The developer of any project
is always exposed to risk. They want to cap
this risk as quickly as possible and limit
bank loans and other debts. They do this by
selling units off-plan at prices below the
market value of completed units.
Below are some commonly ask questions about offplan
property investment. To see the answer to
one question just click the question, to see
all tick the "view all answers" box.
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Q.
|
How has the property market performed over
recently |
|
A. |
Turkish property prices having been
increasing over the last fews.
As Turkey is still not in the European
Union prices for comparable properties on
the Mediterranean are still significantly
lower on a like for like basis.
Turkish EU membership talks were launched
in October 2005. Accession negotiations are
expected to take about 10 years.
|
|
Q.
|
How
will
the
property
market
perform
in
the
future? |
|
A. |
No-one has a crystal ball - and past
history is not always an indication of
future performance - however the following
factors point to a continuing strong market.
If and when Turkey fulfils it obligations to
qualify for EU membership then property
prices will likely soar.
|
|
Q.
|
What
are
the
key factors to consider when investing in property? |
|
A. |
-
Location
-
Does the area have strong facilities (close to travel links,
bars/restaurants, shops, schools)
-
How has the property sale and rental market performed historically
in that area
-
Is anything happening in the area that could change this -
regeneration, new employment opportunities
-
The Quality and Desirability of the Development Itself
-
The Quality and Desirability of the particular unit you are buying
-
Developers Credentials
-
Can you manage the risks - how likely is it that....../ what would
happen if.....
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Mortgage rates rise
-
There is no tenant for the property
-
The build is delayed
-
The local employment situation changes
-
The capital increase on the property is not as substantial as
expected
-
Something goes wrong in the property while it is rented to a tenant
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|
Q.
|
How
can judge
alternative property investments
be
assessed? |
|
A. |
This largely gets down to your own
investment criteria. At present rental
returns are not great given the relatively
low cost of hotels in the main resort areas.
The main expense in going to Turkey is the
cost of flights.
Most investors will be relying on capital
gains as the primary return on their
investments.
|
|
Q.
|
How to
do I Finance a Property Purchase? |
|
A. |
Turkish mortgages are available from some
developers however there are not many of
this available at present.
Some form of cash
deposit will be required when you purchase a
property and there are also costs associated
with buying a property including purchase
tax ~3% of sale agreement price, property
tax ~ 0.5% of sale agreement price, Legal
fees 1-1.25% of sale agreement price,
government tax ~ £100, water & electricity
connect fee ~ £250,telephone: Connection fee
£15 approx. and notary charges ~ £100 - £250.
As most will not have the cash to pay for
the whole of the property there are various
mortgage alternatives for financing the
balance including:
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|
Q.
|
What are the costs associated with buying an investment property? |
|
A. |
The
main
a
costs
associated
with
the
buying
of
the
property
are:
- Purchase tax ~3% of sale agreement price
- Property tax ~ 0.5% of sale agreement price
- Legal fees 1-1.25% of sale agreement price
- Government tax ~ £100
- Water & electricity connect fee ~ £250
- Telephone: Connection fee £15 approx.
- Notary charges ~ £100 - £250
|
|
Q.
|
What
are
the
costs
associated
with
running
a property? |
|
A. |
The
operating
costs
associated
with
running
a
property are:
- Water: 1 - 20 m³ 0,32 €21- 40 m³ 0,48 € above 40 m³ 0,87 €
- Electricity: Time share : 17/22 22/06 06/17. 0,11 €/kWh , 0,03 €/kWh . 0,06 €/kWh
- Refuse: Every year approx. £10
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