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Conditions for the success of investment in an under-construction apartment for resale in Turkey

25/03/2022 Investment in Turkey 726 Conditions for the success of investment in an under-construction apartment for resale in Turkey

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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.

Advantages that drive the investor to purchase an apartment under construction

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.

Risks that may face the investor when purchasing an apartment under construction

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.

Why do contractors sell apartments in the construction phase?

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.

How can the investor protect himself and not fall victim to contractors?

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.

Conditions that the investor must consider when buying an apartment under construction in Turkey

  1. Choose the location of the residential complex very carefully; Let that be near the emerging government projects, such as bridges or huge projects such as hospitals, emerging parks, metro stations under construction, or new residential areas, in order to obtain a reasonable profit margin after the completion of the construction of the project at the level of the region and the project together.
  2. Check the building permit; The apartment planned for purchase must be presented clearly in the licensing project and also in the project model or the pictures presented to the investor. Support and advice can be requested from technical personnel such as engineers, architects, or real estate professionals.
  3. Search for the previous projects of the contractor or the construction company that manages the housing project in which you want to buy. Companies with reliable and successful previous projects are more likely to complete the project without any problems.
  4. Check the land registry records “title deed” to verify the occurrence of the land on which the building will be built within the construction plan.
  5. When signing the contract with the contractor, there must be a clear date and confirmation regarding the date of handover of your apartment.
  6. The specifications of the apartment that you will get must be specified in detail in the contract, including the area “square meters,” the floor number, the direction of the apartment, and even the number of bathrooms. Thus, any potential misunderstanding or confusion will be avoided.
  7. Pay attention to the title deed of the apartment, through which you can understand exactly where your apartment is located and on which floor.
  8. Ensure that all the features offered by the contractor are implemented. Site arrangements, construction work, and similar expenses must be contracted by the responsible person.

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: parkmozaiksahibindenemlakgurmesiinsapediaemlakkulisi

Editing: damasturk

 

 

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