Purchasing a property is a critical decision for many people, bringing up numerous questions, such as: Should I buy property with cash or in installments? What are the pros and cons of each option? What do real estate experts and consultants recommend?

In this article, prepared by Skyline Real Estate, we aim to answer these important questions about paying in cash or installments when buying a property. We hope you find it informative and enjoyable.

Should You Buy Property with Cash or in Installments in Turkey?

When purchasing property in Turkey or elsewhere, you often have the option of paying in cash or in installments under certain conditions. Buyers may find themselves uncertain about the best payment method due to a lack of experience or other personal reasons. The definitive answer depends on personal and exceptional circumstances, which we will explore in the following sections to help you determine the best choice for yourself.

Differences Between Buying Property with Cash or in Installments

The differences go beyond just the payment method agreed upon by the buyer and seller; they extend to various essential details, which many may not be aware of. Here are some key points:

Buying Property with Cash in Turkey

There are several advantages to choosing cash payment for any property, with benefits that can be financial, legal, and preferential. Some of these include:

• Real Discounts: Cash purchases often come with real discounts ranging from 10% to 20% or more off the total property value.
• Smooth Title Deed Acquisition: You can go directly to the Land Registry Office, conduct a land survey, and immediately start the process of transferring ownership.
• Saving on Bank Fees: Paying the entire amount at once avoids numerous fees associated with installment payments.

Buying Property in Installments in Turkey

Installment payments typically require the buyer to make an agreed-upon down payment, often around half of the total amount, with the remaining balance paid monthly over a period of 6 to 48 months. Additional information about this method includes:

• Limited Discounts: Installment plans rarely include significant discounts, as they provide payment flexibility. Any discounts offered usually do not exceed 5%.
• Delayed Title Deed Issuance: The title deed is often delayed until the final payment, requiring bank receipts for all installments.
• Additional Fees: There are extra fees associated with multiple bank transactions over the installment period.

When to Choose Cash Payment?

Some prefer cash payments because they view the situation differently, basing their decision on several factors:

• Immediate Property Possession: Some buyers need to move into the new property right away, whether because they have recently moved to Turkey or for other personal or investment reasons.
• Psychological Stability and Security: Installment payments can be burdensome and exhausting over the long term, whereas outright ownership eliminates these concerns and offers the opportunity to start new projects.
• Cost Savings: Comparing mortgage costs to installment costs, cash payments save on monthly fees and often come with significant discounts.
• Full Control Over the Property: Cash buyers can rent out the property or sell it in the future as an investment.

When to Choose Installment Payment?

On the other hand, installment payments are suitable for young people or those without sufficient funds to pay the full price upfront, especially as property prices in Turkey continue to rise, making outright ownership increasingly difficult. Here are key reasons to consider installments:

• Insufficient Funds: Some buyers cannot gather the full amount or prefer not to spend all their savings on one purchase.
• Investing Saved Funds: Buyers may prefer to invest their money elsewhere and purchase properties in installments, believing this method offers greater financial stability.
• Urgent Housing Needs: Installment plans sometimes allow buyers to move in immediately, which is crucial for those who have lost their homes or need immediate housing but cannot afford full payment.
• Budget Management: Real estate experts and many investors believe that buying two properties on long-term installments is more beneficial than buying one property outright, as it enforces financial discipline.
• Monthly Financial Allocation: Buying on installments is similar to paying rent but ends with property ownership.

How to Buy Property in Installments in Turkey

Owning an apartment in one of the most developed and prosperous countries without sufficient capital is not an impossible dream. Here’s how it can be done:

• Through Construction Companies: Reputable construction companies in Turkey offer special deals encouraging buyers to purchase properties on comfortable installment plans, requiring an initial down payment and specific monthly payments.
• Through Turkish Banks: Some licensed banks in Turkey buy properties from construction companies and sell them on installments at higher prices, with the property under mortgage until the final payment.

Can You Obtain Turkish Citizenship by Buying a Property in Installments?

Foreigners looking to buy property on installments in Turkey and planning to reside there often ask if they can obtain Turkish citizenship. The answer is yes, provided the total property value is at least $400,000. For investors buying multiple properties on installments, the combined value must meet or exceed $400,000.

In conclusion, this article has addressed the crucial question of whether to buy property with cash or in installments, along with other significant questions. Ultimately, purchasing property in Turkey, by any method, is a wise choice given its status as a prime tourist destination bridging the Arab and Western worlds. For more information, you can contact Skyline Real Estate, which offers various property options and services to facilitate property ownership and assist in obtaining Turkish citizenship for the buyer and their family.

Read more: Turkish Citizenship by Buying Property in Turkey