Bulgria: Investing in Real Estate

By: Jajay


But why my particular interest in Bulgaria? Back in early 2004 -- while still serving in the military -- I spent six weeks in the port city of Varna -- which rests on Bulgaria's northern edge facing the Black Sea. As part of a NATO contingent participating in a Partnership-for-Peace exercise, I had an opportunity to see a lot more of Bulgaria, its people and its infrastructure than perhaps the ordinary tourist just visiting for just a week or so.

I gotta tell you, I really liked what I saw. But what struck me the most -- apart from a lack of hamburgers -- was the price of real estate. Whether it was near the beach, in the city center or out in the country, I noticed that the price of real estate was amazingly low.

"I gotta get back her, some day," was my only thought. Hopefully that day will come sooner, rather than later.

In the meantime...

Bulgaria-- in case you didn't know -- is a country located in the very heart of the Balkan Peninsula between Romania and Turkey and shares common borders with Greece, Macedonia, Serbia, and Montenegro. I'm not the only one breaking a sweat over this place. As I mentioned earlier, Bulgaria has just joined the European Union in January 2007. As a result it has firmly embraced the twin principles of democracy and market economics, and is now a full member of NATO. This will open trade with North America.

Millions of euros have been poured into Bulgaria in the years leading up to the country's inclusion into the European Union. The money spent has stimulated the tourist sector and has already had a hugely positive effect on the Bulgarian economy.

According to www.bulgaria.com, Bulgaria enjoys a stable macro-economic climate with:

- economic growth of around 4.5% - one of the highest in Europe,

- annual inflation of 3.8%

- a low taxation rate across the board, and

- a strong growth in tourism.The sitewww.travel-bulgaria.com points out thatBulgaria property offers better value for the money than in any other holiday destination in the European continent.

The area is still relatively undiscovered by tourists, so Bulgaria property has yet to see the spiraling prices that have typified areas such as Spain, France, and Greece. For some cost-comparisons I turned to www.escapeartist.com, which noted for example that: - A 2-bedroom villa within walking distance of the beach costs around £75,000 in Bulgaria compared to approximately £180,000 in Spain, £200,000 in France, and £110,000 in Greece. - A ski chalet in Bulgaria would cost around £60,000, compared to approximately £250,000 in France and Italy.- What about a country retreat? In Bulgaria, this would cost anywhere from £8,000 - a price virtually unheard of in any other region in Europe. That's good news not only for the expatriateon a budget but also for someone with enough forward thinking to know that real estate investments in Bulgaria have the potential to bring back healthy rental returns.

In the roughly two-and-a-half years since my stay in Bulgaria,the Bulgarian tourism industry has been on a roll. According to the figures for 2005, the number of British tourists rose by 6.3% to 239,000, and the number of German tourists rose by 5.7% to 535,000. And for the first time, Bulgaria entered into the top ten tourist destinations worldwide for the UK market.

If memory serves me correctly, my visit to Varna -- which has its own fledgling resort area -- was in April and well before the tourist season. But even then, on what was literally the brink of Bulgaria's inclusion into the EU, dozens of hotels being built or extended, in preparation for the coming summer and beyond. Run a Google search on "Bulgaria.Tourism" or even "Bulgaria.Real Estate" and you'll see just how much new and existing property is currently on the market.

Even the World Tourism Organisation (www.world-tourism.org) placed Bulgaria near the top in terms of tourism growth. In 2003, a growth of 23% was reached compared to 2002 and the income comprised 13% of the country's GDP.

At this still-early point, Bulgaria may not have the same "destination appeal" of Spain or Portugal just yet, but I'm sure with its favorable climate, safe sandy beaches, and incredibly low cost of living -- in combination with its historical heritage -- Bulgaria's future looks rosy.

The site www.bestbgproperties.com points out that investing in bulgarian real estate is fairly straight forward. Bulgaria has one of the most liberal foreign investment laws in the region regarding Bulgaria real estate, as well as the foreign investors. According to the Bulgarian Constitution and legislation foreign persons and companies can invest in real estate in Bulgaria either personally or through a local legal entity. Generally speaking, foreigners as persons can acquire only buildings but not land. Only Bulgarian citizens and legal persons (including such with foreign owner) can obtain the ownership of Bulgarian land.

Therefore, the most popular and preferred by non-residents ways to become the real estate owners are:

- As far as houses, villas, flats and limited ownership rights (the right of use, the right to build a house, etc.) are concerned, you can directly purchase them as a person.

- When talking about Bulgaria real estate with land, you set up a company that will be the owner of the property. Setting up a company in Bulgaria is very easy. All you need is a good solicitor or barrister at law.

Of course, there are other ways to do it, like:

- Establishing a joint venture with existing local companies;

- Setting up a new venture;

- Acquiring a company through privatization;

- Making a portfolio investment;

Whatever your circumstances -- whether you decide to visit for the short term or you are looking at something more long term in terms of real estate investment, there are four main geographical areas that are ripe for investment in Bulgaria.

Let's take a brief look at what each has to offer:

Black Sea Region: For many years, only the Russians and the Eastern Europeans visited the Black Sea Coast as a holiday destination. But since the fall of Bulgaria's communist government and the opening of low-cost airlines in Europe, Bulgaria has successfully positioned itself as a budget seaside package holiday, appealing to a diverse mix of travelers from countries such as Germany, UK, Russia, and Scandinavia. The two airports of Varna and Bourgas make regular connections with the city of Sofia and offer charter flights from many European destinations in the summer months.

There are hundreds of places of interest along the coast, ranging from old pagan sanctuaries to the remains of ancient Roman and Greek civilizations and authentic cultural and historical monuments of the Bulgarian state. There are also many spa areas, mineral baths, and hot springs for those interested in relaxation. Checkout the site www.bestbgproperties.com for more information than you could possibly use on one trip.

Ski Resorts Region: Bulgaria is not yet known for its fantastic winter sport resorts - but that is probably about to change. Bulgaria's ski resorts region offers everything from skiing to snowboarding to ice skating. And during the summer months, tourists can enjoy hiking, trekking, and cycling in the mountains.

City Center Regions According to Colliers International global commercial real estate, office space in Bulgaria has tripled over the past six years, reaching a total of 220,000 m2 of office space available for lease. The majority of these offices are located in the urban city centre regions. A variety of foreign multinational companies have established substantial subsidiaries in Bulgaria, and employees of these companies require Western European standard buildings to live in rather than the ugly, crumbling tower blocks from the communist areas that are scattered all around the city centre locations.

According to an article on www.economist.com, it's advisable when looking for Bulgaran property sales, not to invest in these old, crumbling tower blocks but to focus your investment attention on off-plan developments and newly refurbished properties in high-demand locations that appeal to both foreign and professional tenants. The average expected yield for Bulgarian property sales with a city centre location is around 7-8%, with an expected rental growth of 10% per annum, and capital growth of 20%.

Villa Regions According to www.bestbgproperties.com, over the course of the past decade, a number of the more historic, grand properties in the cities of Bulgaria have been subjected to serious and significant renovation.

As these splendid residences are being restored to their traditional splendor, they are also being updated with the latest and most modern accoutrements available today.

While the prices associated with these historic houses for sale in Bulgaria are climbing, a person interested in owning and renovating such a residence can obtain such a property for a reasonable price if they look around. However, a person looking toward Bulgaria property for sale, which features a notable historic property in a city, needs to keep in mind that real estate experts predict the prices associated with these properties will sharply increase during the coming eighteen months.

One last bit of information and that concerns getting there. RyanAir in particular is gearing up for a variety of hops to Sofia, Varga and Bourgas with connections from virtually every major European hub. Several other low-cost carriers are currently or will be doing the same. Bulgaria has an in-country charter service as well with Bulgarian Air, and the site www.airlinequality.com pulls no punches in it's opinion of this airline -- so please check it out.

Maybe there's a small studio or house not far from the Black Sea with my name on it. And hopefully during the coming year when my family and I make a hop to Bulgaria we'll find it! Until then, keep your eye on the EU's newest member. It really is the next big thing.


bestbgproperties.com > Bulgarian Properties for sale