Renting your Turkish property
Many people buying in Turkey want to rent their property out for part of the year. The promise of rental returns on top of strong capital growth has attracted investors; while those buying primarily for their own use often decide that a few weeks rental can cover the cost of maintaining their property. The Turkish holiday rental market has huge potential with the country expecting 24 million foreign tourists – of whom well over 1 million will be British – this year.
“The start of low-cost flights into the Turkish resorts, with Easyjet now flying Gatwick-Dalaman four times a week, will be a huge boost to the fledgling holiday lettings market,” explains Dominic Whiting, editor of the Buying in Turkey guide. “However, at present, it is much less developed than in countries like France or Spain and property buyers should have lower expectations.”
Property buyers should also bear in mind that rapid development has created a large pool of rental accommodation, with an over-supply in some of the Turkish resorts.
“This doesn’t mean it isn’t possible to earn a good income from rental – easily enough to cover maintenance costs and bills. But it makes it very important to choose the right kind of property in a good location, if rental is a primary concern,” says Dominic Whiting, editor of the Buying in Turkey guide. “It is also unwise to rely on rental income to finance your purchase, no matter what the estate agent promises!”
The rental season in the coastal resorts is May-October, with July and August the busiest months. In resorts such as Alanya, Altinkum and Kusadasi, which are popular with families, apartments and small villas on complexes are the easiest type of property to rent. While in the more upmarket resorts, such as Kalkan and Kas, which are popular with independent travellers, large villas with pools offer the best rental returns. The Aegean resort of Cesme, which is very popular with Turkish holidaymakers from the major cities, has a buoyant rental market in summer with gross yields of 5-6% possible. However, serious buy-to-let investors should look to the main Turkish cities where the rental market is year-round and solid yields can be achieved.
Many Turkish developers provide management services, including cleaning, gardening, maintenance and welcome baskets, for a set annual fee or a commission of 15-20% of the rental income. Good management is essential, particularly if you are not around yourself. Marketing your property is also important. Some specialist travel companies offer contracts for suitable properties in areas like Kalkan and Bodrum. But most owners choose to advertise in the local press or on the internet, while others rely on friends and family to spread the word.
Guaranteed rental schemes
Rental guarantees are sometimes offered by estate agents or developers in Turkey. Simply put, these guarantees are a commitment to return a percentage of the purchase cost of a property to the buyer each year for a fixed term. Ostensibly, the developer recoups this money by renting out the property. This sounds an attractive proposition, but rental guarantees should be examined closely.
Firstly, unscrupulous companies may simply be inflating the sale price of the property in order to cover the rental. Buyers should shop around carefully to see the cost of comparable properties in the same area. Find out whether the developer has an agreement in place with a travel company or lettings agent. If not, then how do they plan to find tenants and ultimately pay the guarantee? Examine the fine print of your contract to see who is actually guaranteeing you the money.
´Rental guarantees are marketed with alarming regularity,” says Paul Owen, CEO of the Association of International Property Professionals. “The simple rule is: if it is not in the contract, it´s not guaranteed. Potential rental incomes are often re-classified by salesmen as ´guaranteed´, though this is never in writing. Check the contract and recognise that no mention means no guarantee. Even rental guarantees in the contract should be scrutinised by an expert. Make sure you hire a lawyer to check them before you sign anything.”
For more information about Turkish property download a free copy of the Buying in Turkey guide at www.buyingin.co.uk or call a property adviser on 0845 351 3551.
Buying in Turkey: A Complete Property Buyer’s Guide to Turkey
2007/8 edition
Edited by Dominic Whiting
Edition 3, 140 Pages, RRP £9.95
Published 15 July, 2007
ISBN: 978-0-9550890-5-3