Turkish leaseback

Hi Jack,

I am very interested in investing here and I would like to know if you proceeded with the deal or what is your position at the moment?


Regards, Shelley


jack spratt said:
Dear Cochese or anyone else with knowledge,

I am considering buying a couple of these apartments in Orient Palace. Has anyone found that the legalities of these contracts have been improved/amended since the original trouble experienced by "Cochese".

I have visited the site, and the apartment complex seems to be progressing well. I am concerned that the swimming pools, etc don't seem to have been even started yet, or the 5-star hotel, or the marina & beach, etc...... yet the complex is being sold on the premise that it is to be completed in June 2006!!

Please post contact details of the Law firm in Istanbul, if you have it.

Thanks, Jack.
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Re: Turkish Leaseback - Orient Palace Bodrum

Hi Cochese,

Have you decided to invest in this deal?


Regards, Shelley

Cochese said:
My wife and I are/were considering purchasing one of these properties and have engaged a law firm based in Istanbul to check it out. The contract was drawn up by one of the partners in the building firm - Euro Holding AS (Euro) - not a solicitor. Unifin Groep (Unifin), a Dutch company holds itself as authorized by Euro to sell, as well as to sign purchase and sales agreements with respect to the apartment complex. The contract itself is not in official form and does not comply with the requirements in the Turkish Civil Code and/or Notary Code. Therefore in case of the selling party's default it would be impossible to obtain a court order to transfer the ownership to our name. There is no documentary evidence that Unifin is duly authorised to sell and execute documents on behalf of Euro. The contract is not a sufficient legal document to secure the interests of the buyer, due to the peculiarities of Turkish Law. As it currently stands the agreement could easily result in a situation where the buyer makes a significant unsecured payment and in case of non-performance its only recourse is to Unifin for damages. These properties are being sold through a Re-max agent in Kerry and also by [broken link removed] Funnily enough the agent in the Uk also has another website [broken link removed] which will allow foreign developers the use of a virtual office. Apparently this encourages Irish & UK investors by virtue of the UK address and also "It is a proven fact that the British and Irish feel happiest when their call is answered by a member of staff with the same ‘mother tongue’ as themselves eg someone without a ‘foreign’ accent". I'll post further info when it is to hand. Happy investing...
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if you are considering buying in Turkey you ought to be aware of the economic situation in that country at present. The Turkish lira has has just endured 3 months of intense volatility - it is currently down almost 15% against the euro since the beginning of May (having fallen almost 30% at one point). Currency volatility of this kind ought to be a clear warning sign for potential investors - local interest rates are approximately 18%. This does not mean that you should not buy, but you ought to bear in mind that this is a risky place to invest.

Having said that, if you are determined to go ahead of this, you should try to negiotate on the price of the price of the property given that your effective purchasing power has increased by 15% since early May.
 
looking at alanya at present. what is the position regarding insuring property in turkey especially with earthquake cover? downsides of alanya appear to be distance from airport and beaches not great. upside appears to be a very popular resport with locals and nordics. anyone else hear that disney have purchased land in antalya for a theme park?
 
I wrote a piece on earthquake insurance on the blog (mentioned above) but you currently need to sign up to receive the feed in order to get it. PM me if you really don't want to do that and I'll consider sending a copy by e-mail.
 
thanks Aegean:something to factor in as well though alanaya appears to be in a relatively (?) earthquake free zone. cant understand in view of the danger of earthquakes why the higher the floor the more expensive the apartment. also one of the earlier post mentioned , quite rightly the value of the Turkish Lira agains the euro. my experience so far is that all property is valued in either sterling, euro, or even sometimes dollars, never local. the local currency has gained about 10% over the past few weeks, I know as I have a weekend coming up in Instanbul ( nothing at all to do with apartment hunting, just coincidence) and havn't yet ordered it in the bank but it has gone from over 2.10 to around 1.91 in the past few weeks.
cheers and thanks
 
cuchulainn said:
looking at alanya at present. what is the position regarding insuring property in turkey especially with earthquake cover? downsides of alanya appear to be distance from airport and beaches not great. upside appears to be a very popular resport with locals and nordics. anyone else hear that disney have purchased land in antalya for a theme park?
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I've heard the same things about some resort in spain. I think sellers spread these rumours to inflate the price. Is there any evidence of where disney have bought land in europe??
 
Bearishbull: Nope. just heard the rumour, which as you quite rightly point out could be just rubbish. supposed to be around 400 acres in Antalya.
 
A simple thing to do is ask Disney, really. They are obliged to divulge such information, which has made their sports interests a lot strogner as a result (Angels, Ducks et al). It's probably a rumour anyway, just like rumours that there was to be an Arabland built on the North Egyptian coast (near Alexandria) it drove Arab investors nuts in 2002 but proved to be a total fabrication, however lots of useless plots of sand were sold but a rather dubious company.
 
cuchulainn said:
looking at alanya at present. what is the position regarding insuring property in turkey especially with earthquake cover? downsides of alanya appear to be distance from airport and beaches not great. upside appears to be a very popular resport with locals and nordics. anyone else hear that disney have purchased land in antalya for a theme park?
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We have just returned from Akyaka, near Mugla/Marmaris, and were told that Disney will be opening in Ankara. I thought that this was strange given its central location but perhaps it could be aimed at promoting the capital and commerce etc.?...if true.

This is an extremely good forum by the way. We are in the very early stages of considering a purchase - not leaseback and geared towards long term use and capital gain - Does anybody know anything about the seller undervaluing the property for tax reasons and any possible negative repercussions (notwithstanding a lawyer being the obvious port of call!)? Research shows that it appears to be fairly common practice but I would be amazed if the Turkish government allows this loss of revenue without batting an eyelid.

Also of interest - As of this week Turkish overseas mortgages are being offered by some UK companies but none of the major banks seem to be following suit in the near term.
 
In the process of purchasing a property in Gold City Alanya. Tax is 3%, 1.5% of which is being paid by developer and 1.5% being paid by purchaser however we're only paying our 1.5% on 25% of the purchase price in order to keep the tax liability low. There are Irish Auctioneers involved in this project and they are adamant that this is common practice in Turkey.
 
Austik: I was informed by an Irish seller that it was the norm to pay half the 3% all right but on the whole price. also there is a wealth tax of .3 % on the whole price paid annually( compared with say Portugal this is positively cheap) and if you hold onto the property for 5 years its no longer due. The airport transfer if a bit of a bummer for Alanya though. I have contacted two national turkish bus companies, who have top class coaches travellling all over Turkey, but neither to do the antalya/alanya run. Taxies appear to have it all to themselves.
 
cuchulainn: we're definately only paying 1.5% on 25% of the purchase price. Turkish authorities are quite happy to accept this in order to keep foreign investments flooding in. Didn't know about .3% wealth tax, checking it out now.
No problem with antalya/alanya transfers, Goldcity investors are picked up and dropped off at airport upon request - free of charge. Shuttle bus service available twice daily goldcity - alanya return - free of charge. This service will be increased once Hotel is opened next year.
 
Austik: had a look at Gold City. very impressive but not sure its for me.I will be only purchasing an apartment and those looked a little too big. Reminded me a wee bit of that block in Praia de Rocha. But I think I want a spot where I can go for a stroll in the evening and a pint, without geting into a taxi or car. If you visit www.letsgototurkey.com they have details on taxes and charges. It would appear the annual property tax is .1% which is ok. The property I am looking at in Alanya is called the Connaught Court ( couldn't make that up if I tried). Also when I was looking at a particular development on sale by letsgo I notice that of about 40 apartments sold approx 30 were to Danes, another couple to Brits and one to a Finn. Interesting. I am looking for two beds ( dont wan't or need more) and 1 +1 bathrooms as they are inclined to call it. Most have very good balconies and the toilets and on-suites have outside windows but in one development the main bathroom led directly onto the sitting room. Dreadful altogether. what made you pick Gold City and what kind of prices are they looking for.? Couldnt find this on their site.
 
Cuchulainn: I wasn't fully convinced about Goldcity originally but after researching as much as I could myself I put a deposit on a 1 bed Apt for €95k. Had genuine re-assurances from Est Agent of selling on for me if I wasn't happy with what I saw after a trip out. Went out to Goldcity for a week and have to say that we were totally impressed with the entire set up.
Fabulous development - 5 star international standard. Hotel is not finished but official opening is next year.
Stayed in a 1 bed Apt - same as what we were originally purchasing. Finish is exactly as described. Marble floors throughout Lovely balcony with mountain and sea view. Generous living/dining and kitchen space. These apts seem to have alot more sq ft than any most. Bedroom has double and single bed and can accomodate both no problem. Couch will sleep 2 if necessary. Bathroom with bath and shower. Granite work surfaces in bathroom and kitchen. Air-conditioned. Beautifully decorated throughout. Regardless of where your apt is situated you will have a great view as the units are built on a sloping scale around the mountain. Also no building is more than 3 stories high.
No need to get in a taxi or car to go for a pint. Once hotel is up and running you probably won't want to leave the complex itself, the facilities on offer will be second to none.
When we were out there we ate in goldcity itself on 3 out of 6 nights, considering that there is only one kitchen on the go at the moment the food was as good and in some cases better than some of the restaurants that came highly recommended in Alanya. Very inexpensive to eat and drink in goldcity. Also no need to bring Lira, goldcity except Euro and prices are all in euro. They also gave me a better exchange rate for my lira than I got in BOI and gold city charged no comission. This will be the ongoing situation.
About 90% of what has been sold is to Irish and the rest is to Danes and Norweigiens. Management company has an office on-site as well as an office at harbour in Alanya. Complex will not be marketed in Ireland. They will be advertising with a Swiss tour operator and one other. Will not be aimed at the cheap package holiday market. Rents will be pooled and divided according to investment.
Some of the units have already gone up in price. Friends who purchased a 2 bed penthouse apt for €140k have just sold it on for €180K. These particular units are all gone. Since our trip, we've decided to upgrade to a larger unit and have been allowed €125k on our 1 bed purchased for €95k. It's the largest private project in the Mediterranean. Developers have purchased another 1600 acres around Goldcity and are hoping to develop a golf course and other park facilities down the road. They have also taken a 49 year lease on part of the coast so as to provide a private beach for goldcity.
 
Changed from apt to Villa and it's finished. Stayed in one of the finished 1 bed apts. No problems with legal side of things and no problems with bank. I purchased through an agent in West of Ireland whom I would strongly recommend.
 
Austik: you appear to have done very well there. by the sounds of it, if you sold tomorrow you would make a few bob straight up. have looked again at Goldcity but its not for me. I wish you health to enjoy.
cheers.
 
Austik said:
Changed from apt to Villa and it's finished. Stayed in one of the finished 1 bed apts. No problems with legal side of things and no problems with bank. I purchased through an agent in West of Ireland whom I would strongly recommend.
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Austik, I was also looking at the GoldCity development and saw it on TV3 last week. Can you tell me what the maintenance charges are, as I cannot find any details of these costs. I had heard they were charging about €400 last year, but now they were trying to increase it to €700-€800 which seems very expensive. Thks
 
Hi TVMAN
You've been misinformed. There were no maintenance charges last year as goldcity is not yet oficially opened. The maintenance charges for a 1 bed will be about €400 The official opening is next summer. Building is not yet complete and the charges won't kick in until after the opening. Insurance, covering buildings and contents and public liability will be available, for a 1 bed, approx €200.
 
I am in the process of buying a 2 bed apt in Orient Palace Bodrum has anyone more info on this development since the last message. I am also having difficulty accessing the Euroholding TR web site and was wondering if others where having the same difficulties.
 
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