Today we will talk about interest-free installments for the purchase of real estate in Turkey. We have already touched on this topic in the article about mortgages, but today I will reveal it in more detail, because it is simple, profitable and reliable – especially if you use the services of Expert Property.

Why installments from a developer are better than a bank mortgage: top 5 reasons

If you do not have the full amount for the house of your dreams, but you do not want to lose this ideal object, then people turn to installments from a construction company or a mortgage. In addition, real estate prices in Turkey are constantly growing – and the best villas and apartments are growing rapidly, at 25-30% per year. And if you just save money, then while you save up to buy at the old price, the cost of housing will increase. You will accumulate the missing amount again, and the price will rise again. And this race with prices can last indefinitely.

But why take the risk if you can fix the cost of housing with interest-free installments or mortgages? However, there are several nuances that distinguish a bank loan from an installment plan.

First , installments are available only for new housing, because it is issued by a construction company, but a mortgage from a bank allows you to cover the costs of any housing, including in the secondary market. However, the best profitability in Turkey is shown by real estate purchased at the stage of excavation, so the choice is obvious to me personally.

The second is the maturity date. The bank can issue a loan for years and decades, and the developer usually issues installments only for the construction period. There are, of course, exceptions when a construction company provides installments for 5 years or more, but such proposals should be treated with increased attention – later in the article I will explain why.

The third is the interest rate. This is the simplest and best indicator when comparing mortgages and installments. Simply because the installment plan of our partners-developers is interest-free (i.e. 0%), and for banks – even secular, even halal – from 16% to 18.5% per annum. The choice is obvious.

The fourth is a package of documents for registration. The bank will check both the seller and the buyer in depth, will request a certificate of income and much more. But the construction company actually needs only your passport and a specialist from Expert Property, who will help you draw up a contract. For installments, you need the same minimum package of documents as when buying a home – you pay the same amount, just not immediately, but in several tranches.

The fifth is the amount of payment. The bank can issue a loan to a foreigner only for 50% of the cadastral value of housing (the one indicated in the TAPU, certificate of ownership). And it can be an order of magnitude lower than the market price, which is why the bank will have to ask to increase the estimated value of the object – another procedure will be added.

With installments, everything is simpler – you pay the first installment, which is usually 20-25% of the amount, and then pay the balance divided into shares without interest. How exactly to pay (monthly, quarterly or once a year) is decided by the buyer himself, and in the case of a mortgage, the bank has the last word. Moreover, the bank imposes an encumbrance on your home until you pay him the debt in full and even for some time after that, until you submit a special application.

As you already understood, installments in most cases are much more profitable than a mortgage. And now I will talk about all this in more detail.

Why do they make out an installment plan?

As I said, the main motive here is to “ground” your capital and fix the current price of the housing you are interested in, even if you do not have the full amount yet. The main difference between a mortgage and an installment plan is that installments are usually issued for the construction period, but a mortgage can also be taken to buy ready-made housing. You will not be able to immediately move into an unfinished house, which can stop those who need somewhere to live right now.

For this reason, mortgages are often chosen by those who choose housing for themselves, and installments are chosen by investors who plan to rent out housing and then resell it, that is, for profit. By the way, a mortgage and long-term installments (after the commissioning of the object) allows you to receive passive income from rent – in this way, your home itself will help pay for your own purchase. A very interesting option, you see.

The many advantages of installments make the demand for it consistently high. For this reason, in Turkey, most construction companies operate on installment terms. However, the conditions may differ from company to company. Some allow you to pay only 25% or 50% of the amount, while others 70% or even 75%. It all depends on the construction company itself and its business model, because the main goal of the developer is to return his investment and make a profit from this object in order to start building the next one.

It is because of this that most companies issue installments only for the construction period. This is usually up to 15 months for low-cost housing and up to 24 months for larger projects – the earlier the stage, the longer the period will be. You can also find construction companies that issue installments for5 or even 10 years. But I would advise you to carefully study the conditions for installments for a very long period – it is important to understand how the company will earn money then, is there any catch there?

It may happen that this is just a “financial bubble” in which the price is unreasonably high and, accordingly, after the delivery of housing, its value will not grow, as the investor expects, but rather fall. That is, this housing may turn out to be illiquid, and therefore the developer lures buyers there with the help of marketing and ideal (at first glance), trying to get rid of this object as soon as possible.

We carry out constant monitoring of objects where installments are available throughout Turkey – Antalya, Alanya, Bodrum, Istanbul, etc. Moreover, we have already established contact with the most qualified and reliable construction companies.

The buyer on his own is unlikely to understand such nuances. Especially a foreigner who does not speak the language and is not familiar with Turkish law and the market. This is the key reason why we advise you to conduct even the most reliable transactions at first glance together with professionals whose reputation has been tested over the years in the market – such as the employees of our agency Expert Property . We select only the best personnel for our international network.

For all questions about installments, I will be very happy to tell you personally – write or call me, or leave a request on our official website so that we can dial you ourselves. We will find the best offer on the market for you!

Instead of a conclusion: why is housing the most reliable asset for preserving and increasing capital?

In recent years, we have been hearing more and more about financial instability around the world, one crisis after another is coming, it is becoming more and more difficult to predict in the economic sphere. If you remember the past, then this happens all the time – the same crisis of 1997 is difficult to forget. All our savings have turned into just “candy wrappers”. Then there was 2008 , now there is the coronavirus crisis … You can be sure that this is not the last financial crisis. Therefore, the issue of saving and increasing capital comes to the fore – how to save money so that it does not depreciate?

My advice to you: invest not in virtual assets, but in real and tangible ones; Build not “paper locks”, but real strong housing. Of course, we all earn and spend paper money on a daily basis. It’s convenient. However, they are constantly depreciating – especially in developing countries, which include all CIS countries and Turkey. Therefore, they are not suitable for long-term investments.

Bank deposits are also not particularly attractive – usually there is a rate at the level of inflation, and the banks themselves tend to “burst” during a crisis. Cryptocurrencies – “digital gold” – with their wild volatility are even less suitable for savings. These are high-risk assets.

Real gold is less risky, but taxes and bank commissions eat up almost all the profitability (you will not keep the bar under your pillow – most likely you will take it to the bank). You can invest in a business (by the way, we can tell you in which area the highest profitability), but such income will most likely not be passive – you will have to control the company, employees, constantly keep your finger on the pulse.

Quite another thing is high-quality comfortable housing in a good location, with high population dynamics and developed infrastructure. People will always have to live somewhere, and tourists will always have somewhere to stop for a vacation. Therefore, resort Turkey is simply ideal for capital investments.

Buying a home, for example, in Antalya has a double effect. First, market conditions and the development of urban infrastructure will be able to give from 20% to 60% profitability. And secondly, housing should not stand idle in anticipation of the best prices, it can and should be rented out with a yield of
5-7% per annum
. Housing will not disappear overnight, in the event of another crisis, will not be reset due to the shutdown of miners and will not disappear along with the owners of the bankrupt bank.

High-quality real estate is stability and confidence in the future, despite any troubles in finance, economics or politics. To shake the demand for comfortable housing, something truly global must happen – even when all other assets are reset to zero, your housing will still stand in its place.

And at the end of the article I will add. Time is money. And time is now playing against the buyer, because in recent years the value of real estate has been constantly going up. If you do not buy the asset now, then in a year you will have to pay 20-30% more. But if you buy, then you will buy more expensive by the same 20-30%.

Even if you do not have the full amount right now, the specialists of the Expert Property agency will definitely come to your aid, choosing the best option with an interest-free installment plan. No need to waste time and money. Need to call me right now!