How to Rent out Your Home in Turkey
In the last 20 years, the real estate market of Turkey has revolutionised itself to become a top performing industry fuelled by the best and brightest in its sector. Now rivalling the modernization of other western markets, buyers can tap into an extensive portfolio, of buy-to-let investments. Renting out property in Turkey is a lucrative return if you get it right. If you are thinking of becoming a landlord in Turkey, let’s look at the process of doing it properly. The first step is to familiarise yourself with Turkish tenant law.
Legal Obligations when Renting out Property in Turkey
Some owners rent their property out long term and much the same as in western countries; it is worth visiting a solicitor to draw up a contract and have it notarized so that both parties are acutely aware of their responsibilities. The income you will gain varies depending on where you choose to buy property. For example in the coastal resort of Altinkum, rental prices for a fully furnished apartment average between 500 to 600 lira a month but head north to Istanbul, that is the most expensive place in Turkey for a living, and rents can reach as much as 2,000 lira a month.
It is common for the renter to pay a month’s deposit in case of damages and some cases; they will pay six months up front, which saves the landlord the hassle of chasing money monthly. If the rental payment is 500 lira a month or higher, the law says, it must be given via bank transfer, so there is a paper trail. Some renters will also require a receipt if their company is paying accommodation costs or they can recoup rent for tax purposes.
Such is the detailed process of renting out the property long term; we recommend you visit a lawyer to gain up to date legal information on being a long-term landlord. While many people in Turkey do not bother with contracts, it is worth remembering that if you do go down this route and do not know your renters personally, you could end up with a squatter problem.
Short Terms Rentals
In the latter half of 2016, the Turkish government amended the “Identity Declaration law.”From now on, anyone marketing their homes as holiday rentals must register to the GIYKIMBIL system to enter the names of everyone who will stay in their property. It is part of a wide-scale campaign to prevent terrorism.
To do this, owners should visit the local gendarme station who will give access to their software free of charge by issuing a password. The person who signs for the password is the person legally responsible for submitting names. If you have a management company handling your property and tenants, they should assume this role. They will also need to show they are managing the property on your behalf and submit proof of your identification as well as a copy of the written agreement between you.
When anyone rents your property, whether it be for one night or two weeks, his or her details must be entered into the system. Failure to do so will result in a fine of 700 lira a day for not declaring occupants. The gendarme will background check all names and reserve the right to monitor properties and speak to your tenants. If you are a foreigner with a Turkish kimlik or working permit, you can sign up straight away, however, if you do not have the above, you will need to form a company, which any reputable accountant will do it for a small charge.
Income made from short or long-term rentals must be declared to the tax office. The good news is that if you have formed a company to sign up to the GIYKIMBIL system, you can also claim utilities such as electric, water, and the Internet as tax deductible. The Turkish tax office has published this full-length guide in English to assist foreign landlords with the system, but an accountant can also perform this task for you.
Other Aspects of Renting out Property in Turkey
Marketing is Crucial
Undoubtedly, any potential landlord needs to brush up on their marketing techniques, more so if you are advertising your property as a short-term holiday rental. Utilise websites that offer free advertising and ask family and friends to spread the word. Use local community groups on Facebook to let people know that your property is available for rent and ask previous holiday renters for testimonials. The marketing opportunities are endless and creative investors will happily recoup their time back tenfold.
Location is Everything
Making a buy-to-let investment means looking at areas carefully to find out which ones have the potential for a high rental yield. Around Turkey, places have a proven track record, and it is evident that each location has its own merits that will determine your success. Resorts and towns that are popular for buy-to-let investments include…
Istanbul: As, the biggest city in Turkey, it is a major hub of business, education, tourism, and finance; hence, demand for long-term rental properties is higher. If the property is in a touristic area, you also have scope to swap to short term rentals should you wish to. A recent building spree has transformed Istanbul by adding modern apartments and homes to the extensive portfolio, so the choice is unlimited. All-inclusive communities are a growing trend in which shops, apartments, offices and recreational facilities are all grouped together to provide an atmosphere similar to that of a small village.
The Bodrum Peninsula: With an airport serving domestic and international airlines, this peninsula is a top performing tourist district. Although one week’s holiday rental often outperforms the income from a month’s rent, the demand is mainly limited from May to October, because this is the tourism season and when all the leading airlines resume their flights to Turkey. The Yalikavak region, in particular, has taken off since its emergence onto the Turkish Riviera with a state of the art marina.
The Fethiye Region: This area has always been popular especially with British holidaymakers. The reasons why are plentiful but close access to Dalaman airport and outstanding landscape scenes of natural beauty are hugely responsible for the demand. Tourists tend to gravitate towards the resorts of Calis beach, Hisaronu, and Oludeniz although there is plenty of property for sale in the main town centre as well.
The Antalya Region: As well as the main city centre, this area includes the smaller resorts of Side, Kemer, Kalkan and Kas as well as Belek, the golfing capital of Turkey and Kalkan that is famous for its luxury villa rentals. Heading further east, the seaside resort of Alanya receives many East Europeans tourists as well as Russians and Brits.
Should You Use a Rental Management Company?
If you are not living permanently in Turkey, it is worth considering employing the services of a rental management company to keep an eye on your property, and handle affairs. Many of them will also actively promote your property to an interested market. Of course, the downside is that this will eat into your income. Shop around to assess the fees that each company offers because these vary from one month’s rental out of a year to a percentage of the monthly income. If you live permanently, in the same town as your rental property, there is no need to utilise the services of a company.
The Best Property for a Buy-To-Let Investment
If you are currently looking at buy-to-let properties in Turkey, the features, amenities, and facilities of any home can go a long way into marketing the property for itself. For example, in places popular with holidaymakers, a home near the beach, restaurants, shops, and transport links will receive higher demand than properties off the beaten track. Naturally, internet access is a top demand from renters as is air conditioning and recreational facilities. Our extensive property portfolio from all regions includes homes for permanent living or holiday stays, and the full range of services and amenities display perfectly why Turkish property is good value for money.