Why Off-Plan Property Investment is Popular Globally and in Turkey

Many investors are drawn to off-plan projects primarily due to their lower cost compared to completed properties. But what truly motivates someone to invest in an off-plan? Let’s explore the advantages and disadvantages of such investments both in Turkey and around the world.

What is Off-Plan Investment?

Off-plan essentially means purchasing a property “as construction begins, ensuring an apartment even before the project’s completion.” The primary risk lies in the possibility of the developer going bankrupt, which deters many from such investments. A lot of investors opt for a more cautious approach. However, who doesn’t like a high return on investment with calculated risks?

The Real Estate Sector in Turkey

Turkey’s economy is strongly supported by its real estate industry. Major construction companies dominate the scene, both domestically and internationally. These adept Turkish companies not only develop luxury projects within Turkey but also essential infrastructure like roads, dams, and bridges globally. A government endorsement on most of these projects signifies the assurance that investor rights are safeguarded. With the government often co-funding these ventures alongside other investors, abandoning or delaying such constructions becomes increasingly challenging unless there are massive disruptors like natural calamities.

Without even factoring in the government’s involvement, the real estate sector remains a top attraction worldwide. A multitude of foreigners have been snapping up properties across Turkey based on their personal preferences and objectives. The allure of the real estate market isn’t limited to outsiders; locals too see it as a lucrative investment. Many opt to invest in a property over starting a business, as renting out properties can be a steady source of income. Thus, real estate stands as one of the most robust sectors in Turkey.

Furthermore, investing in an off-plan property could mean approximately 50% cost savings, with potentially double the return on investment in the long run compared to a finished property. This approach can even facilitate a quick sale, leveraging the urgency of those looking for immediate occupancy. This can create a win-win for both the seller and the buyer.

However, there are inherent risks. Smaller construction companies, particularly those working on limited-sized buildings, can go bankrupt. Other challenges include issues with subcontractors, lack of resources, economic downturns, inflation, rising expenditure, unforeseen project complications, and poor decisions by developers.

Factors to Ponder When considering Off-Plan investments

1. Reputation of Contractors and Companies: It’s vital to gauge the reliability of sellers and their previously completed projects. Start by seeking feedback from prior investors. Also, scrutinize the financial health of the company to ascertain the likelihood of project completion.
2. Resale Restrictions: Ensure your contract doesn’t have a “Not sell” clause if you aim for a quick resale.
3. Settlement Clauses: Many overlook the settlement clauses. These dictate the project’s deliverable quality. Engage with the entity offering this clause and ensure its incorporation in the contract.
4. Payment and Financing: Understand your financial capacity and ensure the project offers favorable payment terms.
5. Property Dimensions: Clarify if the quoted property size is gross or net. Check the dimensions of rooms and the net size relative to the overall property size.
6. Building Permit: Always request to see the building permit. Verify its authenticity and match the stated number with the one on the permit. Seek expert advice if in doubt.
7. Contractual Terms: Scrutinize the contract in detail. If uncertainties arise, consult a lawyer. Remember, the title deed completion should happen at a legitimate title deed office in Turkey.

In conclusion, while off-plan investment offers substantial rewards, it’s essential to exercise due diligence to ensure a smooth and profitable venture. Considering an off-plan property investment in Turkey? Reach out to our experts today for personalized guidance!