Turkey constantly makes headlines in Western media in a very negative light. I tried to offer a more balanced view in my first article on Turkey, which is in many ways a prequel to this one (Is investing in Turkey viable?). Making a real estate investment in Istanbul, Turkey, is easy with all these agents selling flashy new developments online. But is this the best way to go about it?
We’ll have a look at the following:
- The general state of the real estate investment market in Istanbul, Turkey
- The number one trap you should avoid when making a real estate investment in Istanbul
- To make money in Istanbul real estate, invest like a Turk
- Investing on the European or the Anatolian (Asian) side of Istanbul?
- Which neighbourhoods to invest in on the European side of Istanbul?
- A case study of a real estate investment in Istanbul
- A video case study of a real estate investment in Istanbul
- Free Turkish passport
- Real estate taxes in Turkey
- My buyer’s agent in Istanbul
1. The general state of the real estate investment market in Istanbul, Turkey
The first worry is obviously the Turkish Lira/USD exchange rate.

What is fascinating is that real estate prices have actually been beating inflation in real terms.

Up to now, following years of decline in prices due to deleveraging, the Turkish real estate market is in upswing again as people see real estate as their best hedge against rising inflation rates.
What this graph does not show is that prices are rising even in USD terms.
The reality is that as a Turkish saver, you are better off having local, affordable real estate in your portfolio than USD in a bank, especially with inflation raging in the US and now sitting at 8%+.
Turks’ thinking on inflation has evolved. As the USD is decreasingly a store of value, they might as well own local real estate and collect rental income.
Demographic pressure adds to the appeal of this market. Istanbul is currently home to 15 million people, and is expected to grow strongly over the years thanks to positive nationwide demographics and urbanization. According to the World Bank, Turkey’s fertility rate is approximately 2.1 children per woman. This compares very favorably with its arch-enemy Greece that stands at a rate of 1.4 children per woman.

2. The number one trap you should avoid when making a real estate investment in Istanbul
I have to start with this, as it’s common for foreigners to get played this way. You found some great real estate websites; the salesman speaks perfect English, offers to pick you up at the airport, and pitches you a bunch of developments with flashy brochures, rental guarantees, and promises of high future returns.
Run away. You’re about to get fleeced!
I did this video with a friend of mine where we posed as foreign buyers in Istanbul and let such salespeople take us for a ride.
You can see for yourself that you need to be extremely cautious if you want to make a real estate investment in Istanbul.
3. To make money in Istanbul real estate, invest like a Turk
Locals know that many of these developments are overpriced. The reality is that the best deals are to be found on the secondary market. You want to buy a secondhand property in a thriving neighborhood and preferably renovate it up to Western standards. This is how you will likely obtain better yields and capital gains, thanks to the renovation work. But remember that you need to think like you were born here. So, if you want to make profitable real estate investments in Istanbul, you have to be one of them and think like a Turk.
There are two ways to play the market.
- You can buy top-notch real estate with a view of the Bosphorus. Once the economy improves again, these prime-location apartments will be the first to jump in value. However, expect low gross rental yields of about 2-3%.
- You buy in up & coming areas close to high-end neighborhoods. This way, you get higher rental yields (double), capital appreciation if the area continues to gentrify, and general appreciation if the overall market improves (though less than prime location).
4. Investing on the European or the Anatolian (Asian) side of Istanbul?
Istanbul is famously cut in two; the Asian side and the European side. Though both sides are growing, many more of the major catalysts are on the European side.
- The new Istanbul airport which was launched in 2019 is the world’s largest. It is located deep in the European side.
- A massive new Canal will be built to replace the Bosphorus as a shipment route. About 48,000 ships pass through the Bosphorus every year. The result is overcrowding, and huge environmental risk. To reduce risk, and increase revenue, Turkey plans on creating a new canal on the European side.

These two projects are a massive draw for jobs, further infrastructure development, logistics hubs, manufacturing, etc.
It’s not to say that there is no dynamism on the Anatolian side, because there is action there as well. For example, a large international financial center is being built that side, which include the Turkish Central Bank, the main banking regulator, as well as the headquarters of a few of the major public and private banks.
While this is encouraging, the two other projects are massive and catalyze more economic activity. I’m not saying that there are no pockets of good investments on the Anatolian side, just that I see a clearer story on the European side.
5. Which neighbourhoods to invest in on the European side of Istanbul?
First step, look at the seismic map and avoid any area that is dark red. Every homeowner MUST get earthquake insurance, so at least you are somewhat covered if this were to happen. Traditionally, when there are earthquakes in Turkey, it’s buildings of poor quality that collapse. Buildings from the 1960s and earlier are sturdier than the average and better withstand such unfortunate circumstances.

Also, having been all over the European part of Istanbul, I would avoid the outer districts. I am not interested in buying in rows of new-built blocks that will look awful in 10 years, especially as they do not come at a discount to near-prime locations in the center of European Istanbul.
This leaves us with the historical core center of Istanbul.

- Taksim, Cihangir, Galata: Very touristy, but many locals live here as well. Bars, clubs, artistic area. Moderate prices and moderate yields.
- Sultanahmet (right part of the red circle): This is where the famous Hagia Sophia is located. It’s a very touristic area with lots of Airbnbs and not very desirable to locals. Overpriced.
- Besiktas: Local, middle class, and for some reason low yields even though prices are not extremely high.
- Nisantasi and Macka: Premium area. Nice hotels, restaurants, high ends shopping and bars. Low yields.
- Kurtulus, Bomonti, Osmanbey: Local up & coming areas. Originally working class but rapidly gentrifying. Low prices and high yields
6. A case study of a real estate investment in Istanbul
This loft apartment is quite interesting. It is in Sisli/Osmanbey, a nice area on the European side. Its particularity is that it is located on a street of textile workshops. So during the day it is lively, though not noisy, and in the evenings it is extremely quiet, yet a two-minute walk away from all the trendy, upmarket bars. There’s a certain cachet to this area.






This 90m2 apartment all-in (including furniture), would cost about TRY 1,900,000. It would rent out for approximately TRY 8,000 per month long-term, which is a gross yield of 5%.
Rent TRY 8,000 x 12 (gross yield 5%) | TRY 96,000 |
Vacancy of 5% | TRY 4,800 |
Maintenance 5% (low because newly renovated) | TRY 4,800 |
Management fees 10% | TRY 9,120 |
Property tax of 0.2% (based on a lower value of 1,700k) | TRY 3,400 |
Income tax (let’s use a rough average of 15% for one apartment) | TRY 11,080 |
Net, net yearly after tax income | TRY 62,798 |
Net, net yield | 3.3% |
You’ll have to factor in seismic insurance, but the sums are negligible. One of the great advantages of making a real estate investment in Istanbul is that the landlord does not typically pay to find tenants. It’s the other way around; tenants pay the agents to find them an apartment. Also, the building common charges are paid for by the tenants. Importantly, tenant demand is strong, so finding a new tenant typically takes a week or so.
If you own more rental property in Turkey, then expect to pay a higher income tax rate.
7. A video case study of a real estate investment in Istanbul
Watch this video that I did with Keith, my buyer’s agent in Istanbul. He takes me through one of his renovation projects, and mentions all the numbers including renovations costs and gross rental yields.
8. And you can even get a free passport out of it
If you buy $400,000 or more of real estate in Turkey, you, your spouse, and your children below the age 18 are entitled to Turkish citizenship. It’s a great plan B, and not a bad travel document. I wrote this article which details the Citizenship by Investment programme in Turkey, its timelines, exact fees, and traps to avoid.
9. Real estate taxes in Turkey
Personal income tax rates vary from 15% to 40%. If you invest the minimum amount for citizenship by investment, make a gross return of 5%-6%, and then deduct all allowable expenses (most), you will probably pay about 20%.
You can read more about my International Tax Consulting for more information.
There are no capital gains taxes if you hold real estate for five years or more. If you sell it beforehand, the capital gains taxes get added to your yearly income (after a TRY 18,000 deduction), and taking CPI indexing into account. In reality, these capital gains taxes are minimal.
There is an annual property tax of about 0.2% of the assessed value for real estate in Istanbul, which is lower than in most Western markets.
Finally, there is about 4% in stamp duty charges when you purchase real estate in Turkey. In many cases this 4% is divided between the buyer and seller, but in many cases it isn’t. It comes down to the negotiations that take place when sealing the deal.
There is VAT in some circumstances, but it doesn’t apply to foreigners’ first real estate investment in Turkey. In most cases it can be avoided especially if you buy in the secondary market.
10. Keith can help you with your real estate investment plans in Istanbul, Turkey
Keith is my friendly buyer’s agent from Nova Scotia. He’s been living for many years in Turkey and serves as a buyer’s agent. You provide him with a brief, and he seeks out properties that fit your investment needs.
He can also put you in touch with the proper legal team to help you with your citizenship application. Keith is experienced so you don’t have to worry about your real estate investment in Istanbul; you are in good hands!

You can find out more about Keith’s Istanbul buying agent and renovation services here.
If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.
Subscribe to the PRIVATE LIST below to not miss out on future investment posts, and follow me on Instagram, Twitter, Linkedin, Youtube, Facebook, Rumble, and Odysee.
Other articles on Turkey:
- Making a real estate investment in Izmir? A value play within Turkey
- People received a free citizenship AND made money – This is how
- Don’t fall for this Real Estate and Citizenship trap in Turkey
- I bought an apartment in Istanbul
- Investing in a city of 15 million, with decent yields – and get a free passport
- One of the world’s easiest second residency programmes -Turkey
- Citizenship by Investment in Turkey, its timelines, exact fees, and traps to avoid
- Are all new buildings in Istanbul a bad investment? Istanbul Real Estate December ’21 update
Available services in Turkey:
My favourite brokerage to invest in international stocks is IB. To find out more about this low-fee option with access to plenty of markets, click here.
If you want to discuss your internationalization and diversification plans, book a consulting session* or send me an email.
*a consulting session is a discussion about your portfolio and objectives. It does not constitute legal, financial, tax or investment advice.
What is the potential and what are the yields of the Airbnbs you mentioned?
Very nice analysis 🙂
I didn’t check, lockdowns are not conducive to doing a good Airbnb analysis 😉
Great insight! I have spent several months in both Istanbul and Kyiv in the past year and noticed that you have done analyses on both these markets. Really like the Osmanbey and Bomonti areas. What are your thoughts on Istanbul vs. Kyiv if you could only allocate capital to one?
Hello Larry, great!
The two cities serve very different investment objectives. It really depends on your personal situation.
Hi, Maurice. Thanks for these helpful articles. It was so hard to find information about the VAT online and several brokers wouldn’t answer my questions about it. It’s good to know that the VAT doesn’t apply to a foreigner’s first real estate investment here in Turkey! Is this regardless of paying in full(cash) or via a mortgage?
Hello Julie,
As far as I know it doesn’t matter. Feel free to ask Keith for a more definitive answer though. Be careful with mortgages in Turkey, interest rates can vary wildly. Happy house hunting!
Good article.
What’s the best area to buy and airbnb? And the average % return?