Calculating Return on Investment for Property in Turkey
Business is an important thing in every country. Real estate can also be a business in many cases. Turkey is a country that is very popular among tourists. Every year, a huge number of them gather there. That is why the real estate market is well developed there. People buy property in Turkey and then rent it out to travelers. This way, the property generates income. But many do not know the formula for calculating the profitability of a property. And that is the main thing in this kind of business.
Turkey – Advantages in Everything
Turkey is a country full of beautiful places. There are many landmarks here: this country has a rich history. This attracts tourists a great deal. But that's not all. Turkey is a country of three seas, and on the shores of each of them there are interesting towns and villages that have everything tourists need. Among other things, there are hospitals, public transport, shops, and so on. The main thing that attracts people to this country is clean water. It is everywhere, and not only in the seas (for example, there are beautiful lakes in the vicinity of Ankara). There are also beautiful mountains here, where some agencies organize excursions. Fans of active nightlife will also find something to do.
Transport infrastructure is also well developed. Good roads without potholes are laid everywhere – even near the Syrian border. Buses run to every point in the country. Railways are also well developed. Modern rolling stock, comfortable carriages, and numerous electric and diesel trains will take tourists anywhere. There are also domestic airlines connecting major cities within the country. International flights are well developed too. Tourists often use water transport to have a pleasant time. Every city has local buses and shared minibuses (called dolmuş in Turkey). Major cities also have LRT (light rail transit) and BRT (bus rapid transit) systems with modern, high-speed rolling stock.
Climate is another factor that affects Turkey's appeal. Summers here are warm but not hot, and winters are cool but not too cold (except in the mountain areas and the center of the country). There is almost no rain in summer. In winter it rains often near the sea, while the center of the country and the mountains see snow at that time.
Istanbul is one of the most popular cities on the shore of the Sea of Marmara. It is the largest city in Turkey, located in both Europe and Asia. It has wonderful beaches and many landmarks. It is the main city of the whole country, although it is not the capital. Bridges and tunnels connect the two shores of the Bosphorus Strait, which is the main and only waterway from the Black Sea to other seas. Ships passing through this strait are also of interest to many tourists.
The entire Antalya region is a popular destination in southern Turkey, on the Mediterranean coast. Clean beaches and crystal-clear water are the two factors that attract tourists here the most. The region includes well-known cities such as Antalya and Alanya. Antalya is a large city with a tram system, an airport, and well-developed infrastructure. The beaches are what attract most tourists here.
Alanya is a large city, though not as large as the region's capital. It is also popular for its beaches. There are other landmarks here as well, along with excursions into the mountains.
For those who are not drawn to such typical spots as Antalya and Alanya, there is another city on the Mediterranean coast – Kusadasi. Kusadasi is very different from other cities. It is much smaller. Its population is just over 100,000 people. The only connection to the nearest major city (Izmir) is by bus. This is another city known for its beaches. But it, too, has its own landmarks.
Living in Turkey is inexpensive. Housing is not expensive, and taxes are low. That is why it is pleasant not only to spend a vacation here, but also to stay for a long time. Anywhere in Turkey, property will generate income, which an investor can calculate using a special calculator.
Getting the Benefit from Real Estate
There are several ways to benefit from investment property. These include:
- Resale. Some investors buy property before it is built. In this case, residential complexes are only at the foundation-pit stage. At this stage, property costs much less than when it is already built. Some business owners then prefer to sell it to another buyer. That brings a benefit. How much – the seller should calculate using a return-on-investment calculator.
- Long-term rental. In this case, a person buys property in order to rent it out to tourists. Or not only to tourists, but also to people who want to live in Turkey for a long time. In this case, it is important not only to use the return-on-investment calculator to find out what benefit the investor gets. It is also important to calculate capital gains tax. Calculating capital gains tax matters because the investor needs to know how much they will lose on these very taxes when selling their investment property.
- Short-term rental. This is the most suitable option for those who rent out their property to tourists. Owners rent it out for a short term. At this point it is also important to calculate capital gains tax. This way the investor will know how much tax they will pay on their property in Turkey.
In any case, it is important to calculate the losses that result after paying taxes, using the property return-on-investment calculator. And that's not the only thing an investor can calculate with this tool. They can also work out the benefit and find out how much they will get from renting.
Steps for Calculating Rental Income Using the Investment Return Calculator
There are three options for calculating real estate investments. These include:
- Resale. If an investor wants to run the calculations for this case, they first need to enter the property price into the corresponding field. This is the price that shows how much the investor wants to get for their property. Then the user enters the down payment price. For the owner, this is usually 30% of the full price of the property. This is standard practice for all such deals. Even so, the investor must enter the down payment amount into the return-on-investment calculator themselves. It is not hard to work out using the percentage formula. The next step is to enter the monthly installment amount for the property into the investment calculator. This is the price the new buyer must pay for the property each month. It is smaller than the down payment price. The seller must also enter it into the investment calculator. The sale period is the last field in this tool that needs to be filled in. It shows how long it will take the investor and the buyer to complete the sale of the property. The investor also fills this in themselves. The tool then performs the calculations automatically. After all the operations are complete, the investor receives the information they need. And then they understand how much profit they will make from the property.
- Long-term rental. The investor must enter the apartment price into the calculator. This is the overall price of the property. Then the owner enters the cost of additional expenses into the tool. This includes buying furniture and other items. For a 1+1 property, this is a significant amount. The owner then enters the aidat price into the calculator. Aidat is the fee that covers gas, water, and other things needed for normal living in the property. Once all this is entered into the tool, the investor selects their property option and enters its monthly rental price into the calculator. After that, the owner chooses the term (in months) for which they will rent out the property. They then click the "Calculate" button, and the calculator performs all the calculations automatically. When running the calculations, the service accounts for a 15% rental fee. This is standard for Turkey.
- Short-term rental. The first three fields the investor needs to fill in on the calculator are the same as for long-term rental: property price, aidat, and additional expenses. Everything else in the service is different. The owner enters the daily rental rate and the number of days for the high, mid, and low seasons into the tool. The calculator then performs the calculations. And the owner gets the result. For short-term rental, the tax is higher – 25%.
Calculate your return on investment right now using the corresponding calculator.