^
Back
to the
Top

Buying property in Turkey

Unique Property Blog

Back to the Blog Index
Back to the Unique HomePage

Buying Property in Turkey

Someone has left a message on one of my blogs informing me that, despite my reservations, he is planning to buy real estate in Turkey in a few weeks time, and he is dealing with ďa reliable companyĒ in London.

Let me start by saying that I am not the ultimate oracle, and there are other views besides my own, but I canít help feeling that investing in Turkey is rather foolish. It is some time since I lived in Turkey, and I suspect things have changed for the worse since I was there. However, let me give at least some reasons for my view. First, general considerations when buying in a foreign country.

If you are intending to live abroad, then renting is a great way to get started. It is always cheaper to rent than buy. I have dealt with this subject many times, but once again, here are the bones of the argument.

You presumably start with money in the bank. If you exchange that for a house, then you have the house but donít have the money. Alternatively, most people have a house in their home country which they wish to sell in order to buy abroad. If you have the house abroad you no longer have that money, so you canít use it to invest. 10% return on money invested is easily achievable. I proved that when I ran my investment bulletin called The Big Pension.

Each month I introduced my clients to safe investments that brought in a minimum of 10% + the inflation rate rounded up. Once you have emptied your piggy bank of, say, £100,000 to buy your home abroad you have effectively deprived yourself of at least a 10% return on those funds, the official term for that is the Opportunity Cost. In this instance we are talking about a loss of £10,000 income. Why not keep the money, invest it, and use the income to rent? That way you have the money and the home abroad.

Renting also lets you keep your options open. It also keeps you out of the foreign government system, and keeps you clear of local taxes, insurance and maintenance costs.

Second, by buying a home in another country you are investing in that country. Do you believe that investing in Turkey is going to be a good investment? You need to check out the currency, the economic base, the skills of the government, and all that goes with it.

Now letís look at some specifics in no particular order.

1    Can you speak the language? If not, how much English is spoken where you intend living? In Turkey they speak a language that is very different from European languages.

2    What about the culture? It is alien to Western Europe. There is the different religion which comes with a totally different legal code, and customs, and a rather disturbing attitude to women.

3    What about safety? Turkey is at war, which is hardly a helpful start. There is open war between Turks and Kurds which has been ongoing for decades. There is hostility towards neighbours both north and south. In the south there is raging civil war in Syria. In the north there are hostilities with Russia. In the west there is simmering distrust and bad feeling towards the eastern states of the EU. Internally there are the rumblings of civil war which have recently erupted into a situation where civil rights are almost non-existent. Hardly the prerequisites for starting a new life abroad.

4    What the above three elements mean is that in any conflict or argument or attempt to hang on to any personal or property rights, a foreigner will find he has no enforceable rights at all. Entering into such a situation is, in my opinion, sheer lunacy. If things go well, things will go well. If they do not go well, what is your redress? Your only redress is to attempt to sell. But if things go badly, there will be no-one wanting to buy. If you sell, will you be able to export your money? When I was there I could not export money.

5    Think about your means of support. You should aim to invest into the same currency as your principal income. There is a double bind here. If you invest when the currency is low, as it rises, so your effective income decreases. If the currency tanks, the value of your house tanks with it.

6    What is the resale market like? In normal tourist markets sales are notoriously slow. In a market such as Turkey, sales are likely to be almost non-existent, which is why your ever smiling salesman is so desperate to shift a property. He wants his commission. I, on the other hand, have no axe to grind.

The place to buy in Turkey is Istanbul, where there is a swift turnaround. In the tourist areas the turnaround is snail-paced. Istanbul is also a safer place to live.

What I would suggest to anyone thinking of buying in the Middle East, quite apart from the fact that this part of the world is a war zone, is to live there for six months before making any decision. I found the countryside an alarming place to live, whereas I quite liked life in Istanbul. You may find the opposite, but at least try it for six months first. I think you will be surprised.

Subscribe to our email alerts on the housing markets both in the UK and abroad.

HTML Comment Box is loading comments...
Podcasts:











Disclaimer     Privacy Policy