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Bulgaria
– Property Hotspot?
We would describe Bulgaria currently, as a very
unique property investment opportunity and it is
worth taking a few minutes to understand the recent
history that has created this situation. In 1944
Bulgaria became a Communist state requiring all
property and land to come under state ownership,
this continued until 1989 when the country reverted
to democratic rule and returned the ownership of
property and land back to the people. Where previous
owners were no longer alive to reclaim their property,
relatives were able to do so and now virtually all
Bulgarians own outright land and/or property with
many families owning multiple plots. However, whilst
they are fortunate in owning such assets, they are
generally very poor and unable to modernise or develop
their property. Obtaining credit is also difficult,
requiring a well paid job to maintain repayments
and therefore, many Bulgarians are now selling off
their surplus land and property to raise money.
From an investment point of view, we would liken
Bulgaria to investing in property as it was in Great
Britain back in the 1950’s. Also, the South-East
of the country with its Black Sea coastline could
be compared for investment potential, to the South-East
of England. Property prices vary throughout the
country with the coastal regions commanding the
highest prices, the further inland you go, with
the exception of Sofia the capital, the lower the
price. Sunny Beach is one of the most well known
coastal resorts and with its large hotels catering
for package holidays, it has a recognisable western
feel and is of course very commercial. A 30 minute
drive south brings you to the port town of Burgas,
which has an international airport, wide variety
of shops and warehouse style supermarkets including
DIY.
Our web site is divided into main areas Houses,
Land & Apartments, below is how we would summarise
their investment potential.
Houses
From a western point of view, an average Bulgarian
house is built with a completely different usage
of space. Priority is generally given to rooms for
living; space for bathrooms and kitchens is of less
importance. Many of the older (cheaper properties)
have very little internal plumbing and outside toilets
are still very common. Unless we have described
a property as having already been modernised to
a western standard or new, which will be reflected
in its price, then the investment potential lies
with modernising the property for either personal
living or for resale and profit taking with building
costs far lower than the UK.
Most Bulgarian houses come with decent size gardens
of at least 500 sqm, there are many in quiet villages
within easy travelling distance to the coast and
ideal for anyone seeking to retire to enjoy the
wonderful nature and the “Good Life” growing your
own produce. The cost of living is low and the equivalent
to the UK Council Tax per year is on average - below
10 Pounds a year!
Old village houses with water and electricity are
now rapidly increasing in value because they stand
on regulated land (explained below) and therefore,
they can be quickly restored or rebuilt without
time consuming planning permissions and often have
the advantage of a mature garden; these properties
are limited in number, especially within easy reach
of the coast and will soon be exhausted.
Land
Land comes in two basic forms - Unregulated (without
building permission) and Regulated (with building
permission), the latter being more valuable. Whilst
it is possible to determine that a particular piece
of land within an area can be Regulated, the process
of bringing it into regulation is not automatic.
Each individual landowner must make a separate application
through the Court, a process that can take between
6-12 months and involves lawyer & application
fees. Whilst to a westerner such costs would be
acceptable to increase the value of the land, to
a Bulgarian where the average weekly income is probably
less than 25 Pounds, the process is simply not affordable.
Unregulated land, therefore, offers an excellent
investment opportunity to the person who does not
want to personally develop the land. Bringing the
land into Regulation increases its value, along
with the potential increase in value during the
period the process takes. Presently, there is unregulated
land available just behind coastal areas of development;
once all the first line land on the coast has been
developed, then the currently unregulated land will
become much sought after and an excellent investment
for the long term investor – especially the southern
coastline.
First line land (direct sea view) is always in demand
and is becoming less available, especially in the
current development areas; excellent investment
potential when available - anywhere.
Buying Property in Bulgaria
Until Bulgaria joins the EU, all foreigners wishing
to buy land (house with land) must do so by forming
a limited company; the procedure is quite simple
and the company does not have to trade in a business
sense. Your lawyer makes an application to the Court
for the formation of your company (you will need
to decide on a company name and who will be the
official company manager) and you will need to open
a company bank account, for this you will need to
deposit 5,000 Bulgarian Lev (1,800 Pounds or ˆ2,500 approximately)
whilst the application is processed – usually up
to 3 weeks. It is a normal and safe practice, to
give your lawyer power of attorney to complete any
transaction you are unable to conclude during your
visit.
Unlike the UK, the asking price of a property is
generally accepted as being the price and Bulgarian
sellers rarely negotiate. Buyers should also be
aware that most transactions in Bulgaria are still
conducted with cash; credit cards are not yet widely
in use. We strongly advise clients, to ensure they
have adequate funds available to secure a property
they wish to purchase; GB pounds and Euros are acceptable
with most property prices being in Euros.
Reserving a Property from Outside Bulgaria
Seeing a property on the internet you wish to purchase
and getting to Bulgaria before someone else buys
the property, clearly presents a problem that is
difficult to overcome; any arrangement cannot be
formal until both parties have at least signed a
Preliminary Contract (or you have given a lawyer
power of attorney to sign on your behalf) and a
deposit is paid
The first step is to contact us by either email
or telephone to inform us of the property you wish
to purchase and we will require the following information:-
Ref No. of the Property to be Reserved and Payment
Amount.
Full Name of Person making payment as shown in passport
with, Passport Number and Expiry Date.
Please note – when the purchase will involve the
forming of a limited company, the person who will
be nominated as Manager should make the payment.
We then approach the seller to firstly confirm the
property is still offered as per our original instructions
and if so, inform the seller that we have a buyer
who is prepared to make a non-refundable payment
to reserve the property; the payment will be refunded
if the purchase of the property is not completed
as a fault of the seller or the seller increases
the original asking price without the agreement
of the buyer, the refund will be made back into
a UK bank. The payment will remain with the Agency
until the completion of the property purchase or
Preliminary Contract and be used to secure all Agency
commissions with any balance then paid to the buyer’s
lawyer. Refunds will not be given when the purchase
of the property does not complete at the fault of
the buyer.
If you require any further information or assistance
please do not hesitate to – Contact
Us. |
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