Today we will talk about how much income you can get by renting out long-term or short-term rental housing in Turkey. You will find out what is more profitable and in which case the wear and tear of real estate will be less. I will also talk about the legal nuances and violations that can cost you dearly (literally expensive – we are talking about fines), as well as the risks that arise when choosing a broker.

Long-term lease: stability and predictability

Take, for example, an apartment in the 1 + 1 format worth 60-70 thousand dollars. It doesn’t matter in which city – in Istanbul, Antalya, Alanya or any other. Across the country, such apartments are very similar. It is one bedroom + one living room. The kitchen is separate or combined with the living room. Plus an entrance hall, a bathroom and a large balcony. The apartment is handed over to the buyer already furnished.

With a long-term lease, it will rent for an average of 300-350 dollars per month and will give you approximately 3600 dollars of income per year. With such indicators, the return on investment will take about 19 years with a housing cost of 70 thousand.

I note that now we are considering only the profitability of rent, although the main profit comes primarily from the sale of an apartment a few years after the acquisition. If you buy it at an early stage (at the stage of excavation), and even under the renovation program, then the profitability of real estate in two to three years can reach 60-70%. This will be facilitated by the constant rise in prices in Turkey, as well as the improvement of the area where this object is located.

Rent, on the other hand, is considered by classical investors rather as additional income. Just so that the housing does not stand idle while the investor waits for the right moment to sell. In such cases, they often make a choice in favor of a long-term lease, so that the tenant, not the owner, pays for the maintenance of the apartment. Let’s not forget about utility bills and aidat, which have to be paid even if the housing is idle. If you do not rent a house, then pay for everything yourself.

I note that with long-term rentals, the wear and tear of housing is much higher. Therefore, you will have to make repairs every 5 years. This is also an important item of expenditure, which directly affects the attractiveness of the apartment for potential customers and, accordingly, its profitability.

The same applies to commercial real estate, which, by the way, we can also offer. It can only be rented out for a long-term lease, and the depreciation period here is on average 25 years. Investing in housing for a small investor is more profitable than in commercial real estate.

Summing up in this block, in my opinion, a long-term lease is not very interesting in terms of earnings. It gives about 5% per annum in Turkish lira. Taking into account inflation and devaluation, this is essentially no longer earnings, but simply the preservation of capital and therefore a good choice for those who plan to receive the main profit from the resale of real estate.

If you intend to make renting your main business, then it is better to look at the short-term format. Such a lease allows capital not only to preserve, but also to multiply, wears out less and does not interfere with the sale of housing in the future. However, there are certain risks. But more on that in the next section.

Short-term rentals: profitability and flexibility

What are the benefits of short-term rentals? The main advantage is that you will be able to use this housing yourself at a time when it is not rented. For example, you live there only a couple of weeks a year, during your vacation, but the rest of the time you rent it out for a short period to tourists.

In this case, the monthly profit can be approximately $800 during the high season. This is the season of the greatest tourist traffic, which lasts 6 months in Turkey. For another three months, there will be a profit of about $ 300 when there are customers, but they will be few. And for another 3 months, the housing will be empty – you need to be prepared for this for short-term rentals.

But even if we calculate the approximate income only for the high season, it will still be higher than with a long-term lease for the year – about $ 4800. With a housing cost of 70 thousand dollars. Plus those three months when the income will be $ 300 per month or $ 900 for all three months. In total, in our example, it comes out $ 5700 per year for short-term rentals.

If we take the cost of an apartment of 70 thousand dollars. and divide it by 5700, we will see that the apartment will pay for itself in 12 years. That is, with a short-term lease, the apartment will pay off in 10-14 years, and not in 18-20, as is the case with the long-term format. Therefore, short-term rentals are definitely more profitable. With short-term rentals, it wears out less and repairs can be done every 8 years.

But short-term rentals also have serious risks. Income here is more difficult to predict. If you try to rent housing on your own, without a partner company, then you may have problems with establishing a constant flow of tenants.

However, the most important thing is that in Turkey, individuals are legally prohibited from renting out housing for a period of 1 day to 6 months. A fine of 30 thousand liras. and deportation from the country if you are not a Turkish citizen. These changes were implemented 3 years ago.

But do not be upset, this was done not to prohibit short-term rentals, but to improve the quality of service. According to the law, individuals are forbidden to rent out housing, but this is allowed to legal entities – agencies such as Expert Property, which take the object into management, attract tenants, collect rent from them, monitor the condition of housing and its cleanliness, etc. That is, for the homeowner, short-term rental becomes a truly passive income.

Immediately after the sale of housing, we can conclude a trust management agreement with the client. This power of attorney will allow us, the legal entity, to provide short-term rental housing on your behalf. At the same time, the contract will clearly stipulate the framework of what services we will provide to you. So that there is not even a hint of abuse.

However, we do not have a license for all objects, so we will not be able to help in all cases. But even if we can’t become your management company, we are still ready to help you with advice – to explain how to choose the right partner company. Since the yield of short-term rentals is 3-4 times higher than that of long-term rentals, I recommend that you better understand this issue.

Choosing a management company: how not to fall for scammers?

In order for short-term rentals to become truly profitable, you need to know who you can work with and who you should avoid. Your partner company must take care of all the risks, design and management of housing. Our company is fully legally responsible for the housing that was purchased with our help and which we rent out on your behalf.

The main criteria that will help you choose a reliable company, I will briefly describe. The agency must have a portfolio of such projects. It should be large enough with a large staff of employees of various profiles.

It is necessary to make sure that the company will master your project and will be able to represent your interests in any situation, providing both control over the condition of the property and legal support. When transferring your home to a trust lease, you must understand that the care of it will be of high quality and reliable.

I often see small agencies or just private agents “forget” to inform home buyers that short-term rentals for individuals are prohibited in Turkey – this way they can simply expose you to a fine and deportation. At the same time, they may also not have the appropriate license – be sure to clarify this point. This is very important.

Some small companies and agents, working illegally, hide income, deceive homeowners, not giving all the agreed profits. If the owner is a foreigner and does not personally visit the housing, then they can tell that the property is idle, although in fact this is not the case – they simply steal the rent. I advise you to learn about the reputation in the market, reviews about companies.

How else are there risks? Dishonesty of the tenant – tenants who do not pay on time or damage the furniture, the situation in the apartment, are obliged to be responsible for damage to your property. And it is the management company that should monitor this – your partner. A bona fide company, such as Expert Property, represents you not only in making a profit, but also in resolving disputes with tenants.

When choosing such a company, you should understand that it will lead your property for many years, therefore you should approach the choice very responsibly and carefully. To avoid all this, you need to work only with large licensed agencies, such as Expert Property.

Companies that operate publicly and build up their reputation over the years will never deceive customers. It is important that the company promptly provides information on whether housing is rented, how much money has already been collected – we have this mechanism established online. We value our reputation. We already have a rich portfolio.

Conclusion: Expert Property is the best choice!

Short-term and long-term rentals have their advantages and disadvantages that make choosing between them difficult. However, this will be simplified by a reliable partner who will represent you in Turkey. Our team is ready to help you with both the acquisition and monetization of real estate in hospitable Turkey – both residential and commercial.

To purchase a home for rent, I advise you to take a closer look at cities such as Antalya, Alanya and Istanbul. There are options with guaranteed long-term and short-term rentals and a good yield of 7-10% per annum – we will find you clients ourselves!

If you want to know more, then write to me right now! Our agency is always open to communication with new clients – our future friends. Rest assured, once you get to know each other better, you will never refuse the services of our friendly professional team.

Your Tatiana Güneş and the Expert Property team