How to start investing in Turkish real estate funds?

It is known that real estate investment funds in Turkey can be licensed and established by investment fund management companies, or real estate portfolio management companies, and fund management works to raise money from investors in exchange for shares that they own to serve as their participation in the fund, each according to their share.

How to invest in Turkish real estate funds can be summarized in a few general points:

• First: It is necessary to understand the principle of investing in real estate funds, even if it is a general understanding so that the investor is aware of the requirements and risks of investing in these funds, and the strategies followed in this regard.
• Secondly: After that, the journey of searching for the right fund for the investor's aspirations, and comparing between funds to choose the most suitable one.
• Third: Applying for participation in the selected fund, after securing the required documents and signing the agreements between the two parties.
• Fourth: Opening an investment account to transfer money from it to the contracted fund.
• Fifth: Hence, the duty of directing the fund's investments falls on the fund's management, while the investor must follow up on the periodic performance reports issued by the fund's management, to base his decisions on them.

How to evaluate real estate funds?

To evaluate REITs scientifically, the investor or his advisor must compare the most important information that differentiates REITs, the most important of which are:

• The team overseeing the management of each fund, their competence and experience in their field, and the achievements of their CVs in the investment and real estate sector.
• The advantages of investing in each fund and the privileges granted to the investor.
• The performance of each fund in previous investment cycles, and the investment successes or failures achieved.
• Investment goals and plans, diversification of assets between real estate types, distribution, and transparency in dealing with and publishing this data and information.
• Profit distribution plan: Quarterly, annual, or otherwise, by looking at each fund's prospectus.
• Expenses and management fees, which usually differ from one fund to another, burden the fund with financial burdens that affect investment results.
• The investment risks are borne by the upcoming investments, and comparing the risks between each of them.
• Risk management, risk management plans, and risk management strategies

Everything else is a matter of substance.

Common mistakes to avoid when investing in Turkish real estate funds

There are many common mistakes made by new investors in real estate funds, and those interested in this type of investment need to be aware of them:

 Lack of portfolio diversification

Taking into account the diversification of the investment in all its categories contributes to preserving its capital against the crises that may befall an investment sector. By diversification, we mean that the capital is distributed among real estate types (residential, commercial, and industrial parts), geographical areas (in the most important Turkish cities or outside Turkey), and that the investment includes the real estate cycle in all its stages (construction, maintenance, leasing or sale).

 Rushing investment decisions

Hasty decision-making without following scientific controls may lead investors to severe damage to their savings. Therefore, it is not permissible for an investor to make decisions impulsively or hastily, without being based on adequate knowledge or expert scientific advice, while giving those decisions their right to careful study.

 Neglecting fees and costs

When comparing funds, the investor should pay attention to the value of the different management fees charged by the funds, while also being aware of all the hidden costs that may not be obvious at the beginning of the investment, such as opening and exit fees, which will usually be deducted from the profits.

 Failure to regularly monitor performance

An investor in one or more funds should regularly review the performance reports issued by the fund's management and compare their results with the investment objectives presented by the fund, or even the investor's vision and goals. Based on these reports, the investor can make additional decisions to rebalance their portfolio, such as injecting more money or rearranging their investment allocations as necessary.

Tips for new investors

Here, it's worthwhile to talk about some essential tips for investors who are new to real estate fund investing:

 Being patient and disciplined

Investing in the real estate sector is characterized as a medium- to long-term investment; for the investment to yield its desired profits and good returns, investors in real estate funds must be patient and disciplined, with the vision to make the right decision at the right time to maximize profits and avoid losses.

 Continuous learning

One of the most important factors for success in investments, whatever they may be, is continuous learning of their tools and rules, and keeping abreast of all the new developments in their field and the latest news; as having the reins of knowledge will constantly open new horizons for the investor, and will put the investor in a position of mastery of his decisions.

 Networking with other investors

It is also advisable to keep in touch with the management of the fund in which you are participating and to attend general and periodic meetings to stay informed about all the latest developments in your investment.

 Tax planning

It means making financial and investment decisions in advance, to minimize tax liabilities on capital, within the framework of the applicable tax laws and regulations, which contributes to reducing the tax burden as much as possible. For example, investing in some investment funds has zero taxes for a specific period according to Turkish law, so it is important to know the dates on which taxes will have to be paid on the investment to make the appropriate decision accordingly.

Invest in real estate funds in Turkey with Oragon

Through our specialized team and our significant investment footprint in the Turkish real estate market, we at Awagon have been able to achieve a promising investment model with sustainable growth prospects. Oragon has been able to bring together significant real estate achievements under a broad umbrella that includes some of the brightest names in the investment and real estate sector.

This is an invitation to all those who wish to benefit from our investment opportunities and our professional business model, through your direct contact with our investment advisors or Oragon's management team, where you will find full and accurate answers about everything related to investing in our real estate funds, the important advantages that can be obtained, and the additional services that we can provide you with, such as applying for Turkish citizenship for investors wishing to take advantage of the relevant law, or otherwise.

Edited by Oragon Company ©