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Dec 5, 2023

Difference Between Investing in Real Estate and Stocks in Turkey

People usually ask about the best investment . What is the best investment option? Is it the real estate market or the stock market? To answer this question, we have to know the differences between the real estate market and stocks.


Investing in Stocks:

Investing in stocks means having a share in the company in which you own shares. The more the company grows, the higher the returns on investment, the more profits increaseIt is useful for certain periods of time, but it is not safe at all. This type of investment may have high and quick profits without much effort, but at the same time investors must predict any losses that may occur at any time.

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Pros of investing in stocks:

  • Higher capital growth potential than investing in real estate.
  • Ease of liquefaction and obtaining money in cash.
  • There are no periodic maintenance costs or other.
  • This type of investment only includes portfolios, fund fees, and the cost of trading.
  • It is an open investment for everyone, whether they are from the low-income category or from the middle class or below.


Cons of investing in stocks:

  • Its risks outweigh the risk of investing in real estate as it is not considered in-kind financial assets.
  • Unsteady income
  • There is a possibility of increasing or decreasing it according to the financial performance of the company.
  • If investors sell shares at a profit, then they will have to pay capital gains tax.
  • Preferred shareholders, creditors, and bondholders get their money first in case of a company's bankruptcy, while common shareholders are the last to get their money. 


Investing in real estate:

Real estate investment is buying properties with the aim of reselling or renting them again and benefiting from their monthly returns. Thus, many believe that owning real estate is the easiest and safest way to earn money and grow wealth.


Pros of investing in real estate:

  • The risk is much lower than investing in other markets. 
  • The assets are tangible and easy to understand and do. 
  • Its value grows and its price increases over time.
  • Building equity for the futureOne of the advantages of investing in real estate is the ability to build equity. Equity is the difference between the purchase price of the property and the current price of the property. If a property was purchased for $250,000 and sold for $300,000, then the equity rights for this property are $50,000.
  • Generate passive income: It is the income resulting from any cash flow that a person receives regularly without effort to obtain it. Income from real estate can be earned by buying properties and renting them to others.
  • Hedging against inflation: banknotes lose their value with time, especially during inflation such as what is happening nowadays. However, this doesn't happen with real estate, because it keeps its value. In contrast, the prices of real estate become higher with passing time. 


Cons of investing in real estate:

  • Periodic maintenance, which has an annual depreciation rate of approximately 3% of the property value. 
  • Risks of collecting money from tenants
  • Sometimes, delays in receiving the property delays the period in which investors will start recovering their money. 
  • It requires a large amount of capital. 


What are the advantages of investing in Turkish real estate?

After a long comparison between investing in stocks and real estate which reflects the huge advantages of investing in real estate compared to any other investment, it is important to highlight the advantages of investing in Turkish real estate. 

Turkish real estate investment has become the target of many local and foreign investors, as the Turkish real estate market is a promising leading market that attracts investors and buyers from all over the world. The demand on Turkish real estate increased significantly in the previous years due to many reasons which are:

  1. In order to obtain Turkish citizenship; buying a property of $400,000 qualifies foreign investors to obtain Turkish citizenship within 90 days only. 
  2. In order to obtain a real estate residence permit by buying a property of $200,000 in all Turkish cities.
  3. ROI is short-term with high profits. 
  4. In order to benefit from the economic prosperity that Turkey witnesses these days.
  5. The new foreign investment of big countries like Qatar, UAE, and China emphasised many investors to head to Turkey.
  6. The new governmental strategic projects allowed for new international investments which increased the number of expats and foreign businessmen in Turkey who need properties to live in. 
  7. After ending the golden visa in Portugal, Ireland, and Spain, Turkey became the haven in which foreign investors invest their money.
  8. The prices of Turkish real estate are cheaper than real estate in Europe with the same quality and even better.
  9. The facilities that the Turkish government provides for foreign investors to save their rights and protect them from fraud, which cannot be anywhere else. 
  10. The cost of living in Turkey is lower than in Europe, America, and Canada with the same high facilities, utilities and infrastructure. 
  11. Turkey’s cool weather compared to countries like Canada where it snows almost the whole year or Gulf countries where the temperature is over 40 almost most of the year. 
  12. Turkey’s strategic location between Europe and Asia, in addition to being located on 3 seas which makes it the best place for international commerce. 


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