Keith’s weekly property news October 2-2022
FAQ and how to work with MyBricks efficiently.
Instead of giving a few comments on the general state of the property market, this week I will write Part 1 of 2 of an FAQ designed to help you with all aspects of property acquisition in Turkey and much else besides, in addition to giving you some ideas how you can maximize your chances of finding a solid investment with MyBricks.
First of all, I have said it many times, “the squeaky wheel gets the grease”. By this I mean, if you are really interested to get a property do not be afraid to make some noise. Let me know you are there and ready to go. If your time frame is short, let me know and we will do our best. We do not operate like other agencies who have a cookie cutter approach and hundreds, if not thousands, of properties ready to go and on offer. We actually conduct a search for your property. The downside of this is that it usually involves your active participation. We can find property quickly, but our average client probably spends at least a month with us, though there is no one size fits all. Of course, there is also a big difference between online buyers and people who are in Turkey. If you are planning a trip, I believe the absolute minimum needed on the ground would be 5 days. If you are planning on buying multiple properties for CBI, more time would be prudent.
What kinds of properties do we sell?
We selectively sell new build projects, but more so secondary market properties. If we see a new build project, whose inherent value we can be pretty sure of, we have no issue endorsing those, and have done so many times in the past. What we do not do is engage in much speculation and buy into the hype. Just because so and so says Esenler is the new place, we do not go running off there trying to find a new project. As part of my job, I regularly visit new build projects. If I like what I see, I dig a bit deeper and if all looks good, I then propose it to my clients. Property Turkey has been pumping Fikirtepe. When you scratch below what they offer, you see it is a fairly standard (not luxury) property in the 3 to 3.5K per sqm range. That does not seem like great value. In cases like this, we would expect to buy in at a lower price. After all, at what price could Fikirtepe hit in the next few years. It would seem 4K is somewhat of a ceiling, but time will tell and I could be wrong.
We mostly work in the downtown area, but spread over 7 or 8 municipalities, so that is pretty considerable. We have a fairly in depth knowledge of Izmir and surrounds and a pretty good understanding of the fundamentals that underpin investment in the main coastal areas, most of which we are currently avoiding, at least for this year (due to the over-pricing phenomenon that has become pervasive in Bodrum, Antalya and so on).
FAQ PART !
What do I need in order to purchase a property in Turkey?
At minimum, you will likely need a POA with a local lawyer.
-a Tax ID.
-A bank account.
The lawyer can get you both of these with a POA. For the contents of the POA and how you can acquire from abroad contact your legal representative.
What services does MYBricks provide?
Really everything that you need related to purchasing property in Istanbul.
-Referrals to lawyers.
And much more
How can I get the most out of MyBricks experience?
– For sure, one of the best things you can do is to attend the bi-monthly zoom sessions. These are invaluable sources of information.
– Starting again this week, Nalan will be hosting property management zoom sessions on Thursdays (will be announced on the whatsapp group).
– Join the renovation and the normal whatsapp group to receive property offer updates and much more.
– Be in regular contact with me or someone from my team. If your purchase is imminent, I can create a group with you, me and 1 of my staff to start evaluating options.
– Schedule a brief (15-20 min) introductory zoom session with me.
How can I retain the services of a lawyer?
We have several strong, tried and true lawyers that we work with, who are all expert in citizenship by investment, as well as real estate generally. Alternatively, you can always ask group members for their suggestions.
How long is the typical closing process and what does it entail?
Closing can be anywhere from 5 days to 1 month, with the average around 15 days. Very fast by Western standards. However, with the currency volatility, this is a positive. A very extended closing could provide very different set of conditions. As I said, 2 to 3 weeks is the norm. This allows time to:
-get the mandatory property valuation executed.
-transfer your funds to your Turkish bank and get the exchange certificate (mandatory for foreigners)
-have your lawyer secure a date at the Land Registry.
What are the additional costs when purchasing a property in Turkey?
The main additional cost is the Stamp Duty. Technically, it is 2% of the sales price each for the buyer and the seller. However, in reality, it is often part of the negotiation and sometimes the seller will load the stamp duty onto the buyer. This is just local practice. No need to get too concerned about that. Just look at the price as a whole…is it fair? Is it in line with market, or hopefully below?
There is also the real estate agent commission, which is between 2.5 to 3%. On new build projects, the commission is embedded in the price. Many agencies are getting huge commissions from projects with inflated prices. Buyer beware. It is always a huge red flag when some developer offers outrageous commissions. Also, developers, or agencies that operate abroad often charge very high rates, embedded in overall cost. Dubai comes to mind. Avoid buying Turkish property from overseas agents. You are definitely going to be paying more than you should.
How long does a typical full renovation take?
Last year, we were absolutely inundated with renovations and we also did renovations where the envelope was definitely being pushed in terms of the scope and bravery of the work. So some of our times were extended. However, under normal circumstances, such as now, 3 to 4 months is ample time to complete a renovation of a straight-forward A to Z project. If there are layers of complexity – i.e. performing works, often additional and value adding that require some cooperation from the authorities – it can extend the time frame.
How much does it cost for renovation?
Due to the high inflationary environment, I have stopped giving rough numbers. You can consult with our team to get some rough figures. Suffice it to say, it is still a bargain by Western standards.
How many staff are on the MyBricks team?
We typically have anywhere from 8 to 10 full time staff, including for renovation, sales, rental, property management etc. A lot more if you consider the contractors who pretty much work full time for us.
Apart from the contractors, most staff speak English (except me on a bad day). Most of the staff is Turkish. We also have some power house freelancers, such as Arman, The Tehran Tiger.
How long have I been in real estate in Istanbul?
I have been operating my own real estate agency in Istanbul since 2003, originally as Beyoglu Apartments.
What is a decent budget for Istanbul? For Izmir?
I think nowadays, at least 125K USD for Istanbul is a good starting point. 100K USD and up is okay for Izmir.
I think if your budget is 50K or 75 K USD, it does not make much sense to invest internationally. Your investment might get diluted by unknown costs. You would probably be better off focussing on the local market where you live. Keep in mind also that Istanbul is a major global city and 50K is only likely to buy you a property that will come with headaches.
How can I mitigate currency risk?
Well, the truth is, of course you cannot entirely limit the risk. However, keep in mind that even during last years currency crisis, the value of properties went up, even in USD terms!!!! And, over time, Turkish real estate seems to follow a consistent path. There are some valleys and hills, but in my time here, I have never actually seen a market crash. The main reason for this is this is not a market where owners are over-leveraged, so you do not suddenly have thousands of sellers who absolutely need to sell.
Buy in at a sensible price, sell when the timing looks good. That is a pretty formidable defence right there alone, if you get that right.
What are the best areas to invest in?
This is a question no one can answer. Right now, we see “pockets of value”
They come up regularly and are almost independent of location. But when you see it, you know it.
However, if you were to pin me down, I would probably say…quite a few places in Izmir. Still some areas in Sisli, a spot or two on The Asian Side, Zeytinburnu or along the Golden Horn, if you can find a decent deal. And lots of other neighborhoods if you can get a decent price vis a vis the market.
FAQ PART 2 TBC on zoom session October 17
Properties will be distributed in meeting. If you like, PM me and I will send them to you directly.
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