The six numbers
- Property price (P)
- Annual rent (R)
- Expected annual price appreciation (g)
- Expected annual return on your alternative investment (r)
- Annual ownership costs as % of price (m) — site dues, taxes, repairs, insurance. Typical: 1–2%.
- Transaction costs and tax on sale (t) — agent fees, deed transfer (tapu harcı), capital gains if applicable.
Everyone obsesses over (3) and (4) and forgets (5) and (6). The forgotten ones often flip the answer.
The break-even formula, in plain terms
Buying wins when:
R/P + g > r + m
That is: rental yield plus property appreciation needs to beat the alternative return plus ownership costs. Add transaction costs amortized over your holding period, and you have a usable rule.
Worked example: Istanbul mid-tier flat
Suppose: P = 12,000,000 TL, R = 360,000/year (30k/month), so R/P = 3%. Assume g = 30% (high-inflation nominal), r = 35% (deposit + fund mix), m = 1.5%, holding 5 years.
- Buy side: R/P + g = 3% + 30% = 33%
- Rent side: r + m = 35% + 1.5% = 36.5%
- → Renting wins, by ~3.5 points/year, before transaction costs.
Add tapu harcı (~4% of price split between buyer/seller) and agent commission (~2%) on sale: the buy case loses another ~1.2% per year amortized over 5 years. Renting wins by ~4.7 points/year.
The leverage twist
The above ignores leverage. With a mortgage, you only put down (say) 20% of the price and the rest is borrowed at the mortgage rate. This changes things in two ways:
- Your equity earns appreciation on the full property price, not just your down payment — leverage amplifies returns.
- Your effective cost is the mortgage rate, not the alternative return.
The revised condition: (g + R/P) > mortgage rate × (1 − down payment%) + r × (down payment%) + m. Mortgage rates in Türkiye 2026 have been higher than typical alternative returns, which typically tilts the answer back toward renting unless you have a strong view that price appreciation will exceed mortgage cost.
What inflation does
High inflation does not automatically favor buying. It depends on whether your rent moves with inflation (it largely does in TR, capped by law) and whether the property appreciates at or above inflation (in nominal terms it often does; in real terms results are mixed and city-specific).
The cleaner mental model: replace all the nominal rates above with real rates (rate minus inflation). The formula still holds. If real expected appreciation is near zero and real rent yield is 2–3%, your buy case rests entirely on those two numbers staying positive after costs.
The two factors no spreadsheet captures
Mobility
Selling a property in Türkiye is a 6–18 month operation and costs roughly 5–7% in friction. If there's any meaningful probability you'll need to move within 4 years — career, family, school district, divorce, anything — the buy case has to be much stronger than break-even, not just slightly stronger. Most people underestimate this.
Psychological dividend
Some people sleep better owning. The thought of a landlord ending the lease, raising rent above the legal cap (which happens informally), or selling the unit and forcing a move is real anxiety. If owning eliminates a recurring background stress for you, that has value — possibly 1–3% of price/year, comparable to the actual financial difference in many scenarios. This is a legitimate factor, not a rationalization.
The decision tree
- Will you stay 5+ years with high confidence? If no, default to renting.
- Is R/P + (your real expected g) > mortgage rate (or alternative return) + 2%? If no, default to renting.
- Do you have a down payment without depleting your emergency fund? If no, wait.
- If all yes: the math supports buying. Then weigh the psychological dividend and decide.
Common reasoning errors
- "Rent is dead money." Rent buys you housing and optionality. The "wasted" rent is comparable to the opportunity cost of money tied up in equity plus ownership costs.
- "Property always goes up." In real terms, often it doesn't. Look at real price indices for the specific neighborhood, not headline TL prices.
- "I'm paying someone else's mortgage." You're paying for housing services. The landlord is taking on the price risk; if prices fall, that's their problem.
- Ignoring the down payment. A down payment in a high-yield deposit is significant alternative return. Subtract this from the buy case.