- The real estate market in Turkey is developing rapidly. The statistics show a roaring demand and a rapid increase of sales prices. Can foreigners enter the market not as ordinary buyers, but as developers?
- The real estate sector in Turkey has always been profitable - for both locals and foreigners. There are no restrictions for foreign investors in our country.
A foreigner can purchase an off-plan property and then sell it with a good profit. It is a very popular strategy, many people do it this way.
The second option is to establish a local company - independently or in partnership with Turkish citizens, find a land plot, develop a project, build a complex ...
- What are the restrictions for foreign legal entities in this business?
- There is no obligation to have a Turkish partner. This requirement is not provided by the law. But in practice, that's exactly what foreigners do. If I were an investor looking for an option in a foreign country, I would do the same. It is hard to come to an unfamiliar market alone without knowing the local rules.
Later on you will need а Turkish contractor to implement the project. This is required by the state. The supervision of the construction industry in Turkey is very strict, only licensed organizations have the right to build housing. That is, a foreign company can be a developer, but a Turkish contractor should be in charge of the construction.
- Let's say I have an idea to buy a plot of land near the sea and build an apartment complex or several villas with the intention to sell all that later. What approach to the implementation of the development strategy would you recommend?
- In Turkey, different land plots have different building permits and allowable land-to-building ratios. Therefore, you have to make up your mind what to build on it - villas, an apartment building or something else before you purchase a land plot. Otherwise, it may turn out that only the construction of private villas is allowed on the acquired land, and you will not be able to realize the idea of building up a high-rise complex.
- What should you focus on when choosing a land plot?
- There are three factors that are very important. First of all, you should examine the building permit - what is allowed to build on this particular land plot.
Secondly, the location - how competitive it is for selling a ready property, is the land worth the price that is asked for it.
And thirdly, the quality of the site - is it a mountainous area or flat terrain. This factor greatly affects the cost of the project. In Alanya, by the way, most of the areas are mountainous.
- How expensive is it to build in the mountains?
- The difference is very large - about 50% more when compared to building on a flat area. Sometimes it is cheaper to build a high-rise building than a villa. Of course, all these calculations should be carried out before the start of the project.
- It turns out that an investor who wants to implement development projects needs experience in construction in order to take all these nuances into account...
- Not necessarily. Yes, it is easier to do business with a person who knows his way around construction, simply because we speak the same language with him. But our company provides support to investors at all stages - from project development to the sale of real estate objects afterwards. We have great experience in this sphere. Therefore, it does not matter whether the investor understands construction or not. The main thing is that he should have a desire to develop a development business in Turkey. And of course, trust is important.
For example, investors who work with us, are engaged in agriculture in back in their country, and here, in Alanya, they build residential complexes with our help.
- If an investor comes to you with the idea of a development project, what exactly will you do for him?
- First of all, will study his own idea: what he wants to build, how much he wishes to earn, how he plans to use the project in the future... And based on this, we select a land plot, calculate construction costs. Then we prepare a business plan: construction, advertising, sales ... We provide a complete set of services.
It often happens in a different way. For example, the investor claims he has five million dollars, and asks for advice. And starting from this amount, we offer various solutions on how to boost this money. There are a lot of options.
- How long does it take to complete such projects?
- It takes about 18-24 months to implement a big project with a budget of about five million dollars
- What does "big project" mean?
- For example, we now have a land plot of 6500 sq. m, on which we are building a complex of 12 detached 300-meter villas, each with its own pool. The costs for the purchase of the site and the construction of turnkey houses amounted to 6 million euros. When selling objects, the investor receives 9.6 million euros. And this profit is gained in 24 months.
- What projects commissioned by foreign investors have you bilt?
- We have completed, i.e. have designed, built and already sold projects for nine European investors. The complexes were different - villas, duplexes, apartments ... Each investor had his own project. But everyone was shocked by the income that can be received in Turkey, everyone was satisfied.
For example, we have an investor from Jordan. He has already sold his first project of villas in KIWI project. Now he has re-invested in a similar project KIWI-2, because he was satisfied with the result.
- What is in common between foreign investors who enter the Turkish market?
- In my experience, there are three types of investors. The first ones buy real estate at the start of construction and then sell the objects closer to completion. This is a simple strategy that does not require large investments.
The second category of investors expects to receive regular rental income. This idea can also be implemented in different ways.
And the third type of investor - I call them "sleeping investors" - buys only land. In Turkey, as well as around the world, the price of land is rising every year. Especially by the sea coast! For example, one Russian investor bought a land plot with our help for 1.5 million euros three years ago. Now this land is worth 20 million euros! But he does not sell it and does not build anything there.
In my opinion, it is important for a real estate investor to have patience. If you have patience, you might win much more. Very often you just have to wait.
- And the last question is about the famous Citizenship by Investment program: can foreigners who invest in construction count on getting a passport?
- Certainly! Many people know that purchasing a home in Turkey worth $400,000 or more entitles you to receive Turkish citizenship. But other types of real estate, including land plots, are also suitable to participate in the program. Other options are also provided, for example, investments in fixed assets of a Turkish company or opening a bank deposit. So yes, investors who purchase construction also receive citizenship.
The specialists of Home Real Estate & Investment swill answer your questions about investing in the construction in Turkey - please contact us!