İstanbul, Turkey’s most populous and vibrant city, is the hub of trade, culture, and tourism. With its growing population, developed infrastructure, and increasing foreign investment, the real estate market in İstanbul has been flourishing. Its strategic location between Europe and Asia offers numerous advantages for both living and investing, providing a unique blend of cultural experiences, business opportunities, and easy access to global markets.
But for those considering living in this dynamic city, the question often arises ‘’is it better to rent or buy a house in İstanbul?’’ Let’s delve into the pros and cons of renting vs buying a house, and whether investing in real estate here is a good idea.
Buying a House in İstanbul
Choosing to buy property in İstanbul has its own set of benefits. İstanbul offers a high growth potential due to its infrastructure developments, an increasing population, and substantial foreign investment. These factors make owning a home or apartment in İstanbul a solid investment option.
Pros of Buying Property in İstanbul
1. Solid and Stable Investment: İstanbul’s real estate market offers good growth potential. With large-scale development projects underway, owning a property here can be a long-term financial asset that appreciates over time.
2. Rental Income Opportunity: Owners can earn rental income during periods when they don’t settle the property. The high demand for rental properties in İstanbul, particularly in central areas and nearby tourist attractions, makes a steady income possible. As İstanbul is a metropolitan city its high-quality life standards like education, health, transportation, entertainment, job opportunities, and more increase the migration rate within the country.
3. Freedom and Control: As a property owner, you can renovate and make major alterations without needing permission. You can create the living environment you desire without any constraints from a landlord. You can extend, rebuild, or make smaller the room you wish or add more room to your property when you own one, it is the most relaxed feeling that you don't have to ask for permission.
4. Citizenship by Investment: One of the key advantages of buying property in İstanbul is the opportunity to qualify for Turkish citizenship. The citizenship by investment program allows foreigners who invest in Turkish real estate to apply for citizenship, adding a significant incentive for buyers.
Cons of Buying Property in İstanbul
1. High Upfront Costs: Purchasing a property requires a significant financial commitment, including a down payment, taxes, and closing fees. These initial costs can be prohibitive for some.
2. Maintenance and Responsibility: As a homeowner, all property maintenance, repairs, and renovations fall on you. This can be both time-consuming and costly.
3. Market Risks: Like any investment, property ownership comes with risks. The value of your property could fluctuate, and selling a home, especially in a competitive market, may take time.
Renting a House in İstanbul
Renting a house in İstanbul offers several advantages, especially for those who prioritize flexibility. Whether you are an expat unsure about how long you will stay or someone who prefers not to be tied down by a mortgage, renting can be an appealing option.
Pros of Renting Property in İstanbul
1. Flexibility: Renting gives you the freedom to move as needed. If your job or personal circumstances change, relocating without the hassle of selling a property is much easier.
2. Lower Initial Cost: Renting requires a smaller upfront financial commitment than buying, which is helpful if you are not ready for a large investment or do not have a down payment saved.
3. No Maintenance Responsibilities: Renters typically don't need to worry about covering the costs of property repairs or renovations, which can lead to significant savings over time. However, depending on your contract, you may be required to pay a monthly maintenance fee, known as "aidat" in Turkey, which is used to maintain communal areas in the building.
Cons of Renting Property in İstanbul
1. No Investment Return: When you rent, the monthly payment is an expense that yields no long-term financial return.
2. Rent Increases: The rental market in İstanbul is highly competitive, with prices rising due to the city's growing population, increasing tourism, and internal migration. This can make renting more costly in the long term. Before July 1, 2024, homeowners were allowed to raise rent by around 25% each year, but new regulations have removed this cap. As a result, annual rent increases may now vary, leading to potentially significant differences in rent over time.
3. Limited Control: Renters are often restricted from making major alterations to their homes and must rely on landlords for maintenance and improvements. Typically, permission from the landlord is required for any changes, and it's common for rental contracts to specify that no modifications can be made, even as minor as hanging a picture on the wall. That's why it's important to consult your landlord before making any adjustments to the property.
Is It Worth Buying Real Estate in İstanbul?
The question of, whether is it worth buying a house in İstanbul, depends on several factors. For those with a long-term vision, buying a property in İstanbul is generally considered a wise choice due to the solid and stable investment opportunities available. If you plan to stay in the city for an extended period and can afford the upfront costs, buying a home in İstanbul may be more advantageous than renting.
İstanbul, with its top-tier healthcare, education, tourism, and advanced transportation systems, continues to be a highly sought-after city. Its growing population, fueled by both domestic and international migration, ensures a constant demand for rental properties.
Moreover, settling in İstanbul and taking advantage of its numerous opportunities is becoming increasingly attractive. Popular districts like Kadıköy, Fatih, Beşiktaş, and Esenyurt, known for their exclusive facilities, are among the best areas to buy a home in İstanbul.
İstanbul is an excellent choice for buying real estate, offering more affordable prices compared to many European countries. Its safe environment, combined with limitless amenities and facilities, makes it a highly attractive option for buyers.
Here are the key reasons why buying a home is better than renting;
- Although buying a house involves higher initial costs, in the long run, it can save you money. Instead of monthly rent payments, you can pay toward your mortgage, building equity over time.
- As mentioned earlier, owning property provides the chance to rent it out, either short-term or long-term, especially if you are living elsewhere for certain periods.
- As a homeowner, you can make any changes to your property without consulting a landlord, allowing you to personalize your living space as you see fit.
Additionally, it’s important to consider the age of the building when making a decision. In İstanbul, older properties may require more repairs and maintenance, while newer buildings come with modern amenities and require fewer immediate upgrades.
Buying Property is the Smart Move for Long-Term Benefits
While renting offers flexibility, buying a home in İstanbul is a more attractive and smart move for those seeking long-term financial security and investment growth. With İstanbul’s strategic location, increasing infrastructure, and growing foreign interest, the real estate market is positioned for steady appreciation. Homeowners not only gain control over their property but also benefit from potential rental income and property value increases over time. Renting, on the other hand, is a short-term solution that comes with rising costs and no financial return. In conclusion, investing in a home is more advantageous than staying on rent.
