Tranio’s client experience of buying an apartment in Istanbul for relocation and capital protection
Vladimir recites how he and his wife have managed to pass under the old rules of Turkish citizenship by investment programme at the very last moment before the minimum threshold has been increased from 250,000 to 400,000 US dollars. For them, Turkish citizenship is more than an opportunity to get an alternative passport, and a Turkish apartment is more than a way to protect their capital. They are seriously contemplating relocation and a job change. Read Vladimir’s story to learn why the family have chosen Istanbul and what apartment they have managed to find with our help in just two days of searching.
My wife and I have been thinking about spending our savings on housing abroad for a long time. Although this goal was not tangible enough to take concrete steps, we often read articles and studied other people's experiences. I distinctly remember one of Tranio's cases about a Russian investor, who bought 3 profitable apartments in Athens and received a residence permit in Greece. This year, everything has changed and all has become clear.
Firstly, there suddenly was a need to invest our savings. In March, no one knew what would happen to the banking system, where the restrictions would take us, and what would happen to our capital if we left it in bank accounts. Moreover, these restrictions had already started to have a negative impact on us: like many others, we had invested in shares of foreign companies. To this day, the fate of these investments is unknown; some of our funds are stuck on the brokerage account: seemingly there, but without an option to withdraw.
Secondly, it was unclear what would happen to the economy and how the upcoming changes would affect our work. Thus, we decided to find ourselves a second home to protect ourselves, since we had such an opportunity.
Thirdly, we wanted this second home to be in a country where we could immediately obtain citizenship or, at the very least, a residence permit. In March, all EU immigration programmes for Russian investors had already been suspended, leaving only Turkey, which offered not just a residence permit, but a second passport. The amount of investment in real estate needed for that was relatively small back then as far as golden visas went — only 250,000 US dollars. After 13 June, the rules for investment citizenship in Turkey for the purchase of real estate have changed: the minimum threshold has increased from 250,000 to 400,000 US dollars.
Since we were considering relocation and possibly a job change, we chose Istanbul. When transport links and trade relations between countries were disrupted, Istanbul became an international air hub for flights and increased its importance in international business. My wife is currently working in the management of a wholesale company, so we hope that with her extensive experience and the knowledge of English, she can easily find a job in Istanbul even without speaking Turkish. As for my work, nothing threatens it so far, because the specifics of my marketing company allow me to work remotely from any place in the world. We are ready for this radical change in our lives, which is why we have decided to buy an apartment in Istanbul.
Completion in: 2023 Total of 1441 apartments
Built in 2022 Total of 467 apartments
Completion in: 2024.IV Total of 462 apartments
Istanbul has been experiencing a growth in population lately at an unprecedented rate. From 2016 to 2021, the city's population has increased by a million people. In 2021 alone, Istanbul grew by 378,000 people due to internal and external migration to 15.8 million (according to the official statistics based on address registration data). The city attracts more and more foreigners each year. There were 451,000 foreign citizens living in Istanbul in 2020, and 741,000 — in 2021. In addition to citizens and foreigners with Turkey residence permits, there are many tourists in the city during any season. In the pre-COVID year of 2019, almost 15 million tourists visited Istanbul.
In 2022, transactional and logistical restrictions imposed on a lot of countries, participating in international trade, attract companies from other countries to Istanbul. The Turkish authorities contribute to this as well. For example, the Istanbul Financial Centre (IIFC) was opened in July 2022 with a goal to accommodate public and private sector banks, international asset management companies, brokerage firms, insurance companies, professional service companies, and Turkish and international financial institutions. A preferential tax regime has been set for the IIFC, which will make it a regional financial centre in the short term and a global centre in the medium term.
High inflation and the unstable exchange rate of the Turkish lira did not worry us too much: we knew that real estate prices in Turkey were usually denominated in dollars or euro. Additionally, our income was not tied to the Turkish lira. There are even advantages in this in the short term. However, we agree that there may be problems in the long run, as we do not know how the Turkish economy will develop, whether it will remain strong or not. Therefore, we cannot predict the successfulness of our investment.
What is absolutely clear though is that the economies of all countries are now put in a difficult situation. It does not seem that the risks are higher in Turkey than elsewhere, quite the contrary. In a situation of crises and losses in financial sectors all over the world, it is not about making money anymore, but rather about how to protect capital or at the very least lose less of it. Real assets come first nowadays. However, investing was not our only goal. We were buying a property in Turkey for ourselves and wanted to obtain a second passport.
We contacted Tranio in April, when we already knew exactly what we were looking for: an apartment in Istanbul in a price range of 250,000–300,000 US dollars, so that we could live there and obtain citizenship by investment.
Bargaining is a common practice in Istanbul
At first, we were taking our time studying the select primary properties that our manager Maria sent us. We even thought about making a purchase in instalments. Then the news came: they were raising the investment threshold for obtaining citizenship from 250,000 to 400,000 US dollars. To pass under the old rules, the deal had to be completed before 13 June. The instalment plan was immediately out of the question, since citizenship could only be applied for after full payment.
They started talking about increasing the minimum amount of investment in real estate from 250,000 to 400,000 US dollars back in April. On 12 May, the law came into force and a transitional date of 13 June was announced. But there were still no official explanations of what exactly needed to be done before this date.
Was it to conclude an agreement, to obtain a certificate of ownership or to apply for citizenship?
Only on 2 June did the Directorate of Land Registry and Cadastre of Turkey offer an explanation. Turned out, it was necessary to apply for a TAPU before 12 June in order to participate in the citizenship by investment programme under the old rules with a 250,000 US dollar threshold.
There was a lot of anxiety and worry because of this ambiguity at that time; we rushed our clients, lawyers, and developer partners.
We hastily packed up and flew to Istanbul on Saturday, 14 May, and on Monday, 16 May, we already signed a contract with the developer. Over the course of two days, Tranio's manager in Istanbul, Yuliya, showed us 7 primary properties — the maximum number of projects suitable for our request they could find on such a short notice. Those projects that we studied remotely from Moscow were almost completely sold out due to rush demand. Currently, everything in the primary property market of Istanbul is being bought up fast, especially at the final stage of construction.
We had been to Istanbul before only as tourists. Therefore, we had no idea in which area to choose an apartment for living. Time constraints made us rely on our own eyes and intuition as well as the information Yulia told us. We did not want to buy properties under construction. Firstly, it seemed a bit risky, because we had no knowledge of the market and its developers. Secondly, we wanted an apartment we could move into as fast as possible.
Thus, we opted for a project in Esenyurt and booked a two-bedroom apartment on the 12th floor there. Although this is a rather remote area from the centre, it is quite convenient for living. It took little time to get to the apartment by car from the hotel in the centre of Istanbul where we stayed, although the distance was almost 40 kilometres. Istanbul is a huge city indeed.
Our residential complex consists of 4 buildings; 2 of them have already been commissioned, and another 2 are being completed right now. The place is very comfortable: there is a whole floor of shops, an outdoor heated pool, sports grounds, and public areas. And the maintenance fees are only 30 US dollars per month, which includes utility bills and payment to the management company of the complex. We had been inquiring about these expenses in all projects that we looked at; everywhere the amount was no more than 100 US dollars per month.
Esenyurt is a modern residential neighbourhood with its own well-developed infrastructure of shopping malls, parks, universities and cultural centres. This is a huge area of about 30,000 square kilometres with a population of about 1 million people.
Esenyurt, on the one hand, is autonomous and has offices of large companies and its own workplaces; on the other hand, it has a good transport connection with other districts, the centre and the new airport. Next to the project that Vladimir and his wife have chosen, there is a metrobus line — the urban transport with a dedicated lane on the highway, which connects the European part of the city with the Asian one without traffic jams.
Yulia told us that a large-scale construction of a new canal was underway near Esenyurt, which would become an alternative to the Bosporus. This project contributes to the development of the surrounding areas and creates additional potential for the future price growth.
It will be nice if this happens, but for the time being it is more important for us to solve the problem of acquiring citizenship and possible relocation. The investment side does not bother us right now. Of course, there is a possibility that we will not end up living in this apartment, in which case we will look for opportunities to rent it out.
90% of primary properties have their own management companies, which, among other things, are engaged in long-term rentals. They find tenants, interact with them and maintain the property. There is such a company in Vladimir’s project too.
Quite often, rental services are included in aidat — a monthly fee for the maintenance of common facilities and infrastructure of the complex.
If your management company is not engaged in renting for some reason, you can contact a third-party management company. The cost of services of such companies, as a rule, is 10% of the rental income.
On average in Istanbul, you can count on getting a yield of 4% per annum from long-term rentals, which is a good figure for a large metropolis, especially considering that high-quality new housing in Istanbul has high liquidity. However, in the current market situation, the main profits come from the increase in value of real estate, not from rental income.
Julia taught us a trick, which saved us about 20,000 US dollars. As it turned out, the prices in Turkish real estate catalogues were not always set in stone. In Turkey, it is customary to bargain even in the primary real estate market, which is unusual for us. When we were signing the contract, we had successfully bargained with the seller, thus reducing the price to 281,000 US dollars from the initial 300,000.
In addition, the developer agreed to pay the full transfer tax himself. The amount of this tax is 4% of the property’s value and is usually distributed differently between the buyer and seller in different transactions. In some cases, this tax falls entirely on the buyer. We only had to pay 1% VAT on the condition that we would not deduct this tax after the purchase.
In Turkey, it is customary to bargain. This applies even to new apartments. However, it is better to do it in person at the developer's sales office, and not online via instant messengers. The chance to get a good discount is much higher this way.
Completion in: 2023 Total of 1441 apartments
Built in 2022 Total of 467 apartments
Completion in: 2024.IV Total of 462 apartments
We were afraid that we would be late, if the payment transfer was delayed
The most difficult and worrying thing was transferring the payment. We started this process when we returned to Moscow. We had money in several bank accounts and we planned to pay from these accounts. But it turned out that payment could be made from a single invoice issued in the name of the buyer.
Tranio’s managers advised us to choose one of the two banks — either Tinkoff or Raiffeisen — because back then, in May, these banks had the least problems when paying for Turkish real estate by invoice. And although the Tinkoff commission was lower, we chose Raiffeisen. Firstly, we already had experience of working with this bank. Secondly, Tinkoff had no physical branches, so it was unclear how to resolve any potential problems or questions we might have. We gathered the money needed on the Raiffeisen account and processed the transfer.
On the same day, the bank requested two additional documents: a certificate of the seller company’s beneficiaries and a justification of the payment amount: it was 1% more than the apartment’s cost because of the VAT. These documents were quickly sent to us by the developer’s representatives, and the payment went through successfully with a commission of 250 US dollars. We had fears that the payment would get stuck on the correspondent account of an American bank (all dollar transfers had to go through such accounts). Although such cases were rare, the bank employees warned us about possible risks.
Different banks take different amounts of time for transfers. In our experience, Raiffeisen Bank makes the fastest international transfers; the transfer can usually be complete in 1 business day.
Gazprombank needs 3–7 business days. It is better to ask the bank employees about the time this process will take and prepare a package of documents in advance: a sales contract, an invoice and a certificate of the seller company’s beneficiaries, as well as translations of these documents into Russian. We help our clients with all of these documents.
Citizenship is obtained by power of attorney
Upon arrival in Istanbul, we actually signed two contracts: a contract of sale and a contract with a law firm, which would obtain citizenship for us. We had to make the necessary preparations: we issued a power of attorney through a notary, made copies of the documents and translated them. We were then given a list of additional documents to provide: for example, our birth certificates, which we did not take with us. We prepared and apostilled the remaining documents in Moscow, and then sent them by post to our lawyers in Istanbul.
On 6 June, our lawyers received our certificate of ownership (TAPU) by proxy and a few days later applied for residence permits for us. Obtaining a residence permit is a mandatory intermediate step before applying for citizenship. At the citizenship application stage, we plan to return to Istanbul.
The legal service for obtaining citizenship for two people cost 15,000 US dollars at that time. There was a cheaper option in another law firm, but this one seemed more reliable to us and promised to get us Turkish passports in a shorter time. We did not have to look for citizenship lawyers ourselves — Tranio managers recommended several trusted ones and provided us with a choice.
The technical possibility of moving is provided, all that remains is making the decision to move
The payment went through, we received a Turkish TAPU, and it became clear that we definitely had time to pass under the old citizenship rules of 250,000 US dollar investments. We can finally calm down and relax. We’ve made it: we’ve managed to implement our plans quickly. Although we still have relocation to plan for, which will undoubtedly bring us a whole other set of troubles and questions, we have already made this relocation possible.
By the way, apartments in Turkey are rented out with a fine finish, high-quality bathroom, kitchen and even household appliances, which is a pleasant surprise. We only have to buy the furniture and arrange everything for living.
It is different in Russia: you often get a rough finish or plastered walls and screed floors. Parking in Russia is quite a headache as well, while in Turkey it is common to sell new apartments with a parking space or two if the apartment is large enough. Our apartment has one underground parking space.
On our next visit, we plan to buy the bare minimum of furniture needed for living in our apartment. We will buy the rest, if we decide to stay in Turkey for a long time.
Most developers have an additional service for those who do not want to furnish the apartment themselves. You can take your pick of ready-made design solutions with furniture sets for different layouts. Often such a solution is even cheaper than handling everything on your own.