3 Very Important Considerations when Buying an Off Plan Apartment in Turkey
There are many reasons to consider investing in Turkey at present. Not least because despite all the bad press about Turkey (and it really is a press issue) properties are still increasing in value.
February saw a 15.8% increase in residential sales to foreigners. There may be a slow down in sales to foreigners in the western world but Turkey is considered a very safe haven for those with enough savings to start a new life away away from extremely dangerous environments in the East.
Away from the Syrian border towns life in Turkey remains unchanged. The peaceful, tolerant and welcoming culture of the Turkish remains as attractive to foreigners as ever. The weather is the same, the coast is the same, the pace of life is unchanged and there are opportunities on the horizon to make re-location even more attractive.
You can still buy property relatively cheaply here and there are significant gains for buying off plan – but there are a number of things to remember when you start to look for projects to invest in.
- The Company’s Build Record and History of Service to Previous Clients
Buy from a construction company that is well established, has a long, ongoing relationship with its investors in the local area and is financially secure enough to continue its activity even when there is a downturn. Buying off plan from a company with glossy brochures and large impressive displays and sale persons in a property exhibition is no guarantee of security. You need to either do your own research on a company – or ask someone independent to do research on your behalf. There are always horror stories in every country regarding property investment but more often than not a little common sense applied before money changes hands would prevent ever the worst catastrophe.
- Can this Company complete the build even if no-one else buys off plan?
This is very important for the following reason. Take this example which is not an unusual scenario. You find a project of 40 apartments which look like excellent value for money and good investment potential and say, you are one of the first five investors for this new project but unknown to you the company needs to sell 20 apartment to have enough money to finish the project. What happens if there is a downturn in the economy or the company simply fails to sell the required 20 apartments?
By the time they find out there is a problem they will have taken your money and put it into the build – but the overall available building funds are insufficient to complete the build. The building work then has to stop maybe at the concrete stage until they sell more and your apartment cannot be completed. Worse still – if they have also borrowed money for the land or the build the repayments still have to be made and you the company you have invested in becomes insolvent. You stand to lose everything – your apartment and your money.
So how can you know if the company needs to sell a percentage of the apartments to complete the build? Well there are some very good indicators for you to be aware of.
If the company tries to take a very significant deposit from you before they even start the build, and then insists on a very strict payment plan with only a small percentage of the overall funds held back for the end of the build means – you can usually deduce that they are depending on using your money from sales of apartments to complete their build.
However, if you choose wisely you can choose a company which only builds when they have raised sufficient funds from the last project i.e. the last project funds the new – not the early purchasers fund their own build. These companies are less interested in taking your money as early as possible as in ensuring you are confident and committed to the project and will want to, and can complete the purchase once the building is complete. They are likely to agree penalty clauses if they fail to complete on time and other guarantees to ensure that your money is secure.
There are many excellent companies in Turkey. Their building standards and ethics match the best in the world but don’t rush you decision because of company hype. It could be the most expensive mistake of your life.
- Use a local Solicitor to check that the Builder owns the land and has all the necessary permissions to complete the build.
Independent legal advice in Turkey is not expensive and in the long run you could save yourself thousands by making sure that you have chosen to invest in a project which has legitimate building permission and can complete through to the ISKAN stage, when the building project is checked by the council/municipality which inspect the construction plans and building licence and make sure everything is according to those plans. After this individual apartments owners can registered for electricity and water supplies. An apartment without ISKAN is almost impossible to be sold for its market value if at all as the absence indicates some legal problem with the build.
One hour with a good solicitor can be enormously helpful and protect you from pitfalls that can occur with less reputable companies.
There are some excellent companies in Turkey. Their building standards and ethics match the best in the world. Don’t rush you decision because of company hype especially if they tell you not to seek legal advice as you would be wasting your money.
It could be the most expensive mistake of your life.
- Always put Quality over Quantity and remember Cheap is not always Cheerful in the long run.
There are always companies that advertise the cheapest apartments online. There is usually only one loss leader apartment in the block. A tiny studio, north facing and overlooked by other apartments. This entices you in and you end up spending more. If we see large apartment blocks selling for very cheap prices we are always suspicious. To make such savings you need to cut corners. If corners are cut in the unseen parts of the building i.e. foundations, metal work, concrete ….. this is not good news and can have significant implications for your investment money in the future. Local Knowledge is invaluable which is why we spend so much time researching the companies we work with and choosing only a few to promote.
Dream Villas in Turkey April 2016
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