Investing in real estate anywhere in the world can be a maze of confusion. Istanbul has nuances that are not replicated around the world. Here, we cover the three golden rules of investing in Istanbul.
Location, Location, Location
Location is true of any investment around the world - it is always the number one rule. This rule takes on a different meaning in Istanbul. Istanbul has expanded its borders massively over the last two decades, meaning some suburban "towns" are now classed as Istanbul. In reality, these are so far from the traditional city centre of Istanbul, that they are towns in their own rights. Areas west of the Kucukcekmece lake are so far away from the city centre, not just physically but in terms of traffic, that they should be treated as investing in an entirely different city.
Unlike any other major city, Istanbul investors give added value to the brand of the development. A normal standard building with ten floors, is not the same price as a brand name development that can be literally a few hundred metres away. This concept is repeated all over Istanbul. Given two developments of exactly the same spec and location, but one with a well known brand name and one without - the brand name will usually cost 15-20% more up front. Not only that, it attracts a higher rental income, a better type of tenant, and an easier future resale.
Timing is especially true in Istanbul when it comes to a few aspects. Firstly timing is important in terms of the phase of the development. A development is at its cheapest when it first launches i.e. is completely off plan. At this point, you may get a call from your broker, telling you that "XYZ" development will increase prices in a couple of weeks. Whilst this sounds like a sales pitch, it generally is not.
The other aspect of timing is the exchange rate. International buyers generally bring one of the three big currencies to Turkey (USD, EUR, GBP). The lira is prone to quite extreme fluctuations up and down - it is crucial to have your foreign currency sitting in a bank account where you can take an immediate position in Lira when the Lira hits a peak against your currency.