Buy-to-let in Turkey: get the lowdown on buying a Turkish rental property
The prospect of rental income is a big draw to investors buying property in Turkey. In fact, numbers from Turkey’s statistical institute tells us the number of foreign investors has risen by 70% since 2013.
As well as excellent capital gains, investors in Turkey are attracted by the prospect of earning steady rental income in a country where renting is becoming more and more popular among the following groups:
- Young professionals: the last decade has seen a huge societal shift in Turkey. The country’s population is young, and increasingly educated and solvent. Young workers are moving to the cities in large numbers, seeking decent accommodation in and around larger cities - like Istanbul and Antalya.
- Holidaymakers and travellers: Turkey’s tourist share has never been greater. With 30 million annual visitors, it’s not surprising many of them will be seeking out self-catering accommodation.
- Luxury travellers: This demographic's looking for something a little special, and are first in line for luxury villas in Turkey. Seeking sea view properties, incredible design and total privacy, these renters are willing to pay over the odds for that special apartment or villa.
So, how do you rent out your Turkish villa or apartment?
Finding the right rental property
If your rental property is in a poor location, it’ll be difficult to conjure tenants out of the air. You’ll need to ascertain whether the area is good for rentals before you buy. If it’s a year-round buy-to-let, how are the links to the city? How is the public transport? What are the local facilities like? Is the neighbourhood safe? How easy is it to get to the airport?
A holiday let has different considerations. How close is your property to the beach? How good is the public transport? How fast and how much is it to get a taxi to the centre? What’s the complex/facilities like - good for children? Are there tourist attractions nearby? Are there local markets nearby?
Where and how to market your property
You can market your rental property through a company, but this will eat into your profits. These days, it’s very easy to market your own rental. You’ll need to put in the legwork, but the savings are worth it. Here are a few suggestions to get you started:
- Word of mouth advertising through friends and families: post your holiday home on Facebook. Instagram a few pics of the view from the terrace. You’ll be surprised at how many people bite - but don’t be surprised if they ask for special rates!
- Online: use airbnb.com, Owners Direct, Holiday Lettings and VRBO. Make sure your photos and descriptions are tip top.
- Make your own website and Facebook page: and once you’ve done so you can share them on Facebook community and expat groups.
- Look locally: advertise in your local paper, pop a notice up on the supermarket, pub and community bulletin boards.
- Display a sign: put a sign up on your rental property with a number to contact.
Standing out from the crowd
While the Turkish holiday rental market is strong, it doesn’t hurt to have a unique selling point. Let’s say your rental property is in a large complex and there are other apartments up for summer rental. Do you undercut them, thus making yourself the most appealing prospect? In short: no. Don’t undersell yourself: you will have expenses and costs associated with your home that will need to be met.
Here’s what you can do to make your holiday home stand out
- Take decent photos: Holidaymakers rely heavily on pictures, often making split decisions on their potential holiday destinations based on tiny thumbnail photos. Make sure your photos - especially this thumbnail image - are simply superb. Change the pictures every now and again.
- Excellent marketing: Make sure your description is spot on, with excellent spelling, grammar and formatting. It makes it easier to read - and you sound more professional, too.
- Check out the competition: Look at the most successful rentals in your area and see how they’re doing it. Don’t copy - individuality will serve you well in a crowded market. Just build on whatever’s working for them.
- Be an individual: Not everyone can offer lovely houseboats or quirky tree-top homes. But even a cookie-cutter apartment can have its own special charm if you’re willing to put some thought and effort into it. Consider lighting, pictures and colour schemes - small touches that will stand out in photos.
- Be flexible: Many holiday rentals have a minimum time stipulation, thinking that it’s not worth cleaning and changing the beds for one, two, or three-night rentals. This is a mistake. Don’t restrict yourself to week-long rentals with a Saturday changeover day - especially if your property is near major tourist attractions. Turkey’s a large country and many travellers are going from place-to-place and won’t want to spend a week in a holiday home. As long as you charge a cleaning fee for each stay your only cost will be the meet-and-greet/changeover.
- Have the right attitude: Furnish your rental with the best you can afford - not the stuff from your regular home you don’t use anymore. As well as allowing you to charge a decent price, your tenants will feel comfortable and will be more likely to review you well - or even return. Cheap furniture is a false economy. It will quickly wear and make your rental look shabby.
Tax and other costs
Landlords need to ensure they pay the right amount of tax. The amount varies depending on how much you earn but starts at around 15%. You can deduct expenses on your annual tax return. A number of homeowners choose to employ an accountant - this service is relatively low cost in Turkey. Ask around locally for a decent accountant.
You will also need to pay the inevitable management costs on your property. We’ve broken down all the costs in our article on property maintenance fees and costs in Turkey.
Changes in the law affecting short-term rentals
A recent law change (October 2016) is making things slightly more difficult for rental home owners. With an amendment to the Identity Decleration Law, landlords who let their properties short term OR have people to stay now need to register each booking and occupant with the authorities. Although it’s bid to prevent crime, the new legislation will also mean an extra measure for the authorities to ensure property owners are paying tax. Failure to abide with this legislation will mean penalties for property owners.
If you own a home and intend to rent it out or have guests staying for a while, you'll need to visit your local gendarme headquarters with photocopies and originals of your ID card/residency permit/passport and your TAPU. The official will explain the legislation and show you how to use the Identity Declaration System - the free software you'll be required to use each time you have a new guest. The authorised person or owner can imput the data online, even from abroad.
The law requires that each owner must comply with the new system or risk fines of TL10,000 (US$2800).
If you’re not going to be physically present in Turkey, it will be a good idea to hire a property management company to take care of everything from paperwork to dealing directly with tenants, cleaners and repairs.
The advantages of using a property manager in Turkey are
- The security of having someone close by to keep an eye on your property
- They speak the language and know the local culture
- Once you have a trusted property manager, you can delegate responsibility with complete peace of mind.
Management companies generally charge the equivalent of a month’s rental. If your home is rented only for six months of the year, for example, you will owe one twelfth of that amount.
Property Turkey’s concierge service takes the pain out of property management. After guiding you through the purchase process, we'll find reliable tenants, ensuring all relevant checks are undertaken and act as a point of contact for your tenants and overseeing payments. Get in touch if you'd like to know more.
Turkey's best property rental markets
While the rental market is strong all around the country, with high demand in all major finance and tourism destinations, it’s certainly not equal in every part of Turkey. Here's our pick of the best places for buy-to-let potential.
Best for: buy-to-let investment
Turkey’s largest city is experiencing unparalleled growth, with soaring property prices and rents that show no sign of slowing. However, Istanbul’s popularity shows no sign of waning, and hundreds of thousands of people are moving to the city each year - among them, large numbers of professionals seeking commutable property within reach of their jobs in central Istanbul or Atasehir, the new financial district.
Earning potential: You can expect to earn an annual rental income of around 5 - 7% (of property value) in Istanbul.
Top tips: head to areas with quality developments that stand out in a crowded market, for example, projects in Atasehir or Media Highway. That way, you’ll be assured of a favourable exit strategy - and quality long-term tenants.
Best for: high-calibre holiday rentals
This pretty Mediterranean town filled with whitewashed houses that spill down the hillside to the ancient harbour is perennially popular with holidaymakers. However, the long drive from the airport (about 1.5 hours) means Kalkan has become an exclusive spot, where the rich and very rich come to chill out. Private luxurious properties in Kalkan are in especially high demand
Earning potential: You can earn around 7% in Kalkan annually by renting your villa out over the summer months. Clever marketing can push that figure up even higher.
Top tips: If you want to stand out from the crowd in Kalkan and push your earning potentials higher, you’ll need to choose a property close to the harbour, and the best quality your money can buy. If you don’t have the budget for Kalkan, move onto Fethiye.
Best for: steady year-round income from young professionals
Antalya’s population and fortunes have risen dramatically in the past decade, making the southern city one of the most prosperous on the Mediterranean. Young professionals moving to Antalya are queueing up to rent modern apartments, which is great news for investors. Due to geographical limitations, the city cannot grow much more, pushing prices and rents up.
Earning potential: Expect to earn 5-7% annual rental income on apartments or villas in Antalya.
Top tips: Head to Konyaalti or Lara Beach. These coastal areas have lots going on and great links to the city, making them popular with city workers.
Best for: family holiday rental
Sunny, laidback Fethiye is a holiday maker’s dream. The accessible region’s filled with sandy beaches, historical sites and beautiful scenery. It’s popular with families and couples wanting a chilled-out holiday near beach hotspots, especially near Oludeniz Beach: nearby houses for sale Ovacik are perennially popular with holiday makers.
Earning potential: Expect to earn around 5-6% rental income in Fethiye - that includes taking time for your own family holiday, too.
Top tips: Popular rental spots include family-friendly Ovacik, near Oludeniz Beach; Calis Beach; party town Hisaronu and Fethiye Centre. Each of these places has great travel links and plenty to do within easy reach. Uzumlu, which is slightly inland, is less popular as it's not near the beach but prices are lower there if you're looking for a bargain property.
Best for: Diverse rental potential
Bodrum is Turkey’s original tourist destination. Today, the small but perfectly formed peninsula is still incredibly popular. Bodrum’s popularity is multi-faceted: it’s not just sun-seeking holidaymakers flocking to the peninsula, but also world-famous celebrities, Turkish politicians as well as expats and Turkish city workers working remotely. Bodrum’s property prices are rising steadily along with its reputation, visitor numbers and economy grows.
Earning potential: You can earn around 5-6% rental income in Bodrum, more with the combination of careful marketing and a truly superb property.
Top tips: The peninsula’s towns are as diverse as they are charming. Carefully research your area to decide where your money will best be spent. For example: Bodrum Town or Yalikavak are the busiest centres, where rental income might be earned for longer periods than quieter Gumsuluk or Torba.
Questions, comments? Contact us to find out more about finding a rental property in Turkey.