Many investors resort to buying an apartment or a property in a project under construction or whose construction has not yet begun, with the purpose of reselling. However, it is certain that some of those looking to buy an apartment in Turkey are unaware of the developments in the real estate market in Turkey. Everybody knows that such investment has many advantages that may bring a good profit to the investor, yet at the same time, it is never without risk. Anyway, the profits and benefits that the investor can reap are worth the risk.
Thinking about buying an apartment under construction brings to mind the advantage of the low price of such investment. It can be considered a kind of investment in Turkey with a small amount of money, yet it provides a very good opportunity to make a profit, in the light of the recent status of the prices of apartments in Turkey, which are constantly increasing, offering a rate of profits that varies according to the nature of the project. It is known that this type of investment can achieve more profit than the investment achieved by purchasing a ready-made apartment. Also, the apartment that is under construction will increase in value once its construction is completed, not to mention that the investor can choose the apartment according to his desire. As well as determining the floor and facade on which the apartment will be built. In addition, since the apartment has not yet been built, there could be an opportunity to make some amendments if existed. And if the executing company of the project has an agreement with banks, the investor may get attractive interest-free loan opportunities from these contracting banks.
The most common risks of buying an apartment under construction are bankruptcy of the contractor, failure of completion, or delay in implementation. The most common reason for a contractor to fail, abandon, or prolong the process of implementation is the difficulties of financing the project. These difficulties may arise from poor management, as well as from the negative effects of economic status on the construction market that cause unforeseen costs.
So, when you buy an under-construction apartment in Turkey, you need to know that you are taking a big risk. Many people have fallen victim to this situation. There are many examples of a contractor failing to meet his obligations, being imprisoned, or defrauding people. Disagreements may also arise between the construction company and the landowner to add-in salt to injury.
Usually, the reason is to provide a source of funding for the continuation of the project. Sometimes, it may be better for contractors to sell the apartment at a reasonable price at the construction stage compared to the interest of loans paid to the banks. However, construction becomes risky when some circumstances arise that the contractor does not anticipate, or when he cannot sell enough apartments as planned and does not get the necessary financing. This business may turn into a struggle to save paid money instead of investing.
One of the ways to protect the rights of the investor when buying an apartment under construction is to ensure the completion of the construction. For small projects, building completion insurance is usually not required. But in projects with more than 30 apartments, completion insurance or guarantees in prepaid housing contracts are required. The investor's purchase of an apartment on his own initiative without a guarantee for the completion of the construction could make him vulnerable to the contractor's bankruptcy or other unpleasant matters.
Thanks to the Regulation on Prepaid Home Sales, which was created for Investor Protection Law No. 6502, and was enacted in 2013, investors can be protected from being subjected to unfair treatment, as the regulation strengthens control over apartment sales. Therefore, before buying an apartment under construction it is important to review this regulation.
Against this backdrop, it can be said that investing by purchasing an apartment under construction may be an interesting opportunity to achieve a good profit. Yet, this type of investment is a bit risky if the investor is not fully aware of all the details related to construction, delivery, and payments. Thus, it is recommended to consult with experts in this field, such as damasturk Agency for transparent reference.
Sources: parkmozaik - sahibinden - emlakgurmesi - insapedia - emlakkulisi
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