Posted on 20 May 2010
The industry press is picking up on reports of the impressive yields that can be made on buy to let property investments in Turkey. Turkish developers and realtors have been quoted as saying that rental yields are up to 6% per year and capital gains could be 10% per year.
The stories contain nothing new as far as we are concerned; in fact they are fairly conservative run of the mill predictions.
Turkish property is grossly undervalued, and tourism is a massive and growing industry. According to the reports, tourism to Turkey was over 27 million in 2009. This, they say represents a 2.8% increase on the 2008 figure, although some reports put visitor numbers at over 28 million in 2008.
The point being that Turkish tourism remained strong even during an international recession. With visitor numbers at 28million and rising, there is set to be a major shortfall in tourist accommodation in upcoming areas.
New resorts, hotels and hotel resorts are being built in this instance, but we also have the fact that more and more people are abandoning the package holiday in favour of their own, tailor-made solutions that they string together online; buying the cheapest flights, and the best accommodation for them.
Who hasn’t had a bad experience in a hotel that is nothing like the brochure, which was printed months before the crane rolled up outside to build the new pool, or whatever. With privately rented properties you are booking on a 1 to 1 basis with the owner, who you can even phone or email for current pictures, meaning the chances that you will arrive into something you did not expect minimal.
For these reasons, demand and occupancy for Turkish rental properties is solid and rising. In fact, in the top locations, occupancy is practically determined by the amount of usage that the owners want to have for themselves and their families. So, when you consider that a 2 bedroom apartment in any of those locations will cost no more than £60,000 then you can see why 6% rental yield is a conservative prediction.