Buying Off plan Property in Turkey

Buying off plan property to make the highest capital returns

Buying off plan property is widely accepted as the best way for investors to maximise profits on any investment made in Turkey for the lowest price available on any given development. The earlier in the development stage that you purchase, the lower the price you pay and the higher the profit. Not only this, but buying at certain times of the year also enables you to get a better price. It is generally over the winter months that is considered the best time to buy, as come the spring when there are more buyers around, prices tend to increase.

If the commitment is made whilst the property is still off plan, you could have up to 2 years in which to take advantage of capital growth before handing over that final payment. Should you then decide to rent the property for a couple of years, an excellent income can be made whilst the property is appreciating in value.

To take advantage of low prices on a newly released development, new legislation now allows foreigners to obtain a mortgage for off-plan property in Turkey, which is excellent news for investors and those who don't have enough cash to put down in stage payments.

People looking purely for a holiday home are more likely to buy a property that is almost complete, or a resale because they like to see the finished article. Visualising that dream home is often difficult when faced only with a plot of land and a drawing. True investors operate under a different principle, they are looking only at what returns they can achieve so their purchase is decided by buying price & resale or completion value.

The principle of buying off plan property

When a developer releases a new project, it is usually essential that he makes some sales before foundations are laid to help him financially to complete the build. By selling off plan, he will sell the initial 'phase' or a certain number of properties at 'early release' prices on a first come first served basis which will be the lowest on the entire development. Buying at these prices ensures optimum increases on the value when the purchaser comes to sell, which dedicated investors will often do well before completion of the development. These people have bought solely to make a profit. As the development progresses, prices are likely to increase, but as long as you purchase whilst it is still considered to be ‘off plan’, profits can be excellent. Given the rapidly appreciating value of virtually any dirt with some mortar on it in many areas of Turkey, especially in Istanbul   it is almost certain that buyers will make profit if buying this way.

In addition to the early release price, investors buying off plan property benefit from a low deposit and payment plan which can be spread over the course of the build. Developers in Turkey are often very flexible with their payment plans which can be negotiated to suit.

On completion of the development the value of the property can increase anywhere between 10 – 50% (sometimes more depending on area and length of construction process) above the original purchase price. As the developer sells more properties on his development, the pressure to sell eases and prices start to rise. In Turkey, price rises are common on a monthly basis.

Despite the fact that there is some element of risk involved in using this option to buy property, it is usually very popular with speculators or investors looking to make a return on their investment. The highest risk is that the developer could run out of cash, fail to complete the project and file for bankruptcy. That would usually leave buyers to bear the loss of the money that they have paid up front. This is actually a very rare occurrence anywhere in the world, and the majority of developers offer bank guarantees to prevent this happening. If you are thinking of buying a property in Turkey, check that the builders offer this guarantee. Once a building is almost complete however, you can be assured that you will not need it. However it does illustrate the fact that one cannot be too careful in the matter of buying off plan property in Turkey.

To make the most of an off plan property investment there are some factors that are vital to consider before making a purchase. Firstly, get in as early as you can on the development, preferably when drawings and floor plans are first released and before any foundations are laid. Secondly, early investors will have the choice of the best properties with the best views within the development. These are the properties that will be easier to sell on completion. For a buy to let property, careful consideration should be given to location and the number of properties within the development. A property 30 minutes from beaches, bars and restaurants, or on a complex where 50 others may also be available for rent is an unwise choice. Likewise, when the time comes to sell, where there are many on the market in the same development, you may have to wait a while to find a buyer.

Off plan Buy to Let property bought early on in the development will yield the best return of all for any invesor enabling them to take advantage of capital growth and a rental income from holiday or long term lets in Turkey.

Not only are there fantastic investment opportunities, but with twenty five million tourists visiting Turkey yearly, there is the potential for excellent rental returns. Outstanding deals - early release prices, and the best payment plans.

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