Buying a Property Abroad in Turkey as a Rental Investment
The Turkish property experts, Property Turkey, have compiled a guide explaining the rental property purchase process in Turkey
Turkey has long been an attractive destination for foreign nationals keen to buy a home, with many choosing to rent out a holiday residence to generate an income or purchase a property as an investment asset.
As the tourism sector grows, buoyed by favourable exchange rates, there are several resorts, coastal regions and cities where rental properties commend superb rates, with a diverse range of options and a continual year-on-year appreciation across the Turkish property market.
The experts for property for sale in Turkey, Property Turkey, have compiled this guide to explain the process of purchasing a rental property in the country, some of the key areas to consider, and the types of returns you might expect to make on your investment.
Why Purchase an Investment Property in Turkey?
In the year to November 2023, the average house price in Turkey increased by a healthy 12.4% after adjusting for inflation, according to figures from the Central Bank of the Republic of Turkey. This level of sustained appreciation is replicated throughout the country, with the fastest pace of growth in key tourist destinations and in major cities like Ankara.
However, one of the big draws of Turkey for property investors is that prices remain highly affordable and significantly lower than in almost any other destination. For example:
- If you decided to purchase a luxury villa for sale in Bodrum, you would currently pay roughly 20,000 Turkish Lira per square metre – that is around £518, over 77% lower than an equivalent property in London.
- A comparable apartment in Istanbul would cost around 87,760 Lira per square metre, about £2,272 – which remains over 43% cheaper than a central apartment in Manchester.
These low barriers to entry into the real estate investment market and the freedoms UK citizens have to purchase Turkish properties have generated a substantial amount of interest both for those looking to establish a global property portfolio and second homeowners renting out a holiday residence.
Rental properties offer long-term appreciation owing to the steady growth of the market, low purchasing costs, and the ability to earn rental income to cover the cost of financing and generate a monthly profit margin.
While exact rental figures will naturally vary between areas, the duration of the stay and the time of the year, rental properties command a gross rental yield of 6.36% on average per annum.
The Property Buying Process in Turkey for Foreign Nationals
Our advice for any foreign buyer looking for a rental property in Turkey is always to consult our capable team – it's essential you work with a specialist in the local property market since there remain some illegitimate vendors who may not have your best interests at heart.
Provided you have the right assistance, buying a rental home is relatively straightforward, and there is no obligation to apply for a residence permit. However, some foreign nationals choose to apply for the Turkish citizenship by investment programme, which grants a second passport to investors who buy a qualifying residence worth $400,000 (USD) or above. Otherwise, you will need to apply to the closest TNP Foreigner's Department, which will issue you with a Yabanci Kimlik or foreigner identification number, free of charge.
The usual process is as follows once you have selected the area in which you'd like to buy and have chosen a property that matches your objectives:
- Price negotiations take place between the buyer and seller or can be managed on your behalf by your agent.
- Both parties sign a legally binding sales contract to confirm the agreed price and terms of the sale, with a reservation deposit payable.
- Your lawyer will then deal with the formal documentation to register the transaction and will require details of your ID and identification number or residence permit as applicable.
- Next, an independent surveyor will appraise the property and generate a valuation if this hasn’t been carried out beforehand, which takes around three to four days on average.
- When all the details have been verified, your lawyer will review the property ownership paperwork, called a Tapu, and submit this to be registered against you as the new owner.
Finally, once the transaction is complete and the balance paid, you become the legal owner and have the freedom to visit your property or let it out as you wish. There are no restrictions on letting out a rental property in Turkey, although it remains important to have a formal rental agreement or contract for each tenant or guest.
Areas in Turkey With Premium Rental Property Prices
We often speak with buyers who are unsure where to invest in Turkey since there are so many resorts, regions, cities, and coastal areas that are hugely popular with global visitors or provide ongoing demand for premium rental homes from professionals and families.
Much depends on your aspirations and whether there are certain places you'd prefer to own a rental property, especially if you intend to use the residence yourself.
Buying a Rental Property in Istanbul
Istanbul is a busy, thriving, modern city with the best-established property market, which means residences here are more expensive than elsewhere. From high-end mansions on the shores of the Bosporus to contemporary luxury developments in the quiet outskirts of the city, there is a broad breadth of choice. Around 44% of foreign buyers choose Istanbul when purchasing a home or rental property.
Antalya as a Property Investment Location
Antalya has a diverse expat community and offers slightly lower property purchase costs than Istanbul, making it the second most popular location where 21% of investors decide to buy. The city is a hub for tourism, along with smaller surrounding areas like Alanya, boasting pristine beaches and gorgeous turquoise water.
Other areas, including Bodrum, Bursa, Fethiye and Ankara, are equally desirable, offering everything from beautiful fishing villages to soaring mountain ranges, green forests and national parks, and, of course, the thermal baths Turkey is famous for.
Please get in touch if you'd like tailored guidance about these areas in Turkey or to discuss the real estate market and rental opportunities available. You can also learn more about investment properties in Turkey through our dedicated pages or browse real estate listings in some of the highest-demand locations.
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About Property Turkey: With 20+ years experience in the Turkish real estate market, team Property Turkey are your experienced, friendly and independent overseas real estate consultants. Our head office is located in London, UK with regional operational offices in: Bodrum, Fethiye & Kalkan, Antalya and Istanbul.
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Source Company: https://www.propertyturkey.com/