Straight talk: how to make a killing in Istanbul

First of all, let's get one thing straight, says Property Turkey director Cameron Deggin.

"When we say, 'make a killing', we don't want people to think it's about putting US$100,000 into a property and doubling your money in a year."

Other agents might tell you something different, he says. "There's lots of packages telling you you'll make money with all sorts of gimmicks."

But Deggin knows from bitter experience that there's no such thing as easy money.

The city centre golden rule

"To make a killing in residential real estate, I recommend you stay central," he says.

Some will contradict Deggin's advice, he knows. "A lot of people will disagree with me. A lot of agents will say to their clients, 'don't listen to Cameron, he's got a vested interest'. But there's one thing that 99% of these guys cannot claim is to know, and that is the market."

Read more: Straight Talk with Cameron Deggin

In a fast-moving market, agents come and go. But Deggin, who has lived, worked and invested in Istanbul property for 15 years, has seen it all.

"I made a lot of mistakes. I lost a lot of money. However, I was lucky enough to make some very decent profits out of Istanbul real estate.

"One striking trend: where I made money was the city centre. I lost money in the outskirts."

Between 2007 and 2012, Deggin invested heavily in Istanbul's outskirts, he said. Development was rapid and concentrated in these peripheral areas, and Deggin was swept up in the excitement of these growing suburbs.

"But if you look at hard currency, none of them I made money in."

Small but perfectly formed investments

In 2012, Deggin changed tack, concentrating his investments in the central city. "Most of my investments have made very decent returns."

But not every central investment is a winner, he says.

"The [developments] where I was tempted by facilities, a big brand name, all singing all dancing, high end luxury... they didn't give the returns I was looking for."

He didn't make a loss, but his investments weren't as successful as they could have been, he says.

The investments that did work were properties in smaller buildings. "Those side street developments: small boutique, 20-30 units, no brand name but a nice enough design and underground carparking: those made money. Very good money."

Urban regeneration

Istanbul's housing stock is undergoing a rapid change, Deggin says. Older, less safe earthquake-prone buildings are making way for new developments. This is happening in some of the city's most desirable and expensive neighbourhoods, like Sisli. In these neighbourhoods, there is a lot of construction going on, with a la

rge proportion of properties sold before building is completed.

One of Deggin's recent success stories centres around this urban regeneration property.

He bought two units in a new building that replaced an old textile factory. In its place, a 33-unit development was built, with one, two, and three-bedroom apartments.

In 2019, Deggin bought a one-bedroom apartment for 450,000 lira (US$63,000) and a two-bedroom apartment for 700,000 lira ($99,000).

Today, these are worth $113,000 and $280,000 respectively, he says.

However, don't expect similar results unless you really know your stuff.

"There are very few residential investments in Istanbul that will give you that return. I don't want anyone walking away thinking that you'll double your money in two years, that's not going to happen."

The towering allure of branded residences

High-rise, high-spec branded residences are aggressively marketed to foreign buyers, Deggin says.

"Behind the Hilton there is a lovely, high end, high-spec development. Lots of facilities - concierge service,, gym, you name it, they have it. If you're looking for a luxury pad, that's the place."

As a luxury home, you can't fault it, Deggin says.

"But if you're looking for an investment,... none of these high-end, heavily branded developments are good investments. People won't like to hear that but this is straight talk, we'll tell it to you straight."

Savvy investors will notice that there is a higher proportion of foreigners living in these branded residences, Deggin says.

"This is because the branded residences are very visible, highly marketed."

In contrast, in the more boutique developments, there are hardly any foreign investors, simply because they don't know about them, he says.

It comes down to knowing the market, and having that inside knowledge of the city. "You need to know exactly where to invest. If you invest in these high branded places you will end up with a beautiful home. But if you're looking for a good return on investment, you ain't getting it."

Deggin knows some won't like what he has to say. But he prides himself on being straight up, and this transparency is an integral part of his company culture, he says.

"With all our YouTube episodes and our client advisors, we tell people what we think, straight up. Despite the fact that sometimes the advice we give to our clients goes against the grain of what we hear from the market. We risk being isolated, but we tell people what we think."