Property in Turkey: Buyer Beware of Self-Inflicted Injury

Property in Turkey: Buyer Beware of Self-Inflicted Injury….

 

During the last 13+ years more than 70,000 foreigners have purchased property in Turkey….

More than 85% have suffered with difficulties from what happened AFTER the purchase. First it was the British and Northern Europeans; then the Kuwaitis and their complaints resulted in a diplomatic incident; now it’s Citizenship Investors.

 

Official Turkish government agencies have been very proactive in providing solutions. For example, the Office of the President of Turkey has a website dedicated to providing information to guide foreign investors, and several other local agencies have the same. Unfortunately NONE of these websites receive links from the English speaking agents and develops websites (with one exception). Instead, several new websites have sprung up by agents using very similar website names as the government ones: to lure unsuspecting foreigners.

 

So foreigners face some problems when buying property in Turkey, and usually do not find out until after the purchase. To say that the official channels are not very helpful is completely inaccurate. So what is the problem…?

 

The real problem is that many foreign investors prefer to delude themselves, even when they have been told of the risks and problems. Instead of using independent professional advice, they continue to rely on the English language agents’ websites. This leads them to do things they would not do when buying a property in their own country. Perhaps because living in a property all their life, they imagine they know everything necessary to buy one, in a foreign country with an unfamiliar legal and property system.

 

And then there is simple delusion: usually they prefer to take a chance with an agent by convincing themselves it will be all right, all the while knowing they will be paying huge hidden price mark-ups of $20-30,000 instead of paying $2-3000 to a professional advisor in fees. Paying fees to professional advisors is clearly much more difficult for these naive investors, than paying 10 Xs as much in an agent’s hidden price mark-ups. And for that reason the agents continue to do thrive and do business, and the naive foreign investors continue to complain about being ‘ripped off’; but it is a self inflicted injury.

 

Read below how foreign citizenship investor have described their recent experiences;

 

‘---- On Sat, 11 May 2019 13:16:52 +0300 (PersonalDetailsRedacted forPrivacy) wrote ----

 

Its very simple, let me explain my position.

I am looking to buy a property in Turkey for the purpose of Rental Income. I have visited Istanbul back in Nov 2017 and realized the following:

1. Most of the Agents try to see you over priced properties in new developments in  Başakşehir,  Esenyurt,  Avcılar, Buyukcekmece,etc. There are areas far from center and NOT good for rental income. or even resale because no ones going to buy from you when there is an abundance of properties already available direct from constructors ones. I checked later with some of my arab friends and realized they (few ones I know) bought into these areas back in 2013+ and now not able to resell it at all. 
2. The rental income promised to me for some of the properties shown (during my stay in istanbul agents showed me several properties and even projecs like denize istanbul) that I will get 7% Rental Yield and that in 3 years 20% Price appreciation. I later found out from reliable internet europe based sources that the rental yield in turkey is the lowest some where from 2.5% to 3% as NET (after you deduct the rental income tax etc) and that too were for areas like lavent, nisantasi, florya etc. These new dev areas stand no chance near the same figure.  
3. Later in 2018, Lira crashed  (when I visited Istanbul in nov 2017, I cached 1 SAR for 0.95 Lira and now 1 SAR fetches 1.6 Lira) do the math. and see for yourself has the property really appreciated for folks who are foreigners and sending Euros or USD or SAR or AED to buy properties? I feel they will lose their capital even if they are able to resell and bring back the dollar value..

 

  

---- On Sun, 23 Jun 2019 20:27:20 +0300 (PersonalDetailsRedacted forPrivacy) wrote ----

 

Let me make a few statements so you know the background

 

• Based on my one year research and personal visit to Istanbul and understanding, I have opinion that 95% of the agents lie and cheat. In the sense that they will inflate the prices. This is true for either agents or developers. The moment they know you are a foreigner they haunt you and think all foreigners are stupid. So I stay away from such agents. Unfortunately there are no English language folks or depts in Turkey for info gathering so I will need to get a turkish person or company else I could have done all by myself. I am a salaried person but i manager to create a couple of good properties in Dubai completely with my own efforts and now enjoying 6% (it was 9%) net rental yield in Dubai. of course not all properties will give you that . you need to be brutal in your research not to fall for those greedy and cunning agents or builders. there is a whole lot of research involved like the past experience of the builders. how many projects it completed. visiting the completed projects, talking to people there, knowing issues of maintenance, visit forums etc etc. its a hell of a process and i was able to do all for dubai because every one speaks english
• My aim to invest in dubai is twofold. One is to diversify my portfolio as dubai is now down in terms of profit but still better, yet its good idea to diversify and second is to get turkish passport. Of course my main strategy is to use the property for rental income.  am not in for flipping properties. However i should atleast ensure that in 5 years time that i should be able to sell those easily in secondary market. Hence I realized from global property websites that turkey is the lowest in rental incomes; avg 2.5 to 3%. Now all of the agents and developers boasted a lot to me claiming 5 to 8% and thats a big lie. All over world avg rental yield is hardly 3%. Anyway am good to go with 3% net in turkey.
• The new developements claimed in center like maslak or sisili are not exactly in that close. Take for example avengart which is situated up close to the belgard forest. Likewise these new developements are very large in nature with glass walls and all that fancy stuff. maybe appealing to rich arabs --fine. but i doubt i will be able to rent them easily. avengart may have say 500+ units but how many clients will wan to rent? i doubt it. also the example of zorlu i saw so many ads on sahebindan that I am sure 30% of zorlu flats are up for rent -means vacated. Even if am lucky my rentai will be quite low. for exampe the avengart developer says list price 1m but may give upto 900k for cash. In my view this is still over priced and correct price shuld be 700 k
• I sent email to  info@invest.gov.tr who really replied my queries well but they are being political too so no clear answer as well..  They provided me a link emlakkonut.com.tr which does not help much as it has basic info about each property. Then to apply for citizenship, the offics in turkey needs several visits and knwldge of turkey. The avg fee of a lawyer asking is 3250 USD from start to end but the lawyer wont guide me which is best property.
• Other thing i noticed is that some of these developements put up a sign saying we are gvt backed, tapu is ready. now the unit is not handed over but tapu is ready. So i think these agents or companies like avengart have tie up with some agents to process all under the table like getting an assesment report in their favor for the price of property. 
• I did a research on sagenbindan for 1+1 or 2+1 from local market. and concatcted owners or local turkish agents and use google translate to chat on whatsapp and i realize it is MUCH MUCH better to buy a property from secondary market already rented so you know the ROI than going for these new dev projects. But then i need a local turkish expert to negotiate but less price means more rental roi. on the asking price of rents and sell for same properties in areas like levent, nisantase , maslak , gloriya, i found the gross rental yield a 4.1 to 4.3 %. So negotiatate a better price is essential.
• Buying from local means risks. like is tapu real. will govt assess the value correct? is the tenant rent only to sell me as fake etc etc

Hence i asked all of the questions.    ‘

 

 

Unfortunately only about 15% of foreign property buyers use an independent professional advisor: these are usually investors or people from professions like doctors, who understand the value and necessity of expert guidance. The other 85% of buyers seem to think that they can obtain a little advice free from the internet, and that will be enough. What these buyers don’t understand is that agents have many different misleading tactics and deceptions that they use with buyers several times a day, every day, for years. The buyer may be prepared for one tactic, but the agent has many, and will hook the buyer with one of them.

 

No buyer can possibly educate themselves to every trick and ploy. In this situation the buyer can not possibly win. A professional advisorthat has experience dealing with agents’ tricks everyday for years can win.

 

Tags: Buying Property Turkey

#CitizenshipInvestment #Turkey #CitizenshipbyInvestment #PropertyTurkey #RealEstate