I know that Istanbul is the bridge between East and West and I love Orhan Pamuk. I would love to get a cool loft with a melancholic Bosporus view, maybe in Cihangir or Çukurcuma, which all the papers keep telling me OVER and OVER and OVER and OVER and OVER are the Brooklyn of Istanbul and super bohemian. That sounds like me! Tell me your secrets!
Aspiring Real Estate Mogul
Unlike many topics on which we offer opinions, this is one we know something about. HOLY SHIT, do we have strong opinions about it (making it no different, in reality, from topics about which we know very little).
Here's a bit of background. In a past life, we were part of a legally recognized, now dissolved, partnership that believed, with uniquely American ferventness, that "renting is stupid."
In July 2007, we liquidated holdings which, had we not, would have been lost six months later in what became known as the "great American experiment with privatization of wealth/socialization of risk." We bought an Ottoman-era wood frame house on a mostly nice, sometimes violent, sokak in Çukurcuma. This was not dumb. It was a lovely house and, except for the last two years during which we were tortured by near-constant construction and some other, unrelated problems, we very much liked living in it. After four years we sold the house at a profit. On the surface, it worked out great.
The profit, however, was not commensurate with the risk taken. Accordingly, we would not consider buying in Istanbul again.
Before you think about buying property here (or anywhere in Turkey), ask yourself some questions.
- Do I think it's important to follow rules?
- Do I expect that laws will be applied equally to everyone?
- Do I expect contracts to be upheld?
- Do I believe people who are trying to sell/help me buy property are telling something approximating the truth and are looking out for my interests?
- Do I believe that, if someone damages something that belongs to me, I should have recourse in courts of law?
- Am I a stupid yabancı?
If the answer to any one of those is "yes," you should proceed with extreme caution.
The following issues have affected us personally or have affected close friends. We've heard about lots of other problems but writing about them all would turn this into a 5000 word post. Here are the top ones.
Ownership: One thing that makes our experience a bit different than that of others who are buying now is that, from late 2006 to July 2011, foreigners were not allowed to purchase Beyoğlu property in their own names. This is no longer the case. During that time, however, the Beyoğlu Belediyesi, in violation of Turkish law and without warning or explanation, did not transfer deeds to foreigners (there is no legal barrier to foreigners owning most properties in Turkey). Our Turkish lawyer owned our house and NOT ONCE did he try to steal it. He was nothing but professional and trustworthy, mostly. However, we would never do this again. Had he decided to steal our house, there was very little we could have done about it.
Do not, under any circumstances, even look at a property without a clear chain of ownership. This is a problem in parts of Beyoğlu where a lot of Greek and Armenian owners "left town in a hurry," vacating lovely properties that are now "owned" by the Anatolian migrants who "moved in." Sure, apartments have high ceilings and beautiful frescoes and are probably a bargain. If you can't establish ownership through the tapu (deed) office, which is relatively easy (check it with your own eyes!), don't buy.
Emlakcıs: How can you tell if a carpet seller is lying? His lips are moving. The same logic should be applied to emlakcıs, Turkish "real estate agents." They are guys (but also ladies) whose main qualification to broker property sales is their ability to obtain keys to all the apartments for rent/sale on a particular street and never, ever shower. They are a scourge.
Emlakcıs are unlicensed and unregulated. Your operating assumption should be "they are going to rip me off in every possible way." Understand that they are in no way looking out for your interests, assume every listing on their website or office window is a bait and switch, never give them any money up front for any reason and never agree to any "fee" they say is "obligatory." There is no such thing as a multiple listing service, properties you see on sahibinden.com ("by owner") are usually put there by emlakcıs and the six percent "commission" they demand is bullshit. We can think of one or two whom we trust but have been screwed by many others. Since emlakcıs usually cannot be avoided, we recommend taking the most aggressive/defensive stance possible when dealing with them. These principles apply to renting as well as buying.
Construction: Never buy or rent near a vacant lot or derelict building. We have lived next to five. Four of them have undergone major construction projects through which we have suffered/are currently suffering. Istanbul is growing and changing and this will affect you --as a buyer or a renter -- eventually in at least two ways.
First, obviously, is noise and general disruption. Believe it or not, Istanbul has laws that govern construction hours. Believe it or not, these rules are routinely ignored. Builders evade the Zabita (civil police) by using their backhoes or pouring cement at midnight on a Sunday. Can you do anything about it except rage? Probably not. The average shitty concrete five-floor monstrosity takes about 6-12 months to build. Did you know pneumatic jackhammers are used 10+ hours a day for building? They most certainly are. The presence of unregulated construction nearby will affect your ability to live in, rent out or sell your place.
Second, if you own a building next to a construction site, you have no recourse if it is damaged by builders, which it will be. Ordinary people -- especially foreigners -- do not have easy access to civil courts. We decided never to own property in Istanbul while watching a backhoe dig a pit beneath the foundation of our small wooden house, knowing that if our house fell into this pit, all our money would be gone and we would not get it back. You have no recourse. Dump trucks hauling debris smashed into the exterior walls every day for weeks. The construction crew just laughed at us when we complained. They laughed less when we threatened their truck headlights with a hammer but they didn't stop hitting the house with trucks. You have no recourse. Except, maybe your hammer.
Capricious application of laws: Assume that because you are a stupid yabancı, laws will apply to you that do not apply to anyone else. Guess who is going to get shut down by the belediyesi: the yabancı carefully replacing the windows on his own historic house for which he has permission or the construction firm ripping up historic buildings at midnight with a backhoe?
Also, keep in the back of your mind, that if you buy a property today, next week some arbitrary fiat may make it difficult to sell (see above about ownership).
Contracts: So you signed an agreement with an emlakcı or with your buyer/seller? Congratuations. It's pretty meaningless. There is no mechanism to enforce it, except the good faith you used when you signed it and that the other party almost certainly lacked. It doesn't protect you. If the seller wants to take your deposit and not sell you the house or raise the price 20%, there's not a lot you can do about it.
On the other hand, you're not bound to it, either. We verbally agreed to sell our house to a buyer, then backed out at the last minute when it looked like he planned to screw us. It was a total dick move, for sure, but, other than sending some nasty emails, there was nothing he could do about it. It is the only time the lack of recourse has worked in our favor. At the time it was stressful, but once we got over the need to follow rules that no one else does, we felt good about it. We gave his deposit back because we are stupid yabancıs. We didn't have to.
Taxes: Without getting into a lot of detail, there are several things to know about the tax situation in Beyoğlu. First, buyers and sellers have been evading property taxes and capital gains taxes in Istanbul for time immemorial by lying on the deeds about the selling/buying prices. Second, the Belediyesi and mortgage companies are starting to figure this out. Third, as a foreigner, you are going to get nailed at some point in some expensive and/or catastrophic way. Don't listen to sellers or emlakcıs who say "this is the way it's done." Insist on doing it legally. Someday, the city will figure out you didn't pay 20,000TL for your apartment like it says on the deed and some chickens will come home to roost. (Is this scenario imaginable to you? It is to us. "Hi, I'm from the city and we're starting a redevelopment project in your neighborhood so we're buying up properties. Your deed says it's worth 20,000 TL -- about $11,000 -- so here's 20,000TL. What a bargain! Kthnxbai.")
You might be the kind of person who doesn't worry about these things, or you are comfortable navigating this sort of risk environment, or you don't care that much about losing a couple of hundred thousand dollars, or you have a lot of fixers and lawyers and Chechens at your disposal or you don't hear construction noise because you are deaf. If so, go nuts. Buy property in Istanbul. You might make some some money. You might never hear jackhammers at 830 am on a Sunday. You might meet Orhan Pamuk.
In other words, your mileage may vary, but you were warned.