You may have heard that the currently most valuable districts of Istanbul were once fields or vineyards. Photographs from back when Maslak was filled with vineyards and Kartal was a fishing village are circulating on the internet.
Are our land and plot investments really profitable? What are the things to know when buying land? What should be considered in order to achieve high returns? What are the risky issues in these investments? How long does it take to profit from land and plot investments? Is this type of investment right for you? Let’s take a look at 15 things to know when buying land.
Are you patient?
One of the first things to know when buying land is when you want it to pay off. Land and plot investments are long-term but profitable investments, and you may need to be patient for 10 to 30 years for good returns. A residence or workplace can provide regular earnings with rental income, but you will have to wait for land and plot investments and pay property taxes every year. You have to be patient to see results in land and plot investments.
Are you aiming for short-term or long-term returns?
As we said, land and plot investments are investments that bring returns in the long run. Plot investment is recommended if you are aiming for 5-10 years, and land investment is recommended if you can wait for over 10 years. In periods when the markets slow down, it is difficult to sell at value and you may have to wait for the market to recover. Things to know when buying land include knowing the right time.
Zoned land is risk-free and its value increases to a certain extent as the population grows and the economy develops. Unzoned land is risky, it usually only preserves its value until it is zoned, but in the case that it is zoned, the income will be very high.
Things to know when buying land: zoning status
Vacant land is a piece of land without zoning. You can earn very high profits when the land you bought is zoned, but if it isn’t zoned, the value increase will be limited. Plots gain value as population and trade increase in the region, and if it becomes possible to construct more buildings with zoning changes, its value will increase at the same rate.
Follow regional development plans, which include investments that will add value to the land or plot in the future. Get information about the zoning plan of the land or plot you plan to buy is subject to from the relevant municipality.
Location matters in things to know when buying land
The most important thing to know when buying land is its location. The increase in the value of the land is determined by the increase in population, trade, industry, investments and infrastructure projects nearby. After a while, these developments lead to zoning in the area where the land is located and the land can turn into a plot.
Land on the development axes of the cities gains value faster. Small cities generally expand along the road to the big city, so investments in this direction may be more profitable. The purpose of land investment is to buy land that can be zoned before it is zoned and to benefit from the increase in value that comes with the zoning.
Another bonus info: “A plot that has a wide road frontage will have increased value. If a commercial building is built there, a wide frontage increases the income thanks to the large showcase and signage area.”
Which ones to avoid?
Things to know when buying land cover which ones to avoid. Shared title deeds, protected areas, and water basins should be avoided.
With shared title deeds, other partners can use their preemption rights and get the title deed from you for the same price you paid. Water basins and protected areas are not zoned, so your investments will not bring the returns you expect.
The lands close to forests are also risky, as they can be included in the forest zone. Square-shaped plots are ideal, rectangular plots can also be attractive. Trapezoidal and rounded plots are also risky as they make construction and use difficult.
What size of land should you buy?
When the land is zoned, the land you own will be reduced by up to 40% as the land turns into a plot. Therefore, the land you will buy must be large enough to build on even after this cut.
Is the land suitable for a farmhouse?
If you buy land with beautiful surroundings or a good view, you may be willing to build a farmhouse here after a while, even if there is no zoning. An area of at least 5.250 m2 is necessary in order for a farmhouse to be built on farmland because you cannot reduce arable land below 5000 m2 and since the maximum building area is 250 m2, 5.250 m2 is the minimum requirement. Furthermore, in order to build a farmhouse, the parcel must have a frontage to the cadastral road.
Things to know when buying land or plots
- Whether the seller and the person appearing as the owner of the land in the land registry are the same people should be verified. Otherwise, there is a possibility of fraud.
- The land area of the land or plot is also written in the land registry in square meters. The area specified by the seller should be compared with the measurement of the proportions in the deed.
- Another issue that we need to check for the deed is the annotation section in the land registry. In other words, whether there is a lien, mortgage, usufruct or preemption concerning the land or plot should be learned. Because these rights are superior rights by nature. For example, if there is a lien on the plot after it is purchased, the landlord can sell the plot and collect their dues.
- If the rate is specified in the deed, the land belongs to more than one person. Such “shared parcel” land and plots have lower values compared to detached plots.
- In summary, pay attention to whether the land is farmland or a plot. And keep in mind that if it is shared land, consent to purchase is required from all shareholders. This process may extend the purchasing process a little bit.
- Whether the land you see or shown to you actually appears as the same land in the deed should also be learned. It is necessary to make an inquiry to the cadastral administration to get this information.
If you are determined to invest in a plot, one of the things to know when buying land is the zoning situation. The zoning plan can be learned from the municipality to which the land is affiliated or from the public works and settlement administrations.
For example, the seller may say that the land has been zoned for a 10-story building. However, in reality, the land in question may be suitable for a 2-story building, or it may be a protected area or a forest area.
The zoning plan of the surrounding area of the plot is also another thing to know when buying land. It may be a commercial or industrial area, a transportation network may be built in the near future… These issues play a role in determining the value of the plot.
One of the things to be considered in the case of foreigners buying plots. There is a special condition for natural entities of foreign nationality or legal entity trading companies established in foreign countries subject to the laws of their respective countries. These people should submit the projects they prepared while buying land or plots to the approval of the relevant ministry within 2 years. Otherwise, the state can take back the land or plot free of charge.
In addition to these things to know when buying land, additional factors including, but are not limited to the topography of the parcel (slope, etc.), its ground, whether it is an angular parcel or not, its social environment, its proximity to service areas such as hospitals and schools, its street access, the construction area allowed in accordance with the zoning plan (building coverage ratio and floor area ratio) should also be considered.
If you think that you do not have enough time to follow all the things to know when buying land, do not buy land or plots without investigating these processes. Our consultants who can help you in all these processes are waiting for your calls at Realista Turkey. Remember, any mistakes made at the beginning make it impossible to reach the conclusion.