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Bulgaria is the new place to invest |
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Still relatively unexplored, with beautiful sandy beaches, great ski resorts and a low cost of living, Bulgaria is the new ‘belle’ of the Balkans. PHILLIPPA ROBERTS goes east.
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Just a few years ago the small eastern European country of Bulgaria would have seemed an unusual place to purchase property, perhaps reserved for the more adventurous and experienced investor.
Yet, in a mere three years, Bulgaria has gone from a little-known emerging property market to the most talked about property hot-spot since Spain tempted the Brits to warmer climes some ten years ago.
What is it about this ex-communist ruled country that is suddenly attracting all manner of UK investors from the experienced, to the first-time buyer, from the holidaymaker to those seeking a second home in the sun?
Bulgaria is a country no larger than the UK, with a population of just 8 million: a visit to the country to view its sweeping green valleys, forests that stretch for miles and snow-capped mountains gives a true indication of the genuine beauty this country has to offer.
Where else can the purchaser choose between a villa with marina frontage, a city pad or a slice of winter wonderland all within a day’s travelling distance? It is this diversity in both climate, geography and investment opportunity that first attracts the intrepid UK purchaser.
Bulgaria has achieved much in recent years. Shaking off its communist-ruled past it is embracing western ideals wholeheartedly. Already a member of NATO and with a currency (the Lev) pegged to the Euro, Bulgaria is striving to improve in preparation for the proposed EU accession scheduled for 2007. It is this EU accession that is the main driving force behind the current property boom, as drawing from comparisons with other recently successful EU candidates (Hungary and Ireland) it is confidently predicted that EU accession will see the economy and housing prices rise with new confidence.
As a holiday destination Bulgaria is beginning to attract the necessary attention to offer a confident rental market. A three hour flight away and with the prediction of low-cost airlines entering the market after EU accession, Bulgaria is fast becoming a budget option for weekenders and short-haul holidaymakers. Once the playground of the eastern Europeans, especially along the Black Sea Coast, Bulgaria is beginning to appeal to a wider audience, thereby offering higher occupancy rates and, in turn, better rental returns on your investment.
Now really is the time to buy: EU accession is just around the corner and the country is becoming widely recognised as a property investment hotspot. The cost of living is still very low when compared with its EU neighbours, and Bulgaria has already seen property prices increasing by approximately 25% to 30% each year for the last two years.
With the UK property market now experiencing some stability after several years of growth, the economic climate in this country is encouraging for purchases abroad, as more and more people release the equity in their UK homes to fund that villa in the sun.
Buying a second home abroad was once reserved for the ‘rich’ or the serious investor, but that dream is now becoming a reality for more and more UK home owners. When 220,000 euro can secure a three-bedroom, two-bathroom villa in a sought-after beach frontage location with the promise of excellent rental returns when the property is not occupied by its owners, it’s easy to see why Bulgaria is appealing to all sorts of buyers.
However, as with any property market, even the mature UK market, there are pitfalls. Property law in Bulgaria dictates that foreign purchasers cannot own land in Bulgaria (this will likely change after EU accession). To solve this problem purchasers will need to create a Bulgarian company to own that land, a relatively straightforward process that shouldn’t cost more than 700 to 800 euro at most.
Always visit the proposed location of your property. You wouldn’t dream of buying a house in the UK without seeing it first, and with Bulgaria just a short plane trip away, there’s no excuse for not visiting the location to experience the country first hand. While there, look for the important facilities. This important part of buying abroad must never be overlooked, especially in an emerging market, as the infrastructure in emerging markets often has a long way to go when compared to our western standards. That rural villa might look appealing, but just how far is it from the airport? If you don’t mind travelling, consider that your potential rental clients will. Is there electricity and water on site? Amenities that we take for granted may not always be available in rural locations. Don’t assume anything. Always ask questions if you’re unsure as important information may not always be offered.
Employing a good agent will help remove the majority of hard work from your overseas purchase. With emerging markets it’s also important to choose an agent with a history of sales in that region. A new agent with little experience will use your purchase as a learning curve, don’t let their mistakes cost you. Choose an agent with a good reputation and with experience in your chosen market, whether that be Bulgaria or any emerging country. Make sure that agent will be there from the moment you reserve your villa, through to completion and, if necessary, ask if they offer an after-sales service – it could be invaluable during your first year of ownership.
Villas, for the majority, are generally more readily available on the Black Sea Coast than elsewhere, due to the luxurious lifestyle ambience of the coast. Prolonged sunshine during the summer months and a relaxed pace of life make this location perfect for the lifestyle or luxury purchase and of course the UK purchaser likes nothing more than soaking up the sun in foreign climes while sampling the local produce!
While you may have heard of Sunny Beach, this well-known holiday resort offers more in the way off ‘off-plan’ apartments than perhaps individual villas. The nightlife, restaurants, shops and long sandy beach are superb from a rental point of view. However, for a slower pace of life, look to the suburbs of these locations, or nearby villages. For example, the village of St Vlas is situated just a short 10-minute taxi drive from Sunny Beach, yet offers all of the facilities you’d expect from a luxury resort – a la carte restaurants, marina frontage, a plethora of pools, internet café, gym, tennis courts and more. It is here, in these sought after locations, that a villa purchase will return the best investment. Easily accessible facilities supply you and your clients with everything you’ll need, while the St Vlas village is just a short walk from the main area of development and the main centre of Sunny Beach is within reach for the occasional day trip.
Wherever you buy, as long as you have the right location, a quality build of character and individuality and the facilities to support your property, then Bulgaria can offer you excellent rental returns and/or capital growth.
Not to be forgotten in the rush to snap up your bargain home abroad is the true character of the country, and the warmth and friendliness of its people. This is a country that has flourished in its newfound limelight and appreciates the opportunities it’s been given. Now is the time to buy in this fledgling market, before the Bulgarian property boom becomes as mainstream as southern Spain seems to be.
Ever wished you could have invested in Spain 10 or 15 years ago? Look no further than Bulgaria, the ‘sleeping beauty’ of the Balkans.
Barrasford and Bird market the majority off-plan apartments on the coast, in Pamporovo ski resort and Sofia, the capital city. They currently have a three-bedroom, fully furnished villa in the popular Bells complex, St Vlas, for approximately £150,000. More details can be found at www.barrasfordandbird.co.uk or by calling 0845 600 1871.
Bulgaria is the new place to invest. |
