What is the average payback period?

What is the payback period and how is it calculated

The payback period (amortization period) is the number of years it takes for the funds invested in purchasing real estate to be fully recovered through rental income. The formula is simple: property price divided by annual net rental income. If an apartment costs €150,000 and the annual rent after expenses brings in €10,000, the payback period is 15 years.

The flip side of this metric is the annual return (ROI). A 13-year payback period corresponds to roughly 7.7% annual yield. For comparison: in most European countries this figure rarely exceeds 4–5%, making the Turkish market especially attractive to investors.

Average payback period in Turkey: 13 years – the new benchmark

According to analytics platform Endeksa, in May 2025 the average payback period for housing in Turkey reached 13 years. This is the lowest value in the past five years. Back in 2022 the same indicator was 18 years, and five years earlier it was 23–24 years.

This significant shortening of the amortization period is the result of two opposing trends:

• Rising rental rates. Since July 2024, Turkey has lifted the cap on rent increases (previously a 25% annual ceiling was in place). This allowed landlords to bring rates closer to market levels, sharply boosting yields.
• Slower house price growth. High mortgage interest rates have reduced real demand for purchases, curbing price growth per square meter. The annual increase in housing prices in dollar terms has slowed to 11–12%.

Thus, today’s investor gets a higher rental stream at a relatively more affordable entry price – the formula for an ideal buying moment.

Payback by region: where it’s most profitable

The averaged 13 years is only a guideline. Actual payback periods vary greatly by location:

Istanbul

The country’s largest metropolis shows stable demand for long-term rentals. Average payback period is 13–14 years. Key drivers: business hub, universities, year-round occupancy. Rental yield is about 6–7% per annum. Winning districts: Beylikdüzü, Küçükçekmece, Kadıköy.

Antalya

The resort capital of Turkey’s south is attractive due to a combination of long-term and short-term rentals. Yields here can reach 7–8% per annum, with payback of 12–14 years. Properties in Konyaaltı and Lara are especially liquid.

Alanya

One of the leaders in rental returns: from 5.78% to 7.11% per annum according to various estimates. Payback is 13–15 years. Districts Cleopatra, Mahmutlar, and the center show the best results thanks to a year-round tourist flow and developed infrastructure for expats.

Ankara and other cities

In the capital and some eastern provinces (Şanlıurfa, Gaziantep) payback periods are above average – from 16 to 19 years. The reason: lower rental rates at comparable purchase prices.

Muğla (Bodrum, Fethiye, Marmaris)

A premium resort region with the longest payback – up to 19 years. High entry price is not always compensated by rental income, but the bet on capital appreciation is traditionally strong here.

Short-term vs long-term rental: what shortens the payback period

The choice of rental strategy directly affects ROI:

• Long-term rental (from 6 months) provides stable, predictable income of 5–7% per annum. Minimum hassle, but also lower returns. Well suited for Istanbul, Ankara, Izmir.
• Short-term rental (daily, up to 100 days) in resort areas can bring 8–12% per annum, reducing payback to 8–10 years. However, it requires a license (regulated by law since 2024), active management, marketing on Booking and Airbnb, and consideration of seasonality.

In practice, many investors combine formats: summer – daily for tourists, winter – long-term for expats. This mix ensures maximum occupancy and income.

Factors that accelerate payback

1. Proximity to the sea. Properties within 300–500 meters of the beach rent for 20–30% more and have minimum downtime in season.
2. Complex infrastructure. A swimming pool, fitness, security, gated territory – a must-have set for competitive rental.
3. Layout. The 1+1 format is the most liquid: affordable purchase price and high tenant demand.
4. Buying under construction. Entering a project at the excavation stage gives a 20–30% discount off the final price. By the time of delivery, the value is already above market, and no mortgage is needed.
5. Developer installment plan. Interest-free programs for 2–3 years allow you to lock in the price and pay in installments while already renting out the property.

Hidden costs: what eats into profitability

When calculating the real payback period, it’s important to consider not only the purchase price but also associated costs:

• Title deed tax – 4% of the cadastral value;
• Agent’s commission – usually 2–3%;
• Annual property tax – 0.1–0.3% of the cadastral value;
• Utilities and aidat (complex maintenance fee) – €50–150 monthly;
• Insurance (DASK – compulsory earthquake insurance);
• Management company (for short-term rentals) – 15–25% of rental revenue.

Taking all expenses into account, net rental income is usually 1–2 percentage points lower than the “gross” yield. It’s the net figures that should be used in payback calculations.

Outlook for 2025–2026: trend towards shortening

Experts agree: the payback period of Turkish real estate will continue to shorten. This is driven by:

• expected easing of the Central Bank of Turkey’s monetary policy and a reduction in the key rate;
• a steady inflow of foreign tourists (over 60 million in 2024) and growing rental demand;
• limited supply of liquid properties in coastal locations;
• inflationary cushion: rental rate growth in lira outpaces the strengthening of the national currency.

Locations with payback in the 10–13 year range will be at the peak of investment attractiveness over the next two years.

Conclusion

The average payback period for property in Turkey is 13 years as of 2025, and this is the best indicator in the last five years. With a smart choice of location, rental format, and property management, it’s realistic to achieve 8–10 years. The key to success is buying in a liquid area with tourist or business traffic, attention to the complex’s infrastructure, and a professional approach to leasing. The Turkish market today is one of the few in Europe where rental yield is combined with capital growth potential, and the investor gets not just numbers in a report, but a personal asset by the sea.