If you mean the edit function as in editing your post, you can only do that for a few hours, because sometimes people change their post later to some advertisement or something else we don't want in the forums.

One advantage is that in Turkey, if you own the property for five years, there is no capital gains tax.

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The average return on investment in Turkey is around 4%. The new developments in Istanbul are averaging 6% at the moment. Now if you are truly investing, you are not holding on to this property for a long period of time. Average real estate investment for gain is 2-3 years. As the original post stated this is a "hyped-up" market are truly incorrect as proven by latest numbers. You can truly expect a 20% return on the right investment in Istanbul. The next market we are watchin is Izmir, however, you must be very select at the moment. Properties in Antalya, Fethiye, Bodrum, Alanya, if purchased out right can be a safe option for someone wishing to make an income during season and to have income to survive. I'm going to need more information to really guide you in the best way possible, as commercial options return low yields historically here in Turkey. 

Justin Mays
Property Turkey
"Invest Today, Benefit Tomorrow"
Email: [email protected] / Whatsapp: +90 505 177 18 28

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3 minutes ago, IbrahimAbi said:

This is beginning to sound like an advertorial posting, seeking business.

Ibrahim, 
 

If on my end, I wasn't trying to go in that direction. Just trying to fully understand what he is looking for. Let me know where it leads astray and I will edit. Wouldn't be posting numbers and market interest if trying to drum up business. 

Justin Mays
Property Turkey
"Invest Today, Benefit Tomorrow"
Email: [email protected] / Whatsapp: +90 505 177 18 28

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