Buy to let Istanbul Property

Naturally, many if not most Istanbul real estate investors are seeking to gain rental income from properties that they purchase. for_rentApart from those who are buying to live in a property, the vast majority are quite keen to know how much a prospective Istanbul property would fetch on the rental market and often base decisions on whether or not to purchase based on such projections.
Unless you are intimately familiar with the rental market, you will probably just be guessing and your figures will be well off. Below are some tips to provide more precision for your calculations:

  • -ask the realtor directly what the income is. Obtain proof by way of a rental contract or monthly bank deposits, if possible.
  • -scan the internet for properties with similar character, size and location. Try to get five, and then average them, finally subtracting ten percent for assumed negotiated final prices.
  • -use common sense. If the figure being given just seems too high, it probably is. Better to err on the side of caution.
  • -find an online index giving rental values in particular neighborhoods, try this or this. Look a few years back to add some historical perspective, as well as give you insight if rents are trending higher.

A few points to be aware of:

  • -if you are considering a property in Istanbul with an in-situ tenant, find out how long the tenant is staying. Sometimes, they may be on a shorter contract (3-6 months) and hence will likely be paying a higher rent than those who have been living in a property for years. This may artifically inflate the yield.
  • -again for in-situ tenants, understand the current contract. Some tenants prefer to get a contract with utilities included, as often their companies pay a lump sum monthly. In this case, they are often overpaying for the convenience of not having to worry about utilities. That can be fine, but just be aware that the yield may decrease when you get a new tenant in and they just want to pay the basic rent.
  • -be aware of any tenant that has a close connection to the owner, be it a relative or close friend. Understanding the nature of their agreement is not always easy and you cannot be sure what you are getting into. Better to start fresh with your own tenant in this case, unless you feel good about the tenant.

What are some other points to consider when aiming to maximize your investment and minimize fuss?
Sometimes in our efforts to sign on with tenants, owners can be too kean and overlook diligence in properly screening the tenant.

This guy?

This guy?

In my experience, avoid tenants in Istanbul who do not have steady work, as the temptation is too great for them not to pay when the going gets tough, and favorable tenancy laws make this easier. It is better to review the tenant properly before signing, as this will save headaches later on.
Another good idea is to immediately set aside ten percent of the rental income for repairs.

or this guy?

or this guy?

In my experience, this is usually more than enough, and it can be viewed as an acceptable amount for painting, etc. However, if you have not set the funds aside systematically, it can lead you to negative thoughts on your rental, where there should be none.
Istanbul is a good city to be a property owner. The rents are high and demand or to in most areas is pretty brisk. Small apartments in Aynali Cesme or Talabasi should always have good income potential, take a look at the potentials – Aynalicesme and Tarlabasi.

Time is money!

Time is money!

If your property is remaining empty for several months, you should be honest with yourself and ask if it is really properly priced and if it is in acceptable rentable standard, these being the two roadblocks in successfully renting out your property.
Finally, it should be noted that some properties outperform others on the rental market, but may not achieve the same capital growth. This should be considered prior to any purchase. There are often good reasons for this, yet they may not be obvious on first glance (for example, a student rental property may get higher yields as many people may share the space. Yet it may nor appreciate so well if the property gets more wear and tear).

www.lilimont-istanbul-realestate.com

How’s Istanbul property faring with the new year?

With balmy spring-like weather for most of January, the Istanbul real estate scene for 2015 is off to a zippy start. Lilimont has been keeping busy with a handful of transactions, as well as a few renovation projects and our proffessional services for foreigners (these will both be discussed in future blogs).

As global currencies seem to be flying all over the place, often unpredictably due to strong intervention by central banks, it often means great buying opportunities for investors, with property in Istanbul coming at discount prices.

Perhaps another driver has been the absence of bad news. It is a curious thing that often this is enough to float markets higher. You often do not always need really good news to push real estate in Istanbul forward and bring life to the market.

So, in short, it has been a good start to the year, but we will continue to keep the pulse and offer regular updates to followers. Of course activity also means that new sellers often enter the market, sensing that it is the right time to sell.

We have several new properties, but I would like to focus on two in particular, owned by the same couple, who are moving on to what is often termed Istanbul’s sister city, Berlin. Anyone familiar with the art scene here will know that there are deep and growing connections between the artistic communities in both cities and it has become de rigeur for young local artists to do a stint in Berlin, and many are opting for longer stays due to the lower cost of living.

The first property is located just 50 meters from the Osmanbey Metro, making it incredibly convenient and central. It is on a quiet side street in a very well- maintained building.

Great pad in Osmanbey

Great pad in Osmanbey

A two bedroom, 120 square meter in immaculate condition, ideal as a rental property. The list price is 300,000 euro, and with the dip in the currency, the price has really come into its own. The renovation style is universally appealing, a perfect blend of the contemporary and the classic.

 

Cool investment in Aynali cesme

Cool investment in Aynali cesme

The second property is located on a quiet side street in flourishing Aynali Cesme. This first floor flat has all of the classic features; high ceilings, wood floors, exposed brick, and hand made Turkish tiles, all at the tempting price of 200,000 euro. It is also in a building that is well taken care of and organized, and in an increasingly prime location.

Perhaps the enterprising individual could obtain both of these properties, providing an excellent foothold in the Istanbul market. Contact Lilimont for viewings!