What is the difference between residential and commercial properties in Turkey?



The difference between residential and commercial properties in Turkey lies in their purpose.

Residential properties are suitable for living, while commercial properties are intended for business activities like buying and selling.

These two main property types have specific characteristics that can help you determine your buying goals and choose the most suitable option for your requirements.


Residential properties in Turkey are a type of real estate intended for living, such as various types of apartments, villas, and cottages. These properties are owned by individuals or multiple owners, and they can either live in them or rent them out for investment purposes.

This means that these properties can be transformed from residential to investment properties and vice versa, or they can be resold after several years from the purchase to achieve a profit margin.


Unlike residential properties, commercial properties in Turkey are not suitable for living due to their purpose of facilitating business activities, such as shops, stores, offices, or companies.

The primary objective of buyers is to invest in these commercial properties.


Differences between residential and commercial properties:

One of the main concerns for investors is the distinctions between residential and commercial properties, which can be summarized as follows:


  1. Main Purpose of Property Ownership in Turkey:

  • Residential properties serve two main purposes: they are suitable for personal living and usage, and they can also be utilized for investment through renting or resale.
  • Types of residential properties include apartments in standalone buildings, apartments in residential complexes, standalone villas, villa communities, and chalets.
  • On the other hand, commercial properties are designed for real estate investment, generating income through rent or resale to increase capital.
  • They are not intended for residential use. Types of commercial properties include shops, offices, warehouses, and hotels.


Despite the differences, both types of properties are linked to the need for real estate ownership, which varies based on ownership conditions and property structure.


The prices of residential and commercial properties in Turkey vary significantly.

Generally, commercial properties have higher prices compared to residential ones due to their larger size and potential for investment, which increases their value.

Residential properties are smaller and serve various purposes like living or real estate investment, making their prices lower than commercial properties. Prices among residential properties differ based on property type (apartment, villa), size, number of rooms, location, view, floor height, construction quality, and available amenities. The common factor influencing both residential and commercial property prices is the location.

The more strategic and vibrant the location, the higher the property price, and vice versa.


‎‎The expected return on investment from residential and commercial properties varies significantly. Residential properties offer a more stable investment as people always need a place to live.

On the other hand, commercial properties provide higher investment returns compared to residential properties, as they can generate higher rental income and their value may also appreciate more quickly.


Advantages of residential real estate in Turkey:


  • Residential properties provide a place for individuals or families to live, which is the primary reason for owning this type of property as it retains its value even during economic downturns.
  • Residential real estate is less complex compared to commercial properties, making it a suitable choice for novice real estate investors. Additionally, owning residential properties is easier and doesn’t require a large budget.
  • The investment value of residential properties increases over time, leading to higher rental income and appreciation in value, especially when considering resale.
  • Utilizing residential properties helps diversify the real estate portfolio, allowing investors to create a varied property portfolio and generate a steady income.


Disadvantages of residential real estate in Turkey:


  • Vulnerability to economic contraction and housing market changes, as the value of residential properties is influenced by market variables including demand fluctuations, interest rates, and the local economy.
  • Occasionally, difficulty in finding reliable tenants can lead to prolonged periods of property vacancy.
  • Delayed receipt of monthly rent from tenants due to the lack of consistent income sources for renters, forcing them to secure rent payments from alternative sources.
  • Regular maintenance is required for residential properties, especially concerning issues like plumbing and wooden flooring due to frequent water usage, impacting their quality over time.



Advantages of commercial real estate in Turkey:


  • Commercial properties generate high investment profits, provided they are situated in prominent, strategic locations within the city. Additionally, the increase in investment value over time enhances expected profit margins.
  • Commercial properties cater to a large demographic of tenants due to their potential for diverse types of businesses. This includes shops and stores for clothing, footwear, accessories, as well as conversion to grocery stores, cleaning supplies shops, household necessities, and more.
  • The rental value of commercial properties significantly exceeds that of residential properties because they are utilized for business purposes and generate daily profits. Rent can also be paid in advance for several months, as it constitutes a steady income source for both tenants and owners, ensuring timely payments without delay.


Disadvantages of commercial real estate in Turkey:


  • Commercial properties require a larger budget compared to residential properties, which can financially strain investors or make it difficult to secure the necessary funds. As a result, a wide segment of investors opts for purchasing Turkish properties in installments, and the likelihood of selling properties on an installment basis increases when they are under construction.
  • Commercial properties entail higher expenses due to factors such as inventory purchases, facility setup including shelves, warehouses, transportation vehicles, employee wages, taxes, company establishment costs, and more. Therefore, conducting an economic feasibility study is essential to determine the most viable types of businesses to embark on.

Investing in either residential or commercial properties in Turkey can yield satisfactory profits, varying depending on the property type. The key criterion for obtaining a profitable investment property and achieving its ultimate purpose is selecting a property with investment specifications within a strategic area and location. This requires collaborating with a reliable real estate advisor in Turkey.

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