Finding the best return on investment in real estate
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Real Estate Investment For Returns

Created : 10 Jan 2023
ROI property

By Justin Mays:

Turkey is a capital magnet; it attracts numerous foreigners every year for investment thanks to the existence of diverse investment options available including real estate investment, which has become very popular recently. Real estate, in particular, is of great interest to those wishing to invest in Turkey. The return on real estate investment in Turkey is one of the biggest catches that drive many foreign investors to enter the Turkish real estate market.

Real estate as an investment

Real estate investment is one of the safest earning methods today. Real estate brings has the potential to bring great success to investors if the right choices are made. However, not every real estate investment is equally profitable; some are low-yielding. 

Is real estate investment in Turkey profitable?

In the real estate market, not all properties are equal. A property in an undesirable area or with normal specifications is not the same as a strategic location with high specifications. An investment can only be profitable and its returns will be high if it is chosen intelligently. The quality of the property, its location, and the specifications of its construction and design play a major role in determining the return on investment.

  • Pay attention to the location of the property, for example, its proximity to the airport, a location with a sea view etc.

  • What is the type of property you are picking? is it residential (villa, apartment in a complex, etc.) or is it commercial (office, shopping mall, hotel etc)?

  • Relatively modern properties are more desirable than old ones, or you can choose to completely renovate an old property as well so you get a good investment return.

  • If the property is within a complex, it will have additional services such as the gym, swimming pool, and gardens thereby increasing its investment return.

What is the return on real estate investment in Turkey?

The return on investment is used to measure the profitability of a particular investment option or to compare multiple options. The ROI is generally the ratio between the net profit and the cost of the investment. A higher return on investment indicates positive gains for the investment.

Istanbul is the commercial capital of Turkey. It offers a wide choice of residential and commercial properties that have the highest investment returns among other cities in Turkey due to its strong infrastructure and extensive transportation network. 

When comparing it with the rest of Europe, we will find that its investment returns are higher in Turkey even than those in some European countries because Istanbul has the most beautiful and distinguished real estate, and many companies guarantee profit returns that may extend to 20 years.

The real estate sector in Turkey is known to offer investors 150% returns. Many projects in Turkey are distributed throughout the country's cities, including residential and commercial. It's advised that before purchasing a house in Turkey, you must first choose the budget you are ready to invest in. You must also choose the right property to get the best ROI and you must evaluate the property's increased worth, which can be known by how enticing it appears to potential buyers.

Is it recommended to invest in real estate in Turkey?

According to the statistics issued by the Turkish Statistical Institutions, demand for the real estate market of all kinds has recently witnessed a huge increase because of the dynamic market, especially in hot real estate areas near mega projects, transportation, business centers, etc.

Real estate is an important investment sector in Turkey, especially in the major cities whose prices have recorded a rapid increase in recent years. The real estate market of Turkey (buying, selling, and renting) is facing a growing need for more properties to balance the shooting demand every year.

What is yield? How is it calculated?

When you invest in a property, what the property brings to you is called yield. While buying a property, investors focus on its potential yield. Before considering a property most investors first calculate the property's yield which is a measure of the future income of the investment. Real estate yield is a measurement of the future income of an investment. Yield is based on rental income only.

Types of yields

It is clear that returns differ through different real estate investments in Turkey, given the city, the type of property, and the buyer's ability to make the best use of the property purchased. The yields from investment can vary from low to high.

  • Low-yield Real Estate Investment

Buying and renting an apartment or shop is an example of a low-yield real estate investment. Although it might not sound as lucrative it can be profitable for you in many cases. Sometimes, prices rise faster with these properties, unlike many other property types. If the market goes bad, low-yield properties will lose less value and their prices will recover faster. Therefore, low-yield real estate can be advantageous in risky periods.

  • Real Estate Investment with Medium Returns

Examples of medium-return real estate investments include buying an apartment or a villa in a tourist area and renting them. It also includes purchasing a big shop in a lively area or a busy shopping mall and buying a restaurant or a café with medium returns.

  • High-yield Real Estate Investment

High-yield real estate investment options include buying large facilities, such as a hotel, a hospital, or a factory, or purchasing part of a large commercial complex. Other examples will be making big real estate investments like buying land and establishing a large residential or commercial project.

How is the yield calculated?

Following these steps, you can calculate the yield as a percentage:

1. Subtract the current costs of the property and any rental fees you lose while it's vacant from the property's annual rental income.

2. Divide the number you got by the property value.

3. Multiply the number you got by 100.

Calculating the net yield: Annual rental income (rent per week x 52) – annual expenses and costs/ property value x 100

For example, you bought a property in 2020 for USD 20,00,000. You rent it out for USD 10,000 per month and have annual expenses of USD 30,000 (repairs, property tax, maintenance charges, etc.). The annual rent earned will be USD 1,20,000.

Net yield: 1,20,000-30,000/ 20,00,000x 100 = 4.5%

Gross yield: 1,20,000/20,00,000x 100 = 6%

How Prime Property Turkey can help you?

At Prime Property Turkey, we can help you with just the right kind of property for your needs. With our expert services, you can become a property owner much easier. We not just we assist you physically but also stay a step ahead with our virtual real estate services. Yes, we offer a virtual property tour specially designed for you to explore and visit properties in Turkey from the comfort of your home abroad. Only six simple steps and you can buy the property you like and have the option to become a Turkish citizen by investing in real estate. Invest in the kind of property you like whether an apartment, a bungalow, a villa, a commercial property, a duplex, a mansion, or a penthouse. Make the most of our sales, resales, aftersales, legal, and even citizenship services. 

If you are looking to make investing in a property that could give you good returns in the future, get in touch with Prime Property Turkey today and we shall bring you the best of the options. Our rich experience and team of experts will guide you through every step

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