What is Depreciation Period and Why is it Important?

When investing in real estate, one of the most curious issues is how long the investment will pay for itself, i.e. how long it will be recovered. This calculation reveals how many years the sales price can be recovered if the house is rented out and helps us understand the profitability of the investment. This process is called “amortization period”.

How to Calculate the Depreciation Period?
A simple formula can be used to calculate the amortization period:
Depreciation Period (Year) = Sales Price ÷ Annual Rental Income

For example:

If the price of a house purchased is 200.000 TL and the monthly rental income is 1.000 TL, the annual rental income will be 12.000 TL.
In this case, a depreciation period of 200,000 ÷ 12,000 = 16.67 years, which is approximately 16.5 years.
This is the time required for your investment to pay itself back. In Turkey, a depreciation period of 16-18 years is generally considered a “good” investment indicator.

Factors Affecting the Depreciation Period
The amortization period is directly related not only to the house price and rental income, but also to