Real estate investment in Turkey is considered one of the best and more safe investment options, Real estate investment in Turkey mainly consists of residential and commercial properties, we can say that the real estate investment sector in Turkey is one of the most important sectors that contributed in supporting the Turkish Economy effectively, which recently reached the 18th rank globally in the list of the world’s most powerful economies.
What Is a Commercial Property?
By commercial property we mean buildings and land that its main purpose is to generate profit, either through rental profit or commercial usage of the property, as commercial property can include offices, retail shops, hotels, industrial warehouses, and residential buildings that contains many units.
What Is a Residential Property?
Residential properties are the properties that intended for residential and settlement usage, including family houses, residential units and apartments, these residential properties are owned by individuals or families living within the property or giving it for rental to others, the aim of owning the property can be to generate rental profits or for long term investment.
Is the Price of Commercial Properties Different from Residential Properties?
Commercial properties’ price can have a big difference from residential properties, as each property has different purposes and properties, but generally commercial properties are more expensive that residential properties, also, the commercial real estate can be bought for investment purpose hoping its price would rise.
Does the Return on Investment Differ Between Residential and Commercial Real Estate?
Return on investment from commercial and residential real estate is widely different, as commercial properties offers a higher return on investment than residential properties, but, economic downturns and changes in market conditions can make residential real estate a more stable investment as people always need a place to live.
Advantages of Residential Properties:
1. Residential real estate is at lower cost than commercial real estate.
2. Investment in this type of real estate does not stop as people always looking for a place to live, cash flow in this type of properties might be lower compared to commercial properties but its steady.
3. The property will never be empty even if there’s bad economic conditions because of the high interest in residential real estate in Turkey.
4. How easy it is to find a tenant in residential real estate, because people are always looking for a house or an apartment.
5. The ease of resell of residential properties especially if it was located in an attractive area and close to vital locations and public services.
Disadvantages of Residential Properties:
1. If you want to invest in the field of residential real estate, then you will have to deal directly with the tenants and find solutions to their problems yourself, because contracting with a real estate manager may cost you more than the rental fees.
2. You may face problems such as not paying the rent on time or not leaving the house when the lease term ends.
3. Some tenants may cause damages to the property, which will cost you the repair and maintenance of the property after the tenants leave and before renting it to another person, and thus payments for maintenance.
Advantages of Commercial Properties:
1. Making long term rental contracts up to 6 years, this feature is unlikely in residential properties, as companies does not change their address often which makes them obligated to long term rental contracts.
2. Higher return profit than residential properties.
3. During huge investments, specialized real estate companies can help, this is an important feature that makes the property owner comfortable and do not have to deal with the tenant directly as it is the job for the real estate company to collecting monthly rental fees and following up the payment of bills and revenues on an ongoing basis.
4. Commercial real estate owners can be eligible for tax benefits such as depreciation and taxes in parallel with capital improvement.
5. Commercial properties can be used for many purposes, including retail shops, and industrial usages, this diversity offers some kind of safety in case one sector of the market is weak.
Disadvantages of Commercial Properties:
1. Investing in commercial real estate requires a large amount of money because it costs more.
2. Sometimes it is hard to find tenants and those interested in the property.
3. Commercial real estate bills are higher than residential real estate, such as electricity, water, and maintenance bills.
4. The risk of prolonged vacancy or tenant turnover negatively affects cash flow and profitability.
Finally, whatever your goal is from real estate ownership in Turkey , do not hesitate to contact Horizon Turk Real Estate, Because our activity is distributed over a wide area of important projects in Turkey, and we have a real ability to provide distinctive ownership opportunities at reasonable prices in order to achieve for our customers a distinguished investment experience that benefits you in the shortest and easiest way.
