How to Rent Your Real Estate in Turkey?
Turkey has emerged as an attractive real estate destination in recent years due to the depreciation of the Turkish lira and favorable incentives for investors, especially in the real estate market.
Whether you want to buy for investment or rent your property as a vacation house or year-round for a fixed income, here is what you need to know.
If you are planning to lease your property on a long-term basis and are not familiar with Turkish laws or the language, it may be best to consult a lawyer to assist you in every step of the process, especially while drafting a contract.
Most importantly, do not accept verbal agreements as guarantors of regular rental payments. You may not want to write a contract and save some money by not hiring a lawyer. But if you have a squatter situation, you will have a hard time firing them without legal support.
Also, after you finalize the contract, be sure to have it notarized so that both parties know and understand their responsibilities.
When it comes to short-term rentals, you need to be aware of the latest amendment to the Identity Declaration Law. The 2016 amendment to the law states that if the property is marketed as a vacation rental, the landlord must register the names of their tenants in the government's GIYKIMBIL system (Temporary Residence Identification System - Identity System for Temporary Residences).
Warning: It doesn't matter if your tenants will stay even for one or two nights; You are legally obliged to enter their names into the system. Failure to notify building residents will result in a daily fine of 700 TL. The gendarmerie will check the history of the occupants after registration. This measure was introduced to combat terrorist activities.
What Are the Advantages of Buying a Rental Property in Turkey?
Turkey has always been a country that attracts foreign investors with its natural and cultural richness, geopolitical location, developed transportation network, developed tourism, trade, entertainment life, airports, roads, and bridges. With its stable and growing economy, Turkey has always offered new opportunities to investors and is still working to increase and maintain the value of investments.
The real estate sector in Turkey has managed to become one of the sectors that continues to grow despite economic, social, and political problems. Let's take a look at the advantages that await foreigners who buy a house in Turkey.
Opportunity to acquire citizenship by real estate investment
In many countries, it is difficult to obtain a residence permit even if you own real estate. However, the right to Turkish citizenship can be obtained by investing in real estate in the amount specified in Turkey. Foreigners who have purchased a property of at least $400,000 can be obtained to apply for Turkish citizenship with the recent regulation. In other words, this is an opportunity to make a profitable investment in addition to buying a property in Turkey and obtaining the right to apply for Turkish citizenship.
Geographical location and transportation possibilities
Turkey provides access to almost all countries of the world with its geographical advantage and transportation infrastructure. Considering that you own a house in Istanbul today, you will have the opportunity to reach 249 different cities in 110 countries with direct flights from Istanbul Airport. In addition, if we look at the opportunities provided by its geographical location, Turkey is one of the rare countries that experience all four seasons. You will also have the opportunity to live a quality life that offers various opportunities in all four seasons.
Social and cultural opportunities in Turkey
There are all kinds of activities such as sports activities, cultural activities, concerts, and entertainment in Turkey. Different entertainment possibilities are offered all over the country. You can enjoy the sea at the blue flag beaches in Antalya, or you can enjoy skiing in Bursa Uludağ. You can also find the opportunity to participate in international festivals held every year in Istanbul. Millions of tourists come to Turkey every year to take advantage of these opportunities.
Affordable real estate prices and exchange rate
Turkey has attracted thousands of investors from many parts of the world. In addition to the natural and cultural beauties of the country, it is also attractive for investors to offer affordable real estate options. The rising exchange rate in recent years offers advantageous and profitable investment opportunities in Turkey for foreigners.
Developed real estate sector and modern properties
The real estate and construction sectors, offering their buyers luxurious and modern real estate options, have developed very well in recent years in Turkey. While most newly built houses have smart home technologies, almost all have luxury social facilities such as swimming pools, spas, and gyms. There is an opportunity to have all these luxury properties at a more affordable price in Turkey compared to other countries in the world.
What Should You Consider While Renting Your House in Turkey?
While renting a house, it may not always be possible to quickly find suitable tenants and complete all transactions. At this point, many different problems can be encountered. You can take precautions against possible problems by learning what needs to be considered before renting your house out. First, every transaction must be documentable to seek legal rights in potential problems. The remaining key points are:
Think Professional in Home Promotion
The more professional you are when promoting your home, the more potential tenants you will attract. You can also get professional help from real estate consultants to rent your house. Working with real estate agents is one way to speed things up for tenants and landlords because real estate agents offer support at many points, from communicating with potential tenants to showing the house.
Set Realistic Deposit and Rental Fee
If you do not determine the amount of rent and deposit realistically, you may not be able to find the appropriate tenant, and you may leave your house empty. To determine the rental price of your house realistically, you can research the rental prices in the surrounding area. You can also make an appraisal report to determine the value of your home.
Include Every Detail in the Rental Agreement
In the resolution of disputes between you and the tenant, the articles in the lease contract are applied. For this reason, every detail should be included in the preparation of the lease contract. When preparing a lease, do not forget that you are subject to certain laws and have certain rights by the Code of Obligations.
Get to Know Your Tenant Closely
If you are going to rent your house, it is better to know your tenant. At this point, there is a tiny line between being involved in his life and getting to know him closely, and as a host, you should pay attention to this issue.
There should be no uncertainties about how many people will live in the residence. At this point, it is an important detail to find out whether the tenant is married and has children. The landlord has responsibilities to other residents in the building.
Another point to be considered while renting the house is to demand that the subscriptions be in the name of the tenant. In this way, you can take precautions against situations like non-payment of invoices.
Landlords or real estate agents in Turkey usually make 1-year contracts with their tenants. After your term expires and the other party has not declared any intent one month before the end of the contract, the contracts are automatically extended for another year.
Determination of the Rental Price
The initial value and location of your property will be an important determinant of your income. For example, a villa in Bodrum's Yalikavak district of Antalya's Kalkan district will provide you with a higher rental income.
These are resorts (ports/marinas) that are known for attracting people of higher socioeconomic status. Being the most expensive place in the country, Istanbul has the highest rental prices due to being a commercial center and a cosmopolitan center. Rents start at an average of 2,500 TL.
Determination of the Deposit
As is customary (and written in the contract), the first month's rent is usually paid in advance. The tenant is also expected to pay a deposit to be allocated for potential damages. Some landlords may request 5 or 6-months’ rent in advance in seasonal rent, eliminating the need to collect every month.
Turkish law specifies that all rents (or those exceeding 500 liras) must be paid via bank transfer to provide a paper trail. Your tenant may also require you to provide them with a receipt for tax purposes, such as when a company pays a worker's accommodation. To be able to generate receipts, you must set up your own company. With a reliable account, you can top it up in no time and for a small price.
Annual Income Tax
Regardless of the length of stay of your tenants and for your earnings exceeding 5,400 TL per year, you must declare all of your rental income to the tax office. If you have your own company, you can claim services, such as water, electricity, and internet on a tax-deductible basis.
For more information, please refer to the Turkish tax office's English guide for foreign landlords. Tax payments for the year are collected in 2 installments in the following year. Although the amount of tax you will pay depends on your earnings, you should expect to pay around 15% or more. If you are a foreign national, you will need a tax ID to do this.