International Real Estate | Citizenship | Residencies | International Tax Strategy | Internationalization & Diversification Consultant
Is Istanbul 🇹🇷 real estate starting to be interesting again? What people need to understand about the Istanbul real estate market is that it is a very volatile market. The market can go from frenzied with bidding wars, to drops with little liquidity in the market. After 3 years of price increases in USD terms, prices have been decreasing in USD for the past year, just as rents kept rising in USD. The current market situation is therefore that you can buy apartments downtown Istanbul with rental yields of 6%-7%. As the gap between gross and net rental yields are low in Istanbul, one can easily get net rental yields of 5%-6% pre-tax. Also, as prices are dropping and liquidity is down, it is a clear buyer's market. For people who want cash-flowing real estate at attractive valuations in decent neighbourhoods of a city of over 15 million people, this is not a bad play. And you can get free citizenship out of it Yes, if you invest at least $400,000 in real estate in Turkey (one or multiple properties), you can apply for citizenship for you, your spouse, and underage children. The process takes about one year and requires a single trip to Turkey. After three years you may sell the real estate. It's a great program, especially for Westerners who want geopolitical diversification. There have been strong rumours since last year of a hike to $600,000, so if you are considering this program, don't wait forever. There is also an option with a 3 year $500,000 deposit. What's the catch? It's not a market for the faint of heart. You need to stomach volatility, such as your rents decreasing in USD terms as the Lira goes down, until you renegotiate next year's rent. Also, Turkey invariably makes negative headlines in Western media, and the risk of conflict is ever present in this volatile part of the world. It's part of the game of being a rising middle power with an active diplomacy, strong military and vibrant economy in a region with historical foes around. The risk of earthquakes is real, though this can be mitigated by buying in the right neighbourhoods (which I did) or stronger buildings and getting compulsory earthquake insurance. A case study Here's a case study of an apartment that one of Keith's clients bought. Net rental yields of 5%-6% are doable. https://lnkd.in/emdH8m6b
Net real estate rental yields and cap rates in Istanbul, a case study
https://www.youtube.com/
Tanguy Putz
3mo
Real estate prices drivers in Istanbul are currently very simple: interest rates and building status regarding earthquake risks and fears
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