Invest Smart in Turkey: Own One Property, Rent the Other

Imagine owning two properties in Turkey—one is your personal residence, and the other is a steady source of passive rental income. This setup, known as the dual property strategy in Turkey, is becoming increasingly popular among foreign buyers. But what exactly is this strategy, and why is it gaining traction? Below, we’ll break down everything from rental yields and taxes to how to implement this approach in practice.

Live in One, Rent the Other: A Profitable Property Strategy in Turkey

How the Dual Property Model Works

The dual property strategy involves purchasing two real estate assets at once: one for your own residence, the other to rent out for income. This allows the owner to solve their housing needs while simultaneously investing and earning passive rental income in Turkey. For example, a family might buy a villa on the coast to live in and a separate apartment to rent out long-term. They live in one and generate income from the other.

This model has gained popularity for several reasons:

• Turkish real estate continues to rise in value and is considered a highly liquid asset.

• Foreign property buyers in Turkey are eligible for residence permits and, for investments above a certain threshold, even citizenship.

• The climate and infrastructure make long-term living attractive, while demand for rental housing remains strong year-round.

Who Is This Strategy Suitable For?

This strategy appeals especially to families with children and remote professionals relocating to the Mediterranean for a better quality of life. They benefit from spacious housing (like a villa) for permanent living and a nearby rental unit whose income helps cover household expenses—utilities, school tuition, and more.

It’s also a great fit for retirees from colder countries who, while living in their own home by the sea, use the second property to supplement their pension through rental income.

Investors aiming for Turkish citizenship by investment should also consider this approach. It’s legal to buy multiple properties to reach the required investment amount, making it possible to combine a personal residence with a high-yield rental property.

Benefits of Living Permanently in Turkey

Let’s look at the long-term lifestyle advantages that indirectly enhance the value of a dual property strategy:

• Mild climate and natural beauty: Turkey’s Mediterranean coast (Antalya, Alanya, Fethiye) offers abundant sunshine, warm sea waters, and clean mountain air. Winters are short and mild—great for health and wellbeing. Living in your own villa by the sea, you essentially enjoy a year-round resort at your doorstep.

• High comfort at reasonable cost: The cost of living in Turkey is lower than in most European countries. Utilities and high-quality groceries are affordably priced. Modern residential complexes often feature their own amenities—pools, gyms, saunas, and more.

• Social infrastructure and education: Popular expat areas such as Alanya and Antalya offer both public and private schools with instruction in English, English-speaking kindergartens, and international clinics.

• Easier legal residency: Owning real estate simplifies the process of obtaining a residence permit (ikamet). After five years of continuous residence, you can apply for citizenship through naturalization (as an alternative to citizenship by investment). By purchasing a home, a foreign family gains the opportunity to live in a safe, politically stable, and welcoming country.

• Cultural familiarity and language accessibility: Major expat communities thrive in coastal cities like Antalya, making everyday life easier. Many locals speak English, and Turkish culture values hospitality and family, helping new residents feel at home quickly.

How a Dual Property Portfolio Works in Alanya

Example: A Villa for Living and an Apartment for Rental

Here’s an example of what a dual property portfolio might look like and how much income it could generate. Let’s say you’re focused on the Alanya region—one of the most popular destinations among foreign investors—and have a budget of around €500,000. You could divide this budget as follows:

3+1 villa in Alanya for personal residence:

• Approx. 200 m², private garden, possibly with a pool

• Price: ~€350,000 (mid-range segment)

• This becomes your primary home and is not intended for rental.

2+1 apartment in a modern complex near the sea for rental:

• Approx. 90 m², in a gated community with pool, security, and gym

• Price: ~€150,000

• This unit is rented out long-term.

Rental Income Calculation

Note: The 7.2% yield is passive income, in addition to the expected appreciation in property value over time.

How Rental Income Covers Ongoing Expenses

Rental income from the second property can significantly offset the cost of ownership. For example:

• Property expenses: The villa owner pays annual property tax (0.2% of cadastral value), around €700 per year for a €350,000 home. Add about €600 per year for the apartment’s monthly site maintenance fee (€50/month). You might also spend on garden or pool upkeep for the villa. Total annual expenses could be around €1,800. The rental income of €10,800 fully covers this—and leaves about €9,000 extra.

• Utilities and insurance: Rental income in Turkey can also cover electricity, water, internet, and property insurance for both units.

• Emergency reserve: It’s wise to save part of your income as a buffer for vacant months or maintenance costs.

In effect, your rental income pays for your homeownership costs, meaning you live in your villa essentially “for free.” When factoring in long-term property appreciation, the return on investment becomes even more attractive.

Short-Term Rental in Turkey: Income Potential and Legal Limits

How Much Can You Earn from Short-Term Rentals?

An alternative is short-term rental—daily or monthly to tourists. This model can yield 8–12% annually, sometimes exceeding 15% in prime resort areas with excellent occupancy. However, there are several challenges:

• Seasonality: Demand spikes in summer but drops in winter. Annual occupancy rarely exceeds 60–70%. You’ll need to attract off-season tenants—like expats or digital nomads—or accept lower occupancy.

• Operational costs: Frequent guest turnover requires cleaning, marketing on platforms like Airbnb, guest communication, and minor repairs. Hiring a management company can help but will cost 20–30% of your income. Also, short-term rentals require full furnishing and appliance setup, increasing your initial investment.

• Regulatory issues: Turkey has introduced strict rules. Renting for fewer than 100 days requires a special license. Without it, listing your property for short-term rent is illegal.

For most dual-property owners, long-term rental (6–12 months) is the most practical. Demand is strong year-round in major cities and resorts.

If you do plan to run a short-term rental business—like a summer villa in Alanya—make sure to comply with the legal framework and hire a licensed agency.

Taxes and Legal Requirements for Rental Income in Turkey

How Much Tax Do Foreigners Pay on Rental Income?

Rental income in Turkey is subject to personal income tax for both locals and foreigners. The system is progressive:

• Up to ₺110,000/year: 15%

• ₺110,000–₺230,000: 20%

• ₺230,000–₺580,000: 27%

• ₺580,000–₺3,000,000: 35%

• Over ₺3,000,000: 40% on the portion exceeding this amount

There’s also a tax-free minimum threshold, and only the income exceeding that amount is taxed.

What Expenses Can You Deduct from Taxable Income?

You can reduce your taxable income with allowable deductions. Landlords may deduct expenses for property maintenance, repairs, depreciation, and management fees. There’s also a standard 25% deduction. So, if your rental income is ₺100,000/year, only ₺75,000 is taxed.

When Do You Need a License for Short-Term Rentals?

Law No. 7464, enacted in 2023, governs short-term rental in Turkey (under 100 days). Rentals longer than 100 days are classified as long-term and are not subject to these restrictions.

To rent short-term legally, you must:

• Obtain a license from the Ministry of Culture and Tourism.

• Get unanimous approval from co-owners in your apartment building (unless short-term rental is already allowed in the residence bylaws). For private villas, neighbor approval isn’t required, but licensing rules still apply.

• Ban on subleasing: Only the owner or a licensed agency may manage rentals.

• Comply with inspections: After licensing, the property must display an official sign and is subject to inspections.

How to Minimize Rental Risks in Turkey

How to Avoid Non-Payment and Choose the Right Tenants

Late payments and non-compliant tenants can be a serious issue. Evictions through the courts take time, so prevention is key.

Use a well-drafted rental agreement that includes penalties for late payments and terms for termination. Always request a security deposit—typically one or two months’ rent—to cover damage or missed payments.

It’s important to screen tenants carefully. Meet them (or have someone you trust do so), assess their financial stability, and confirm their employment or steady income.

Fortunately, problematic tenants are rare—especially in quality neighborhoods that attract responsible renters.

How to Deal with Vacancy Periods Between Rentals

In long-term rentals, tenants are usually secured before the current ones leave, minimizing downtime. Still, gaps of 1–2 months may occur between contracts or during slow market periods.

Short-term rentals are more unpredictable—occupancy varies by season, competition, and pricing.

To reduce vacancies:

• Choose the right location. In Alanya, apartments within 500 meters of the sea are in high demand. Neighborhoods like Oba, Tosmur, Mahmutlar, and the city center offer strong rental liquidity.

• Offer good amenities. If the unit isn’t near the beach, features like pools, gyms, and security increase its appeal.

• Price the property realistically. Overpricing delays rentals even in great buildings.

The safest way to reduce vacancy is to hire a professional property manager. They’ll use local knowledge, client databases, and marketing tools to find tenants quickly—and replace them with minimal downtime.

How to Manage Property Remotely from Abroad

If you don’t live in Turkey year-round, managing your property from abroad can be challenging—especially due to language barriers and legal complexities.

The best option is to delegate management to a reliable local company. A professional team will:

• Screen and select tenants

• Ensure timely rent payments

• Handle communication

• Organize repairs when needed

• Provide you with reports and payments

How to Protect Rental Income from Inflation and Currency Risks

The Turkish lira is subject to inflation, and rental income in TL may lose value against foreign currencies over time.

Here’s how to protect your income:

• Keep part of your savings in foreign currency: You can convert excess lira into euros or dollars on your Turkish account. Most banks allow multi-currency accounts.

• Include inflation indexing in the contract: Current regulations limit rent increases to 50% annually, but most contracts still include annual CPI-based adjustments.

• Use shorter contract terms: Instead of a 2–3-year lease, opt for 11-month or 1-year agreements. This allows you to renegotiate terms more frequently.

Why You Must Check Complex Rules Before Buying

When buying an apartment in a residential complex, check whether the bylaws allow rentals. Some buildings prohibit short-term rentals altogether. Even long-term rentals might face restrictions, such as bans on student tenants.

Also assess the financial health of the complex—monthly dues (aidat), outstanding debts, legal disputes. For villas, consider ordering a professional inspection to assess the roof, electrical system, or pool and avoid unexpected expenses.

How to Choose a Property Management Company

If you plan to outsource management, take your time selecting the right company. Check their reputation, years in business, licenses, and terms (fees, services included, reporting structure). Sign a clear contract outlining responsibilities.

A good agency will maintain your property, pay bills, renew insurance, and represent your interests as needed.

What to Do with Your Property in the Future

How to Sell Property Without Paying Capital Gains Tax

Real estate is usually a mid- to long-term investment. When it’s time to sell, Turkish law offers a major tax break: if you’ve owned the property for more than five years, you don’t pay capital gains tax.

For example, if you bought an apartment for €100,000 and sell it after 5–6 years for €180,000, the entire €80,000 profit is yours. If sold earlier, you must declare the gain and pay tax after deductions.

There are no extra fees for foreigners selling property, and funds can be transferred abroad freely—Turkey does not restrict capital outflows for investors.

What to Do with the Villa: Keep, Transfer, or Sell

If the villa is your primary residence, selling may not be your first choice, even if it has appreciated significantly. You have several options:

• Keep the villa for family use: Many foreigners grow attached to their Turkish homes. Even if the initial goal was investment or citizenship, the house often becomes a second home.

• Transfer to heirs: Property can be inherited under Turkish law without major restrictions. Foreign heirs can take ownership, but it’s wise to draft a Turkish will to prevent disputes.

• Sell after the 5-year threshold: If you no longer need the villa, you can sell it tax-free after five years. If it was the basis for your residence permit, you may need to reapply using a new property or rental agreement. This doesn't apply if you’ve obtained citizenship.

Full Exit Strategy: Sell Both Properties and Withdraw Capital

A full exit strategy means selling both properties and withdrawing your capital. This suits those who treated the investment as temporary. Proper timing and preparation allow you to sell both assets without delays, especially if they’re well-located and marketable.

You can reinvest the proceeds into commercial property, overseas investments, or other personal ventures.

Build a Dual Property Portfolio with Luxury Estate

Luxury Estate Turkey is a licensed real estate agency that has worked with international investors for years, providing end-to-end transaction support. We help select property combinations tailored to your goals—whether it’s family relocation, citizenship, or building a rental portfolio. We find properties that align with your budget and desired return.

Our experts assist throughout the purchase: secure payment processing, document preparation, bank account setup, and legal closing. After the purchase, we remain your partner—handling property management, rentals, and upkeep. If you live abroad, we take care of tenant selection, contract formalities, payment monitoring, and maintenance.

Luxury Estate Turkey is here not just to help you buy, but to manage and grow your real estate investment in Turkey with confidence.