Features of the rental business in Istanbul

The rental housing market in Istanbul

Istanbul is a huge metropolis with a high demand for housing that significantly exceeds supply. This creates a favorable environment for investors looking to rent out their properties. For locals, it can be challenging to find a long-term apartment, while foreigners find more convenient conditions in this city.

Market analysis of rentals in Istanbul

According to the analytical company Betam, the number of rental offers in Istanbul is steadily decreasing. In October 2022, there were one-third fewer rental announcements than in October 2019. The average life time of an ad is only 14.9 days, indicating the high dynamics of the market.

Yield and rental rates

Investors renting out real estate to foreign tenants can expect stable returns. In Istanbul, it is considered normal to receive up to 4% annual yield from long-term rentals.

Growth in the number of foreign residents

The number of foreign residents in Istanbul is growing. In 2021, their number exceeded 740,000, which indicates the city's attractiveness to foreign citizens.

Buying real estate in Istanbul

If you plan to buy an apartment in Istanbul to rent out, consider not only the cost of the property itself, but also additional expenses such as taxes and utilities. the cost of the property itself, but also additional costs such as taxes and utilities. It is important to It is also important to choose a reliable management company and choose your tenants carefully.

Available housing options

In the Istanbulreal estate market, there are both elite residential complexes, where prices for new apartments start at $201,000, and modern residences with pools and gardens, which can cost up to $259,000. In any case, renting out property promises high returns in this dynamic metropolis.

Prestigious residences:

One of them features 781 apartments, starting at $411,000, with construction set to be completed in 2023. It is located in an area with good infrastructure.

Another residence, consisting of 1,441 apartments, starts at $246,000 and will be ready in 2026. Nearby are a highway and a subway.

Unique complexes:

A recently opened complex with 686 apartments, prices starting from $644,000. Strategically located in an old district.

Additionally, there is another complex with 1,050 apartments starting from $184,000, located in a green, quiet area, with completion scheduled for 2025.

Modernity and comfort:

One of the residential complexes offers 689 apartments, with a starting price of $305,000, set to be completed in 2024.

There is also a complex with a view of the park and the financial center, which includes 167 apartments, priced from $346,000, with completion scheduled for 2023.

Diversity and Demand:

Istanbul attracts various types of renters. Studios and one-bedroom apartments are in demand, especially among businesspeople and tourists. The rental price depends on the area and the class of the property.

Rental prices vary: 50,000 lira ($2,700) for an apartment in a new complex, compared to 10,000 lira ($550) in an old building with similar features.

These are just some of the new offerings in Istanbul, combining comfort, modernity and diversity for the different needs of buyers.

Rental prices for housing in Istanbul continue to rise.

According to the analytical agency Endeksa, the cost of renting housing in Istanbul is rising at a rapid pace as of November 2022.

Prices have increased by158%for the last year and for350%over two years, measured in lira. Converting the data to US dollars, we see an increase in rent by70%for a year and91%in two years.

The influx of financially secure foreigners will lead to a rapid increase in long-term rental prices in convenient areas of the city. Due to its status as an economic and business center, Istanbul is in high demand for premium rental housing.

Russian companies in Turkey

The number of Russian companies established in Turkey has set a record this year: 720 new companies in the first half of the year. enterprises in the first half of the year. Russian companies from petrochemicals, metallurgy, logistics, automotive, and textiles are leading in terms of specialization.

The situation in the rental housing market in Istanbul

Due to the sharp increase in rental rates caused by internal migration, the fastest-growing housing prices can be noted in the non-central areas of the city. Residents are increasingly focusing on these areas due to more affordable rental conditions.

For example, rental prices are rising faster in Beylikdüzü, Avcılar, Esenyurt, Başakşehir, Küçükçekçekmece, Bağcılar, Silivri, Pendik, Umraniye, Kartal and Tuzla than in the central districts. The demand in the mentioned districts is forecasted to grow further.

Assessment of the rental potential of real estate

To assess the prospects of renting housing, it is necessary to study the rental market structure in each quarter, evaluate the availability of public transport, potential tenants, and infrastructure opportunities.

Additionally, to verify information about management companies, you can use the Turkish online resource Sahibinden, which provides up-to-date information on rental prices in various neighborhoods and residential complexes.

Assessment of the feasibility of short-term rentals in Istanbul

Evaluating short-term rentals of hotel rooms or apartments is available through a a variety of online platforms such as Booking or Airbnb, depending on where your apartment hotel offers its services. Short-term rentals require a more in-depth understanding of your cost structure and usually associated with additional costs. It's important to consider not only the neighborhood, but also accessibility to public transportation.

Public transport in Istanbul

In Istanbul, the main public transport routes are the metrobuses with dedicated lanes, the comfortable high-speed Marmaray trains connecting the European and Asian parts of the city, as well as the rapidly developing metro system. In 2022, three new metro lines were opened, providing residents with convenient access to various areas of the city and promoting more efficient use of time.

Example of comparing neighborhoods

For example, if you choose the Shishli neighborhood, you may face the problem of a long cab ride to the highway during rush hours. While staying in neighboring Kagytkhan will allow you to take the metro bus to the highway in just 15 minutes. Shishli attracts businessmen and traders, but has a difficult terrain that makes it difficult to get around.

Rental management in Istanbul

Property management influences the choice of investment property and its profitability. In many modern residential complexes in Istanbul, management companies operate, offering a wide range of services in this area. Some complexes offer long-term contracts with guaranteed returns for several years ahead. The average return in 2022 is around 4% per year, taking into account fluctuations in the dollar exchange rate. Some partners may offer up to 6% per year, which is considered a high figure.

Service apartments in the post-pandemic period

Service apartments managed by hotel chains are particularly popular, providing high returns in convenient city areas, especially after adapting to the new conditions that arose after the pandemic, for long-term rentals.

Increasing income through short-term rentals in Istanbul

To increase your income, you might consider renting out your property in Istanbul for short-term rentals without a management company.and only use a realtor at the stage at the stage of occupancy. At the same time, it should be understood that the choice of objects for such rent is limited to hotel properties and service apartments. objects and service apartments. In addition, the lease of real estate in short-term rentals is possible only through a licensed property management company. However, locals often bypass this prohibition and rent out apartments in tourist areas on their own. apartments in tourist areas on their own, which can be very profitable.

Apartments in popular apart-hotels

We present to your attention apartments in apart-hotels with an annual yield of approximately 5-6% in areas such as Beyoğlu, Kağıthane, and other popular districts of Istanbul from well-known developers in the city.

Searching for a tenant and potential difficulties

How to find a tenant and what problems may arise?At first glance, settling Turkish tenants is easier, but verifying their ability to pay can be problematic. To To move in, all you need is a lease agreement, which can be executed without notarization. Often local Often local residents provide a work certificate to prove their ability to pay, and also provide a guarantor in case of late payment. in case of late payment. When you move in, you must pay a deposit of two months' rent and a down payment. and a down payment.

How to avoid eviction problems with tenants in Turkey?

Tenants in Turkey are protected by law even after the lease term has expired, which makes eviction a complicated process. Residents can abuse their rights to stay, and although the court will ultimately side with the owner, legal proceedings can drag on for many years and cause significant losses. Recovering compensation can also take a long time.

A reliable option is renting out housing to foreigners.

However, to avoid such situations, one can keep the utility bills in their name. A more reliable option is to rent out the property to foreigners who do not have Turkish citizenship but hold a residence permit based on a rental agreement. In case of a breach of contract, the owner can contact the immigration office and revoke the residence permit.

Interactive map for investors

Not all areas allow foreigners to obtain a residence permit based on a rental contract. However, an interactive map has been developed for investors, indicating the districts of Istanbul where this is possible. Experienced specialists recommend renting to foreigners, as they tend to adhere to the terms of the contract more responsibly.

Clarify the details with the landlord.

When searching for an apartment for a foreigner, it is advisable to clarify with the landlord whether they are willing to rent to a foreigner. Indicating this possibility in the advertisement and a slight increase in price can become a competitive advantage.

Should you rent out your property yourself or through a management company?

Before you rent your home, it is important to decide whether to rent it yourself or through a management company. If apartment is located in a hotel or aparthotel, the services of a management company are included in the package. However, if the apartment is located in an ordinary apartment building, it is possible to rent it independently.

Contact realtors to carry out the transaction.

When renting out to tenants in Istanbul, it is advisable to consult real estate agents, as they can assist in conducting the transaction. The main thing to remember is that adhering to all the nuances and rules when renting out property can save you from unpleasant situations in the future.

If you are considering renting out an apartment in Turkey

Take advantage of modern solutions, such as the popular portal sahibinden. After posting your ad, the first person to contact you will be a representative of the owner. If Turkish isn't your strong suit, it might be worth reaching out to professionals who specialize in working with foreigners.

Experts will assist in finding and vetting potential tenants

The conclusion of the deal, the transfer of keys, and the control over financial aspects. Typically, the tenant pays for the move-in services.

If there is a management company in your building

A contract can be concluded with her that will allow for the control of all processes: communication with tenants, monitoring payment for services and rent, resolving disputes, and maintaining the property's regulatory condition. For such services, a fee of 30-40% is usually charged.

In the absence of a management company

You can approach a third-party concierge service with a similar proposal.

When buying an apartment

It's important to connect utility services and re-register all accounts in your name. For this, you can use the services of management companies of large residential complexes, which will assist in the process of connecting utility services. It's also worth considering third-party concierge services, where you can save on these stages.

Registration of bank accounts

It is necessary to properly arrange bank accounts for managing utility payments, such as aidat (communal services) for the maintenance of the residential complex's infrastructure. Payments are usually made through a Turkish bank.

Furniture selection

The decision on furnishing depends on the target audience of the tenants. It's important to consider the preferences of local residents, expats, students, and temporary residents. Some complexes offer ready-made furnishing solutions, which is convenient for all parties involved.

Selecting a managing agent

The choice of an agent for property management and tenant search plays an important role. You can manage the rental yourself or entrust this task to specialists. Collaborating with a management company is often the optimal solution for owners from other countries.

Delegation of authority

Issuing a power of attorney to an agent or management company helps avoid rental downtime and loss of income. This is an important step for effective property management.

Tax obligations

It is important to consider tax obligations, even if you are not a tax resident of Turkey. The income tax on rental earnings depends on the total income for the year and must be paid through the government system or at the tax office.

Content of the article:

Olga, tell me what type of housing in Istanbul is in demand among renters?

How to determine the rental rate?

How to verify the promises of the management company?

How do you choose a neighborhood?

How does property management affect the choice of investment property and profitability?

How to choose a tenant and what common problems arise with them?

Should we submit it ourselves or with a tutor?

The apartment has been purchased. What’s next? Please explain step by step.

Besides management, what other costs are there?

What type of housing in Istanbul is in demand among renters?

• According to data from Betam University, the demand for housing in Istanbul significantly exceeds the supply, and apartments are rented out very quickly.
• Small studios and one-bedroom apartments are mostly rented for a long term (from six months to a year) and are in demand by visiting businessmen, employees of large companies and tourists. are in demand among visiting businessmen, employees of large companies and tourists.
• Foreign students also rent apartments for long-term stays.
• Large apartments with two and three bedrooms are in demand when families move, and this is quite a common situation in Istanbul.

How to determine the rental rate?

When choosing a rental rate, it's important to consider many factors, such as location, housing class, rental cost, etc.

For example, the demand for apartments in modern residential complexes in the Maslak area is very high, and a small apartment here can command a high rental price.

How to verify the promises of the management company?

Before signing the contract, be sure to research the reputation of the management company, its experience, and reviews from previous clients.

How do you choose a neighborhood?

Choosing a neighborhood depends on your investment goals and specific apartment search needs. The choice of neighborhood depends on many factors, such as the convenience of transportation infrastructure, proximity to work or school, availability of shops, parks and other infrastructure. or school, availability of stores, parks and other amenities.

How does property management affect the choice of investment property and profitability?

Managing rental properties plays a key role in selecting an investment property and can significantly impact profitability. It is important to choose a reliable management company or to develop the skills to manage rentals independently in order to maximize the effectiveness of the property.

How to choose a tenant and what common problems arise with them?

Defining the right tenant eliminates the risks of damage to the apartment or non-payment of rent. It is essential to establish the circle of tenants based on your needs in advance, as well as to check personal references and conduct certain background checks.

Should we rent it out ourselves or with a management company?

When renting out an apartment without the help of a management company, it is recommended to provide individual service to tenants as the organizing party. Unfortunately, this option is not always effective.

The apartment has been purchased. What’s next? Explain step by step.

• Establish the rental rate, transportation accessibility from the apartment to the city center, schools, stores, etc. etc.
• Create a profile of a potential tenant and describe the quality and condition requirements for the apartment.
• Make the necessary adjustments and publish an announcement for renting out the apartment.
• Provide individual service to tenants and manage the apartment.

Besides management, what other costs are there?

It is also necessary to allocate expenses for maintenance, repairs, taxes, etc.

Don't forget that the walls need to be painted after each tenant.

A normal return from long-term rental in Istanbul is considered to be 4% per year.

Therefore, investors need to implement projects with maximum efficiency and create conditions for long-term planning.