ESSENTIALS SERIES
GUIDE TO RENTING PROPERTY IN TURKEY
INSIDE >> • Researching the Market • Will I Make Money? • Marketing & Maintenance • Legal Aspects & Taxation
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© Oceanwide Properties Ltd 2013 Turkey Essentials Series: Guide 003 UK office | London 85-87 Bayham Street London. NW1 0AG Tel: +44 (0) 207 424 7892 Mob: +44 (0) 776 015 5601 Turkey office | Fethiye Tuzla Mahallesi, Cahit Gunduz Cad., Bahriye Ucok Parki Yani, No.1, Daire 1. Fethiye, Muğla Tel: +90 (0) 252 6149 174 Mob: +90 (0) 531 648 6140 Registered company in England and Wales 05413508
www.oceanwideproperties.co.uk
WELCOME
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spect a l a g e L – 7 page 1
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o-le t y u b Why – 4 page ? y Turke
Hoşgeldiniz Welcome Welcome to the Oceanwide Properties Essentials Guide to Renting Property in Turkey. Investing in buy-to-let property is big business these days. Those in the know are fast maximising on real estate opportunities at home and overseas conscious that as economies move beyond the recession so will market values rise and rental and home prices increase. Here at Oceanwide Properties we also realise that the days when overseas homes were simply purchased for personal use have become far less frequent. The unstable economic climate has caused clients to be more cautious with their capital and expect far more from their outlay. The opportunity of property rental is factoring increasingly in purchase decisions, and rightly so in Turkey. With tourism
page 11 – Furnishing
your renta l
property
on the increase and far more expats and holiday makers looking to vacation or tenant self-catering homes, there’s much to capitalise on. But as any seasoned landlord will tell you, buy-tolet in Turkey, or in any other nation for that matter, is not simply a case of securing a suitable property, popping up an advert and pocketing the profits. There are differences in rental attitudes depending on where you choose to buy, the legalities concerning taxation, the basics of furnishing and maintaining the property – and that’s once you’ve figured out the best means to regularly attract tenants or holidaymakers to your property. And so, to address these issues and the often asked questions, we have compiled this essentials guide to give you a simple summary on effectively buying and running rental property in Turkey. We hope you find it informative, and don’t forget that we are on hand to help should you need us! Suleyman Akbay, Director - Oceanwide Properties www.oceanwideproperties.co.uk
contents Overview 4 5 5
from page 4
Why purchase a buy-to-let property in Turkey? Reasons to rent your Turkish property Will I make money?
Researching the market 6 7 8
from page 6
What locations gain the best rental returns? Who can buy a rental home in Turkey What property is best to buy?
Marketing and maintenance 10 11 14 16
Ways to rent your property Furnishing your rental property Marketing your rental property Rental property maintenance
Finance and legal aspects 17 18 18
from page 10
from page 17
Legal aspects to consider from the experts at Contact Law Rental tax in Turkey Seeking advice
FAQs
from page 19
Setting a rental price, taking and managing payments, key holding and cleaning – a selection of our most commonly asked questions.
OVERVIEW
Why Turkey for your Buy-to-let inve
stment?
Investors are increasingly choosing to look towards Turkey to secure a good buy-to-let property investment. Here’s why: Turkey continues to undergo an investment property building boom. There are now far more properties aimed at those looking to secure rental investments across the country. A quick look on the net will throw up many Turkish developments designed to attract investors wishing to secure homes that will pay for themselves and attract rental incomes. With Turkish tourism figures on the increase, and far more holiday makers and expats alike looking to spend family vacations or tenant self-catering homes, the rental market and weekly letting prices in Turkey are rapidly on the increase. Providing purchasers buy wisely and maintain their properties correctly, great returns can be made so it makes sense to consider a property suited to rental in most cases. The majority of foreign home owners in Turkey are now allowed to both rent out their property, and rent a property in Turkey. Rental rates differ considerably depending on location, nearby attractions, transport links and accessibility. Although there are a number of necessary costs surrounding rental matters, these are pretty straightforward and easy to manage remotely. Advertising and gaining rental clients is now quite simple, although many gain the best returns managing lettings themselves, there are now a growing number of rental management agents willing to run the property for you either on an exclusive or guaranteed returns basis, or willing to conduct all the necessary services on request. Amidst continuing European financial uncertainty, and considering the minimal interest returns offered by most banks and EU investment schemes, purchasing a property in a country that has weathered the financial storm, is a smart and feasible decision and one certainly worth consideration. 4
OVERVIEW
Reasons to Rent Making an income from your property in Turkey has never been easier. People choose to rent their villas and apartments for all manner of reasons:
• To offset the running, ownership and maintenance costs • To subsidise mortgage payments against the property • The property was bought specifically for investment and with a rental profit in mind • The apartment or villa was only used occasionally so you simply don’t want it lying empty and deteriorating • Circumstances have changed and you can no longer spend the time you would like in the property and therefore want others to benefit from it
Will I make money? There are many areas in Turkey offering superb property investment opportunities both in terms of capital gain and rental return. But ensuring an effective buy-to-let lies far beyond securing a suitable property, advertising it for holiday rental and then pocketing the profits in the short-term. Your buy-to-let purchase should be based on a medium to long term view. Returns are typically measured by calculating the percentage yield, which is your net income from the property shown as a percentage of your capital investment. Providing you buy wisely and market your property appropriately, the good news is that most property rentals today provide significantly better returns on your money than banks and building societies. The percentage yield does not factor the capital growth that properties may acquire during your period of investment meaning there is a further gain to be anticipated subject to market performance. All investors should seek to achieve the highest possible yield from their investment. At Oceanwide Properties we employ regional specialists who can help you calculate the viability of a property as a buy-to-let before you purchase. Contact us today to discuss the options available to you.
e What locations gain th best rental returns?
1 Turkey is a vast and diverse country attracting millions of visitors each year for a variety of reasons. Cities like Istanbul attract internal migration from Turks in search of work and education alongside year round foreign tourists, students and business traders. The rental demand in Istanbul is therefore very different to that seen in the popular coastal towns and resorts. In general, the majority of letting requirements in cities are long term and year round, those in resorts far more seasonal and of a weekly holiday let basis. 1 ISTANBUL
Turkey is experiencing a wellpublicised housing deficit. The Central Bank of the Republic of Turkey stated that an additional 5.5 million residential homes are required in Turkey by 2015, of which over half of these are needed in Istanbul. With the Turkish population increasing faster than any other EU country, and the majority of the population within early working age according to TurkStat, pressure is on the Turkish government to create new builds to cope with the residential demand.
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The past few years have seen a new wave of city developments springing up throughout Istanbul. This has brought about an influx of investors keen to snap up low entry deals on off-plan projects set to gain good rental rewards and rise in value quickly once complete. There are numerous developments on offer, from smaller projects in more established areas, to colossal developments with all manner of amenities throughout Istanbul’s growing suburbs. There is no denying that Istanbul is booming. Many
projects are ideal for those wanting to extend their property portfolios yet one should keep in mind that there are risks to any off-plan investment therefore caution should be taken to avoid pitfalls. It is vital to make sure that the development is viable with all its financing, legalities and necessary licensing in place. Purchasing in such a vibrant marketplace can prove a minefield without proper advice so be sure to employ the services of a good agent and some knowledgeable legal advice.
RESEARCHING THE MARKET
2 2 COASTAL TURKEY
The majority of holiday makers visiting Turkey each year do so during the summer season between May and October. They traditionally head towards well established and popular tourist resorts along the Aegean and Mediterranean coast meaning the summer months, and these areas, gain premium weekly rental returns. Each coastal region has its own unique attractions. All areas have their thriving tourist centres filled with established hotels and complexes, near beaches and/or with numerous shops, restaurants and bars on the doorstep. Villas and apartments within walking distance to the popular resorts will attract the best rental returns. Second line properties located within a few minutes’ drive or bus ride from a beach or busy
resort also gain interest providing the distance and ease of access is explained. Purchasing more unique properties in less popular areas can again attract holiday lettings providing they are marketed correctly. A property in a rural area, near a site of interest, in a traditional village or close to a golf course or sporting facility will appeal to those interested in looking for something other than a standard beach vacation. Clever advertising and highlighting the property as a ‘rural retreat’, ‘getaway’ or ‘golfing property’, etc. will attract those keen to experience this during their stay. Advertising unique properties on specialist sites has even proved to draw in higher returns in some cases. Purchasing a coastal or city rental property can be extremely profitable providing you purchase
wisely and at a good price. Oceanwide Properties is a fully accredited estate agent working on an individual basis with each client, to speak to one of our trained advisors, please contact us for an informal chat.
WHO CAN BUY A RENTAL HOME IN TURKEY? Recent changes to property purchase laws mean most foreign nationals can now purchase residential property in Turkey. The 2012 change to the reciprocal purchase law has opened up the real estate market allowing natives from more than 89 countries to secure a villa or apartments in most popular Turkish regions.
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RESEARCHING THE MARKET
What property is best to buy? Most properties in Turkey will gain a rental income either on a long or short term basis. Long term or yearly rental properties do however tend to warrant far less income per month than those in popular tourist resorts with facilities aimed at weekly holiday lets. IES
HOLIDAY LET PROPERT
By far the best weekly summer rental returns are made on properties purchased at a good price in popular coastal areas and resorts. Any tourist area will attract holiday makers, most seeking furnished self-catering properties with pools and facilities close at hand. Traditionally, your average holiday makers are either couples or families wanting either one or two bed apartments, or larger families or groups wanting to hire three or four bed villas with use of a pool within easy reach of a resort and beach. When purchasing a holiday rental property it is vital to make sure it is brought at a good price, well-built and well presented. Aesthetics are important. How you choose to present the property, its contents and furnishings, maintenance, cleaning and upkeep can prove the making or breaking of a good rental business.
The Turkish Rental Season Holiday lets tend to run through the summer season and are priced accordingly: HIGH SEASON MID-SEASON
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JULY AND AUGUST
UK/EU School holidays attract the most rental bookings and premium returns.
JUNE AND SEPTEMBER Owners can expect moderate bookings and income
LOW-SEASON
MAY AND OCTOBER
OFF-SEASON
NOVEMBER TO APRIL
Fair lettings can be achieved providing competitive pricing and marketing is employed. Rental bookings are still possible off-season, especially over the Christmas and New Year period. The rentals during this time are however few and far between in coastal areas as pools are normally drained, international direct flights are less frequent and there are far more properties advertised for let at low prices.
RESEARCHING THE MARKET
amenities nearby, and normally pay for their own electricity, gas and utilities. Long term rental requirements in coastal areas tend to come from either Turks or ex-patriots that have chosen to work or settle in a particular resort, or seasonal workers requiring furnished 1 or 2 bed apartments from April through to November. Those staying permanently will often have their own furnishings therefore require non-furnished homes. Many don’t wish to pay for maintenance or communal fees for pools or facilities and are unwilling to pay premiums for long term rental. Properties that are more traditional, older, slightly further from a resort , or without a pool or facilities attract these tenants and are usually cheaper to purchase. Longer term lets are certainly a way to own a property in Turkey and make it pay for itself whilst still watching it gradually rise in value. Permanent tenants normally pay either monthly or on a lump sum yearly basis and pay their own utility bills and expenses.
-TERM PROPERTIES FOR LONG RENTAL INCOME Those looking for monthly or yearly lets normally require a different style of property to those wanting to rent on a holiday basis. Most tend to either be Turks or foreigners already established in Turkey. Their needs differ to holidaymakers. Istanbul is the main Turkish investment area for those seeking profits from long term tenants. Many developments are aimed at attracting Turks, business people and students in need of longer lets. The majority of the projects are off-plan and will quickly rise in value on completion, some coming with rental guarantees, sitting tenants or management assistance already in place. Tenants tend to require furnished 1, 2 or 3 bed units with transport links to business districts and/or airports close at hand. They prefer facilities, shops and
>> LOOKING AFTER YOUR PROPERTY There are many rental management companies on hand to assist with the daily running of your rental property. Oceanwide Properties work with a number of partner companies along the coast that can facilitate such needs at a good price. For more on property management see page 16 or please contact us for more details.
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MARKETING AND MAINTENANCE
Ways to rent your property There are three main ways in which you can rent your Turkish property:
>> RENTAL AGENCIES Those with coastal or city properties often employ the services of local rental agents to help gain bookings. There are many agents around and they normally either charge a monthly or yearly fee, or work on a commission basis where they take between 10% and 30% of the income. It is important to do your research on rental companies and find out what services are included in their fees and how they market themselves in order to find the potential holidaymakers. It is best to try and avoid exclusive agreements unless they can guarantee a good number of weeks bookings in advance. >> RENTAL VIA WEBSITES Renting via websites can be the most profitable providing you have the time to manage client enquiries. By ensuring you have competitive prices, include a good sales description, excellent photos and reply quickly, the likes of advertising on Owners Direct, Holiday Lettings and Villa Lettings websites can prove to bring in excellent returns. Most sites charge a 6 month or yearly advertising fee in return for marketing your property and sending you direct client enquiries. Note: You will need a reliable rental maintenance, airport transfer and cleaning company in place if you are looking to organise client rentals yourself. >> RENTAL GUARANTEES A growing number of developments and rental agents are now offering rental guarantees on properties. Normally it is a sum of money paid directly to the owner for full use of the unit during rental periods. The owner is normally unable to use their property during this time. This guaranteed sum tends to be less than could be make from renting via other options, but often appeal as owners can forget about managing any bookings or enquiries themselves and simply receive an agreed income.
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>> MORE DETAILS For personalised guidance on renting your property in Turkey as either a long-term rental or holiday let contact our specialist advisors today at www.oceanwideproperties.co.uk.
MARKETING AND MAINTENANCE
Furnishing your rental property It is important to provide tenants with a good level of comfort during their stay, although this doesn’t mean you need to spend a fortune! Thinking long-term and plugging for mid-range, practical and sturdy basics that are able to withstand a good level of wear and tear is the best option. Cheaper makes and budget brands are often designed for occasional use only and rarely survive long term.
RENTAL FURNSHING TIPS >>
Furnishing rental property At Oceanwide Properties we find a little more initial outlay when furnishing a rental property can often result in longer-term savings. BASIC RENTAL FURNISHING KIT
By sticking to a natural colour palette of neutrals, creams and earth tones (think modern hotel style), your presentation will appeal to the majority of guests and look good in marketing photos. You may prefer bright wallpaper prints and patterned soft furnishings, but not everyone will share your taste possibly losing potential enquiries. Brighten up your property by buying a few bright pictures, cushions and ornaments, these add a splash of colour and bring life to rooms without being overwhelming. The following basic kit is often a good starting point for a rental home:
LOUNGE Provide enough internal seating for the advertised capacity of your home. A reasonable quality sofa set including a sofa bed and a couple of occasional chairs are a good bet. Ensure covers are washable and easily cleaned. Opt for darker colours or those made in wipe clean or washable fabrics in case of spillages. Supply a coffee table, TV (ideally with pre-paid satellite TV system or at least a DVD player) and television stand. Popular additional options include a dining table BEDROOMS and chairs, bookshelf, rug, feature wall picture or print, and a couple of bright ornaments. Good quality beds and mattresses are a must as guests won’t return if they don’t sleep well. It’s N HE worth spending a little more on these rather than KITC simply opting for cheap or well-used seconds. Kitchen needs vary dependent on the property. Invest in sturdy bedframes, preferably with storage A simple holiday studio requires far less than a underneath, and mid-quality firm mattresses that property advertised as a luxury villa let. Important will last. Keep in mind statistics show the majority basics include a fridge/fridge freezer, oven (or at of renters are either couples, therefore provide a least a hob), kettle, toaster, washing machine and double/king bed if a one bedroomed apartment, microwave (optional). Regarding crockery, provide or a family, therefore a double plus a twin room is enough plates, dishes, cutlery, pots and utensils for preferable. Some bedframes are now designed to your maximum capacity plus a few extras. connect, although more costly, these are a good idea as you can change from a twin to a double
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MARKETING AND MAINTENANCE
Furniture price guide BASIC (£)
MID-RANGE (£)
QUALITY (£)
2 BED APART/VILLA
5,000-7,000
7,000 - £9,000
9,000 - 11,000
3 BED APART/VILLA
7,000 – 9,000
9,000 - 11,000
11,000 - 13,000
BATHROOMS Keep bathrooms simple and clean. Ideally your bath/shower room will be fully tiled so easy to clean. In most cases there is no need to add additional furniture. Towels: one bath towel and a hand towel per person are normally displayed with an additional set found in the wardrobe and extras stored away for changeover. Beach towels are sometimes provided to prevent guests soiling house towels and using them away from the property.
OUTDOOR A terrace/balcony table and chairs and enough sun loungers for your guests should be provided. To indicate ownership, many choose to mark their sun loungers with a permanent, waterproof marker with the property name if they are to be used in a shared complex. The provision of a terrace BBQ is also a popular option.
CLEANING easily, dependent on your guests. Each room should also contain a wardrobe and bedside tables. A dressing table and a mirror with a hairdryer is usually provided in at least the master/main bedroom and all beds are neatly dressed on guest arrival. Linen: It is normal to make the bed with mattress and pillow protectors, fitted sheet, flat sheet, pillows and light cover during the summer months. Depending on the frequency of cleaning you provide, most usually supply a spare set of linen in the wardrobe along with a spare pillow and blanket in-case they are required. At least one or two additional sets of linen are needed per bed to allow for cleaning during quick changeover dates.
Provide guests with a few basic cleaning products (kitchen spray, washing up liquid, polish and cloths), a mop and bucket, broom/hoover and dustpan and brush. This helps them maintain your property throughout their stay. In addition, supply an iron and clothes drying rack so they can do their laundry. >> PERSONAL SHOPPING SERVICE Oceanwide Properties provide a FREE personal shopping service for clients. Our Personal Shoppers know the area, the best shops and can organise discounts in stores for clients in most cases. Call us to arrange an appointment.
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MARKETING AND MAINTENANCE
Marketing your property Years ago, furnishing and marketing your holiday rental property was easy. It didn’t so much matter what it was furnished with as long as you included the necessities, they were practical and did the job. Those were the days where agents handled the majority of the lettings for you and simply supplied clients to the door. But times have changed and now there’s the internet! The way in which many people now book holidays has changed. Although some do still pop along to a travel agent to book a vacation, the majority now turn to the web in search of the best rental properties and holiday deals. People read and trust review sites like Trip Advisor so you need to be careful to always present and organise your property, and the renter’s holiday experience, correctly. Online competition is fierce so it’s vital to market your rental property well either via an agent, or yourself on dedicated holiday rental websites. Remember, people searching the internet will click on the attractive, not the dark shots taken off season with the pool drained, clutter and a stormy sky! Suleyman Akbay, MD at Oceanwide Properties says, “more clients are now purchasing buy-to-let properties and many more holidaymakers are now booking self-catering vacations. It is vitally important to present your property well to attract potential clients from the net. Clean, crisp photos taken on a sunny day, clutter free shots of well-presented and decorated rooms, neatly placed towels on beds and well maintained pool and garden shots will showcase your home at its best. That coupled with competitive pricing, a full and detailed description, local area information, and details on any special offers you wish to run will all produce enquiries and ensure you are ahead of the game.”
TAKE GOOD PHOTOS >> Use a Digital Camera. Digital cameras are the easiest way to take good photos and upload them onto a computer or the net. Some choose to use or borrow fancy cameras, but a simple point and shoot auto focus is just fine. Take lots of photos of each room and area from a variety of angles, you can always delete those you don’t need later. When sending your property to a letting agent or website, do not condense the photos to ‘thumbnails’. Although you may be asked to make your pictures smaller, always
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keep a set of the larger versions as some sites ask you for better quality images for their marketing. >> Exterior Photos: Take at least one main exterior and a few good ground shots of your property looking its best. Choose a clear sunny day to take photos. Clear/ hide toys and clutter from the grounds, balconies and pool and place sun-loungers and outdoor furniture in an attractive manner. Ensure your grounds are manicured; grass is cut, shrubs and trees tidy and pool side tiles clean. Maybe place a bowl of fresh fruit/flowers or a bottle of wine and a couple of glasses on your patio table. Keep other people out of shot and snap a few photos from different angles. You can choose which to feature later. >> Interior Photos: Clear all rooms of clutter, make the beds, dust surfaces and mop floors. Clear your bathrooms of toiletries and kitchen surfaces of food, dirty crockery, crumbs, packets and bins. Stack guest towels on each bed (how you would find them in hotels) and ensure that curtains are open and there is enough light in the room. Place flowers or bright ornaments in strategic places to add a splash of colour and create interest to table tops, book shelves etc. Clear rooms of people and pets. Take photos from each corner of each room so you again have a good choice of shots later.
MARKETING AND MAINTENANCE
Divide into sections and paragraphs to make for easy reading. Sections should include:
>> Area Photos: Although you know the area, future guests may not. Take some good photos of nearby attractions, resort centres, beaches, historical sites, parks etc – anywhere you think that your guests may enjoy visiting. These shots need to be clean, clear and taken on a sunny day. Note: Include as many good photos as possible in your online advertisement and make sure all are titled correctly. Potential renters are keen to look at as much information as possible before parting with their hard earned cash. Properties featuring a good selection of photos will receive far more enquiries than those with just a few!
WRITE THE BEST PROPERTY DESCRIPTION Just as good photographs are vital, good property descriptions are also fundamental in gaining enquiries. Although many online rental portals walk you through the process and have specific formats they wish to be filled in, for those creating their own copy, our marketing team have come up with the following pointers to help attract maximum returns: >> A Catchy Hook/Headline. A short, punchy headline is the first copy future renters will see so make an impact! Be descriptive and to the point using the property and its location, or a specific highlight as a hook eg: “Luxury 3 Bed Private Villa with Pool Just 5 Minutes’ Walk from the Beach”, “Spacious 3 Bed City Centre Marina-view apartment”. >> Main Copy: Ensure your advertising copy is descriptive, enticing and informative.
• Property Overview: A short paragraph describing the basics of the property, its key features, the maximum capacity and its location. • Property Highlights: Normally best bullet pointed, a few of the main attractions of your property e.g. spacious bedrooms, sea views, private pool, walled gardens, private parking, 5 minutes’ walk from resort centre, 30 minutes from the airport. • Main Description: Describe the property in detail. It is often best to imagine walking through the property from the entrance and writing briefly about each room you encounter in turn. Alternatively, list the floors and rooms writing a short description of what is included under each listing. Remember to mention number of beds, bathrooms, balconies, if the TV has English speaking channels, if there are mosquito nets, air-conditioning, solar panels, security boxes, hairdryers, hand and beach towels included etc. • Property Location: Provide a brief description on the property’s location including the distances from the airport, beach, attractions and main resort. Describe the land it lies on i.e. if it is in an elevated position surrounded by mountains, a flat location close to the beach, or on a narrow city centre street moments from a landmark. It is also a good idea to list a few local attractions, activities, sports or sites worth visiting. • Property Inclusions/Exclusions: A short paragraph stating all that is included and excluded from the stated rental price. Typical inclusions may be use of all villa facilities, air-conditioning, electricity, BBQ, communal facilities (list those that are free to guests), hand and beach towels (number provided per person), maids service (when and how many times per week) etc. Exclusions often include airport transfers (if so state how much they are and if you can arrange), welcome packs of food/goods (again state price and what’s included), use of paid shared facilities (gyms, saunas, beach shuttle services etc.).
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MARKETING AND MAINTENANCE
Rental property maintenance Maintenance is a core component in the smooth running of any rental property. There are now many companies supplying full rental management and maintenance assistance at varying prices. The cost is entirely dependent on the type and size of your property, your requirements and needs.
PRIVATE VILLAS
Those purchasing private buy-to-let villas need to ensure that the pool, all its necessary chemicals and the grounds are maintained daily during rental
periods. Additional house cleaning, airport transfers, key handling and emergency care services are usually provided at additional cost.
APARTMENT AND VILLA COMPLEXES
Most apartment blocks and complexes with communal facilities will already have basic maintenance contracts in place that are normally paid yearly. Additional cleaning, rental management and upkeep of the interior of your home is normally arranged separately and paid on an individual basis.
>> LOCAL MAINTENANCE SERVICES Oceanwide Properties has partnered with a number of companies in the areas we serve which we believe offer clients superior rental services, cleaning and management at a good price. Please contact us today for full details at www.oceanwideproperties.co.uk.
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FINANCE AND LEGAL ASPECTS
Legal aspects of letting a property in Turkey The Law on letting property in Turkey is fairly relaxed, with no set minimum terms and conditions imposed by central government. We’ve caught up with the legal owls at Contact Law to give you the low down on key aspects to be considered. >> SETTING RENTS
Tenants are obliged to pay the rent, pay any service charges and stamp duty, use the property appropriately and to pay for damage caused by them. They are also compelled not to sublet the property unless by agreement with the landlord or to make structural changes without consent. Eviction in Turkey can be done in several ways. If the tenant agrees to vacate a property they must do so with a promise to vacate drafted by a lawyer. Any commitment to leave made at the time a lease is drafted is invalid. Other reasons to evict a tenant in Turkey >> PROPERTY LEASES include where a landlord needs the property From 1 July 2012 there has been a new law on property leases, known as the ‘New Turkish Code for themself, where the property requires major renovation or repair, if the property is sold, for of Obligations’ or TCO. The key term of this new non-payment of rent, subletting without permislaw is that tenants are automatically entitled to remain in a property for another year unless notice sion, and failing to maintain good relations with neighbours. These evictions come with additional is given within 15 days of the end of the tenancy terms, so that where a property is reclaimed for a agreement. Typically your property agent will deal with the legal particulars of renting out your landlord’s own use, they are then prohibited from renting the property to another person for three property. They will have standard lease years. agreements you can use, and will collect the necessary stamp duty that the tenant must pay at Beyond the above aspects that need to be borne the beginning of the lease. The agent should also in mind, individuals and their housing solicitors are essentially free to agree whatever terms they conduct an inventory. wish for the property rental. Rents and increases are negotiated between landlord and tenant, but the tenant can challenge any rent increase they feel is unfair in court. The court assesses the value of the property based on an expert report and the current market rents in the area in question. In this way, rents are well and fairly controlled. Deposits are commonplace in the Turkish rental market, and are returnable unless the property is damaged. Typically these are set at a few months’ rent.
>> OBLIGATIONS AND EVICTION
There are few specific legal obligations on landlords in Turkish law, however the landlord is required to ensure that a property conforms to a ‘minimum standard’, which generally means that it should have running water and a heating system in working order. The landlord is legally obliged to fix the property so that it meets such standards.
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FINANCE AND LEGAL ASPECTS
Rental tax in Turkey Unfortunately, the taxman in both Turkey and your native country will want his fair share of profits from your rental property. This can sound daunting but is fairly straightforward in most cases. First it is important to check what you will need to declare in your own country. For example, for a UK resident you must declare any income derived from a rental property abroad to the HMRC. This should be done on the foreign pages of your tax return. If you are also paying taxes in the foreign country, allowances are normally made and credits can be gained against the UK tax. Similar systems are in place in other European and International countries, seek a knowledgeable local account or taxation advisor for more details.
TURKISH TAXES TO ACCOUNT FOR: • Income tax (KDV) on rent • Stamp Duty when you buy your property • Capital Gains Tax when you sell (only applicable after one year of ownership if new-build)
TURKISH TAXATION Under Turkish law, any income made in Turkey by residents or non-residents is subject to Individual Income Tax with rates worked out on a progressive scale: TAXABLE INCOME (TL)
TAX RATE (%)*
Up to 10,700
15
10,700 to 26,000
20
26,000 to 60,000
27
60,000 +
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* Figures correct at time of publication. For current information please ask one of our consultants or a legal advisor.
Net income from rental properties in Turkey are subject to income tax however, if the property is registered and let out as a private residence rather than a commercial concern, the first 3000TL is usually tax exempt. There are two main ways to work out how much tax is owed. These are the Lump Sum and Actual Deduction methods.
Lump Sum: This is the easiest way to calculate tax owed, one simply deducts 25% of the gross rental income to arrive at the taxable sum. Actual Deduction: A more traditional method, whereby 5% of the acquisition cost alongside real expenses including heating, water, electricity, insurance, depreciation, repairs and administrative costs are deducted from the gross income.
SEEKING ADVICE Buying a property is one of the biggest investments any individual will make. Choosing a qualified estate agent knowledgeable in the local market of your intended buy-to-let is vital to ensure you are appropriately guided. Here at Oceanwide Properties our experienced staff are here to do just that. Contact us today to request a no obligation consultation at www.oceanwideproperties.co.uk.
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FAQs
Frequently asked questions Setting a rental price, taking and managing payments, key holding and cleaning – a selection of our most commonly asked questions. How do I make sure guests look after my rental home?
>> If organising rentals yourself, it is a good idea to speak to prospective clients and build a relationship before accepting a booking. Making sure all those renting your home pay a security or damages deposit also goes some way towards ensuring guests respect your property and its contents. It is normal to ask for between a ÂŁ100 and ÂŁ300 dependent on the property to be paid prior to arrival and refunded on departure, should there be no damage or breakages. It is a good idea to make sure cleaners report any damages, and a set of house rules including an emergency number is left on display for guests to read on arrival.
How often do guests expect the property cleaned and who do I get to do this? >> Rental property cleaning services are normally supplied via local maintenance or rental management suppliers. All guests expect the property to be spotless on arrival. Most owners include a weekly clean seven days following arrival (for guests staying over seven nights). Cleaning services can work out expensive so some owners mention mid-week or daily cleans as optional extras that can be arranged for an additional cost and supply basic cleaning products in the property for daily use.
How do guests pick up the house keys?
>> There are various ways to get keys to guests. Some owners pay the rental management company for a meet and greet service, others a friend or neighbour to do the honours. Many supply keys to their preferred and trusted airport transfer driver, and others opt to purchase a key safe (small security box containing the key with combination code or pad) firmly fixed outside the property in a place the guest can find on arrival.
What should I charge guests for rent of my home?
>> This is entirely dependent on the type of property you have, its location, facilities, size and the time of year and length of time the guests are wishing to rent. The best idea is to have a search on popular rental sites like Owners Direct or Holiday Lettings for properties similar to yours and base your weekly charges accordingly.
How to I make my property stand out from the rest?
>> Put yourself in the mind of your guests and imagine what would appeal to you. If you are aiming the property at families, the provision of a high chair or travel cot would appeal, as might a few safe and sturdy toys kept in a box to
>> QUESTIONS? Speak to one of our specialist advisors by phone or chat live on our website at oceanwideproperties. co.uk.
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FAQs
be used should guests want to. Other ideas include adding a few welcome touches like free tea, coffee, sugar, a bottle of water and a carton of milk in the fridge. Maybe suggest you can supply a welcome bouquet of flowers, bottle of wine or chocolates for romantic breaks at a given price, or a pack of essential groceries for a small extra cost. Advertise discounts or a free service for early bookings or to entice guests during early or late season, and maybe an incentive for return guests. Any little extra that either saves guests money or makes them feel special will go down well and should place your home apart from the rest!
Do I need to split guest rental payments into instalments?
>> Many of those booking summer holidays will do so well in advance, especially if wanting dates during high season (July and August). Some are happy to pay for the entire holiday in one go, others will want a instalment options if booking over two months’ in advance. In these cases it is normal to ask for a deposit of between 20% to 30% to secure the booking, the remaining sum to be paid between six and eight weeks before arrival. Make sure you confirm in writing when all payments are due and received.
What are the best ways to take payment from guests?
>> If you are organising bookings yourself you should keep in mind that many guests will be nervous about paying sums of money to a private owner or someone they don’t know. You need to make sure that all your price quotes and correspondence with potential guests is in writing or email firmly stating sums owed including dates payments are due if split into instalments, the length of time and dates this will cover, arrival and departure times and information, and the method of payment agreed. Most opt to accept payments via direct bank transfer, Pay Pal, or take personal cheques. Try to avoid payments via cashiers cheques or money orders as these methods are favoured by scammers.
What refund policy should I include?
>> Potential guests will expect a refund if they need to cancel their booking well in advance. Most owners normally employ a sliding scale whereby all but 10% of sums paid are refunded if a booking is cancelled over 2 months before arrival, 75% refunded between 6 and 8 weeks, 50% between 4 and 6 weeks, 25% over 2 weeks and no refund if a booking is cancelled within a fortnight of arrival. Any security deposits or costs for additional items should be refunded in full.
What are normal guest arrival and departure times?
>> You need to state arrival and departure times on your advertising as well as in writing on booking confirmation. Changeover takes time so you need to ensure that cleaner are reliable and have ample time to clean your property. It is normal to apply a hotel policy allowing guests to check in mid-afternoon and depart by 12 noon. If you wish, you can state that late departures may be available if organised in advance and dependent on your next guest’s arrival time.
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ESSENTIALS SERIES
Also from Oceanwide Properties Turkey Property Buyers’ Guide The first in our series of guides walking you through the buying process from initial enquiry through to completion and receipt of your TAPU (Title Deeds). This essential guide is aimed at anyone wishing to take the first steps in buying a property in Turkey Turkey Property After Sales Guide An essential guide to everything you need to know once you’ve successfully purchased your Turkey property. A wealth of info on everything from organising the transport of your pets and furniture from the UK, to applying for Turkish residency, setting up utility connections, purchasing a car, organising health insurance and day to day life and living in Turkey.
Launching Soon Turkey for Property Investment Oceanwide Properties’ Essentials Guide to investing in property in Turkey. An in-depth look into the main areas for property investment along the coast and Istanbul. Facts, figures, the whys and the where to invest questions answered. Istanbul Property Investment Your in-depth look into Turkish property opportunities in and around Turkey’s fastest growing and most vibrant city. Containing essential investment information, popular locations, facts, figures and project overviews, it is an informative read for anyone looking to invest in the Istanbul area. Selling your Turkish Property So you’ve bought a home in Turkey but now you want to sell. This Oceanwide Properties Essentials Guide will set you on the right steps to a successful sale. Offering tips and advice on applicable laws and taxes, deciding a price to sell at, the selling process and how to present your home to its best advantage. An essential read for anybody thinking of bringing their Turkish property to market.
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ABOUT OCEANWIDE PROPERTIES Oceanwide Properties has been helping clients successfully secure properties in Turkey since 2005. With a UK head office in London, and a Turkish Headquarters overlooking the bay of Fethiye in Turkey, we are a fully registered and accredited overseas estate agent at the forefront of our profession. Oceanwide Properties are specialists. We only deal in what we know best – Turkey. We offer a no-nonsense friendly approach to Turkish property sourcing, investment, sales and consulting. With fully trained multilingual staff, a modern and constantly updated website, and excellent client support services, we deal with all our customers on an individual basis based solely on their needs, budget and requirements. For further assistance, our fully trained team are on hand to advise you and please don’t forget to check out our website for up to date property listings, special offers and current news and property reviews.
CONTACT US
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+44 (0) 207 4247 892 (UK) +90 (0) 252 6149 174 (Turkey) www.oceanwideproperties.co.uk
ESSENTIALS SERIES
Guide to Renting Property in Turkey NEW! The third in a series of Turkey Essential Guides produced by Oceanwide Properties. Whether you are simply dipping your toes in the water or looking to expand your property empire, our guide is here to put your mind at ease when considering the opportunities of buy-to-let in Turkey. It answers many common questions surrounding rental issues and includes information on where to focus your rental property search, what type of property to look for, buying furniture for a rental property, how to organise property maintenance and cleaning, taxes and how to effectively advertise and market your home in order to gain maximum lettings and financial returns.
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www.oceanwideproperties.co.uk