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Property Buying Tips
Updated: 2005-10-12

A House in Bulgaria 

Shelter Offshore

With the likes of Real Estate TV now promoting Bulgaria as ‘The Next Big Thing’ and many internet sites dedicated to property investment extolling the virtues of this Eastern European country, a lot of people from around the world are mulling over the idea of getting in on the game and buying a house in Bulgaria for investment purposes.

And that’s all very well, but Bulgaria is actually a fairly large country and while it offers a great deal in terms of real estate bargains a lot of thought needs to go in to selecting the right property type and location based upon your personal investment requirements. This article looks at the considerations you need to cover and answers the questions you need to ask before you buy that house in Bulgaria.

1) What are your investment objectives?

When buying a house in Bulgaria are you buying it to let out immediately to generate you a regular monthly income or are you buying it to use as a holiday home and hoping to sell it at a later stage when it has risen in value for example?

If you want to generate an income from your property, are you hoping to tap into the holiday market and rent for the season or would you be interested in renting out long term? If you want to get the higher weekly returns offered from the tourist market then do you want a property on the Black Sea Coast that can be let out during the summer months or a chalet in the mountains close to a ski resort that can be let out during the winter months?

If you want to let out long term who will you be renting to? Students, professionals or maybe those waiting for their off-plan properties to be built - where will your potential rental market be physically located?

2) What is your budget?

How much money do you want to spend on your property and will this be in the form of cash invested or in the form of a re-mortgage or an international mortgage?

Examine the market in Bulgaria to get an idea of the prices you will likely be paying on a regional basis and on a property type basis. Get a good idea of how large your budget will need to be, set yourself a maximum ceiling above which you will not be moved and enter the market as a shrewd and informed purchaser.

If you have cash with which to buy in Bulgaria you may be able to negotiate slightly better purchase terms but think about whether you want to place such a potentially large sum into a slow to liquidate asset class? Property can be hard to sell quickly should you ever need to get your money out of your investment.

If you’re buying with the aid of finance how are you securing the loan and what will your ongoing monthly costs be? If you’re borrowing against your primary home through a re-mortgage facility then understand that you could lose both properties if you fail to keep up the payments. If you’re not borrowing at a fixed rate your monthly payments could rise.

Think about the long term cost of buying on finance; make sure you’re comfortable with the likely payments. Alternatively think about the lack of liquidity issue if buying in cash and ensure you’re comfortable with this situation and that you have some money in reserve in cash and easily accessible just in case.

3) Which is your preferred location?

Your ‘preferred location’ question should tie in with your ‘investment objective’ considerations - after all, if you want to let out a ski chalet during the winter you’d be unwise buying a holiday apartment in Sunny Beach!

So, if you want a house in Bulgaria that you can rent out year round and generate an immediate and consistent income from you may be better off considering purchasing in Sofia, Varna or Plovdiv. These are the three largest cities in Bulgaria and are the areas where there’s the most demand for long term rental accommodation from students and professionals.

If on the other hand you want to buy a home for personal use which you hope will rise in value over the short term you should consider buying a place in the more universally popular areas along the coast or near to the major cities because at the moment and for the foreseeable future, those buying property in Bulgaria are foreigners looking to profit from the market or enjoy a holiday home abroad. In the short term these are the only people who might be interested in buying your property when you put it back on the market so you need to ensure your property is in a location that they will desire. Over the longer term as Bulgaria becomes more attractive to more people and maybe Bulgarians become wealthier you will have more potential buyers for your property so you can afford to speculate a little in terms of the location you choose.

If you want to let out your property during the summer months the beach resorts on the Black Sea Coast will bring you both the highest rental yields available and also the greatest potential for full occupancy. The most popular resorts include Sunny Beach, Sveti Vlas, Albena and Golden Sands to name but a few.

If you want to let your property out for the winter ski season, Bansko has the longest ski season of all the resorts but Borovets is larger and appeals to more people. Some of the newer resorts are currently cheaper for property offering greater potential for capital which of these options suits your main investment objectives?

4) What’s your preferred property type?

A house in Bulgaria will mean very different things to different people - it can mean an apartment on a new complex in Golden Sands, it can mean an old town house in need of restoration in Sofia, a romantic ski chalet in Bansko or a farm house miles away from it all in rural Bulgaria.

Your preferred property type will depend on your budget, investment objectives and location - it will also come down to your own personal taste. Once you’ve thought about the first three questions in this article you should find number four that much easier to answer. Furthermore, having decided on a location and firmed up your investment objectives you will be able to scan websites and local Bulgarian press and real estate agency listings for all the properties that match your budget and you can then view a good selection and decide whether an apartment, villa, chalet or house in Bulgaria is best for you.

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