All experts approve that real estate is the best long-term investment to make, and the property investment in Turkey is no exception. Many foreigners have gathered to take advantage of low prices, new building and the potential for capital appreciation.
However, as a second homeowner, you may wonder if it is better to rent out property or sell it and invest the money somewhere else. Some expats living in Turkey have sold up, and deposited the money in savings accounts.
It sounds attractive but base your decision on whether to sell or rent on current market conditions and what makes the most sense financially.
SELLING POINTS TO CONSIDER
1 - Market Availability
In most areas of Turkey, mass availability is keeping house prices down. In Istanbul real estate, new build constructions captivate the market, hence despite the age and conditions of resale homes, they control the price index.
Other regions such as Kalkan, have less land available for building. Thus re-sale homes lead the market, and the higher price bracket shows the lack of availability. If you are not satisfied with your home’s current value, it might be worth renting out and weathering the market until values increase.
2 - Capital Gains Tax
In Turkey, selling the property before five years of ownership incurs capital gains tax, on profit made between the buying and selling prices. In cases, the owner makes a gain of 70.000 Turkish Lira or more, the burden is as high as 35%. In Turkey, it is worth waiting out the five years before selling.
Renting Out Your Home: Points to Think About
1 - Market Demand
Business Insider registered Turkey as the 25th best country for foreigners to buy a rental property and make revenue from it. They estimate rental profits of 3.62% but in a few holiday coastal resorts that can reach as high as 5%.
Look at the market and see if there is a demand. In several Aegean and Mediterranean coastal resorts, renters fight to find long term homes because landowners make more money from holiday rentals. However, in Istanbul, you have better chances of finding long term renters because it is a business and education center.
2 - Can You Handle Being a Landlord?
Being a landlord takes patience, people skills and on certain occasions, much time out of your day. Occupants often have high stresses, you suffer expenses from maintenance and while cleanliness is everything, some renters leave houses to need urgent repairs.
3 - Paying Tax
Much the same as any other income, landlords in Turkey must register and pay tax. Bottom earnings are tax-free, and you can still claim expenses. You must sign up to the GIYKIMBIL system, announce everyone living in your property, organize and notarize formal contracts and use an accountant to handle financial businesses. Being organized and excellent financial management are much-needed skills that landlords should have.
Last Updated: 3.4.2019 14:00:09