This is how investors can earn millions
Last Updated: 2023-07-27
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This is how investors can earn millions
Investment means the purchase of valuable assets, called capital assets, which the investor buys based on expectations of either:
- Its value increases over time.
- Or the conviction that it will provide a new source of income.
- Or it achieves both, that is, its value increases over time, and it provides a new source of income.
- Its value increases over time.
- Or the conviction that it will provide a new source of income.
- Or it achieves both, that is, its value increases over time, and it provides a new source of income.
The success rate of investment may vary from one country to another, depending on the economic and political conditions of the country. But the criteria for investment success do not differ significantly from one country to another. In Turkey, for example, many Arab investors have surprisingly succeeded in real estate investment, and in return many of them did not achieve a feasible return on investment. The reason is always due to choosing the investment site and does it achieve the ideal standards or not?
Some believe that the most important criteria for successful investment in Turkey are the government services that are provided in the region, such as “hospitals, schools, a government network, advanced transportation, centers and markets...etc.”
These investments are undoubtedly good and represent financial returns for them from 3-7% of the property value annually, but they are certainly not the best. In Turkey, the criteria for successful investment are those related to the regulatory plans of the state, meaning choosing a site within the framework of a regulatory scheme within a short-term government plan, in which the value of real estate has increased by more than 800% during the past years. These organizational plans are divided into two parts:
- The first section is called in the Turkish real estate market the 1/5000 scheme (the initial construction planning schemes)
It is a scheme that includes organizational areas, but it will pass through several stages (designs - objections - modifications). At this stage, the price of real estate is relatively cheap and can increase in a "crazy" manner. For example, Arnavutkoy and Çatalca are mostly considered within the 1/5000 scheme, and by the way, the value of real estate in some Arnavutkoy districts has increased by more than 800% over several years. During the stages that the organizational charts will go through, the shape of the chart can be modified more than once, before the chart is settled on its final form.
- The second section is called in the Turkish real estate market for a dictionary of real estate terms with a scheme of 1/10000
It is the final image of the 1/5000 scheme after it goes through all the stages (designs - objections - modifications). At this stage, the price of real estate is higher, but it can be increased. Among the areas that fall within the framework of this scheme in Istanbul are "some sections of Arnavutkoy - some sections of Riva - and areas in Silivri."
To make the picture clearer, we can compare two investors who invested in Turkish real estate in 2016:
- The first chose an apartment in Fatih (an area in the center of Istanbul that contains all government services) worth 200 thousand dollars with an investment return of 6% of the property value annually. After 5 years, profits will be $60,000
- The second investor chose a land worth 200 thousand dollars in the Arnavutkoy area within the 1/5000 organizational scheme. The value of the land has increased to reach its price in 2021 to more than one million US dollars.
The question is: Did the second investor make profits by chance? The answer is certainly not a coincidence, although the profits exceeded his expectations. But the essential difference between someone who chose a profitable investment and an investment that achieves wealth lies in dealing with a real estate consultant who is able to read real estate market developments and has experience in organizational schemes that achieve the highest possible profits.
Now we will return to the regulatory areas, suppose that an organizational scheme was issued based on a huge project, (Arnavutkoy scheme based on the Istanbul Canal project, for example) and the project was not implemented (the Canal project was canceled for some reason), will the investment be a loser?
In this case, which reflects the worst-case scenario, the investment will maintain its value without loss, because it is within an organizational scheme that has already been issued, but it will not achieve those very large profits, and this is what is known as a safe investment in the worst-case scenario.
About investing in Turkish regulatory schemes, Mersat Real Estate, through its consultants and experts, has prepared a study on the most important investment sites in Istanbul, which they can view by contacting us.
Editing by Mersat Real Estate Team©
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