Return on investment and income from investments in Turkish real estate

Profitability is an indicator of investment efficiency that allows determining the profitability of their use. In the case of investments in Turkish real estate, profitability can be achieved through both rental income and resale. However, in order to evaluate the effectiveness of investments, it is necessary to calculate both profitability and return on investment (ROI).

 

Buying property in Turkey has attractive prospects for foreign investors, as it allows them to obtain Turkish residency and citizenship, as well as increase their income. Houses and apartments in the resort country are in high demand among both renters and buyers. One of the distinctive features of investments in Turkish real estate is the annual increase in prices per square meter, which ensures the reliability and profitability of investments.

 

To determine the investment strategy in Turkish real estate and evaluate its profitability, it is necessary to consider the type and location of the property, the housing class, the scenic characteristics, the age of the housing stock, and the level of infrastructure. Moreover, it is important to determine the investment goal – generating income from rental or resale.

 

If you plan to generate income from short-term rental of properties, it is recommended to choose properties that have walking access to the sea, availability of commercial and entertainment infrastructure, and proximity to historical landmarks. In the case of long-term rentals, it is important to pay attention to the level of neighborhood development, transportation accessibility, and absence of tourist noise and loud music.

 

The profitability of property in Turkey directly depends on taking into account all the criteria and can range from 6% to 12% on average for rental income. The most promising direction for profitable investments is buying apartments during the construction phase, as property prices can be lower than market prices by 30-40% at the foundation stage and 15-20% when 50% complete. The annual growth rate of property prices in Turkey is approximately 15%, and in the past year, the cost of housing has more than doubled.

 

Before embarking on investments in Turkish real estate, it is necessary to calculate the return on investment (ROI) – a financial profitability coefficient. It is determined by dividing the annual income by all investment costs and multiplying the result by 100. The calculation of ROI should take into account taxes, insurance expenses, maintenance, and rental fees.

 

A good indicator of profitability is an annual property yield of 7% or higher. For example, with an investment of $100,000 in property, taking into account all expenses and taxes, and achieving a 10% annual income, the payback period for investments would be 10 years. Calculating profitability allows determining monthly and annual investment profits.

 

In the case of investments in property at the initial construction stage, the efficiency indicator will significantly increase, and the payback time will be reduced several times.

 

If you are interested in profitable apartments in the Republic of Turkey, please contact our manager, and we will provide you with a selection of the most attractive investment properties. Our company, UINVEST GROUP, has good knowledge of the real estate market in Turkey and can offer you competitive prices and optimal purchase conditions.

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