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Buying Mistakes Which Cost

Although the credit crunch seems to be in full swing, the appetite for buying property in Bulgaria seems little diminished. The past few years have seen a heavy influx of Russians buyers, and now recently new interest comes from Romania, Siberia and Kazakhstan.

If you're thinking of becoming a Bulgarian property buyer we take a look at the ten most costly buying mistakes which are most frequently made when buying overseas.

If you're considering property in Bulgaria, here's a checklist of what to look out for to make sure it doesn't cost you tons of money on top:

1. Wrong Location
Not every spot in Bulgaria is going to be especially profitable. Always look carefully at an area to see if the locals are also driving future growth. If the locals are buying there, then the property market is sustainable. Consider the location with sharp eyes and reflect upon what will ensure its continued success. Many people have bought in a village only to discover a couple of months later than the place down the road was so much better. Don't commit until you are sure there is the possibility for long term growth and profit.

2. Wrong Property
Look at the overall market position. If there is an oversupply of apartments, then don't buy an apartment. Consider where demand exists and buy there. Were you only looking at where you'd put the kitchen or sleep the kids, rather than considering that you really need four bedrooms when the property only had two?

3. Tax Liabilities
Remember your tax liability at home. If you resell your property in Bulgaria or have a rental income from the property, then you'll have to pay tax on profits and capital gains tax. Add this into your calculations.

4. Title Deeds
Get a lawyer who will act for you only - not the agent or developer. Title deeds must be very carefully checked to ensure that it is clear if the vendor has the right to sell you the property. In Bulgaria, with inheritance laws, it is possible for many family members to own a property jointly. They must all agree to sell the property before it can be sold to you.

5. Inheritance
It is common place to think Bulgaria has the same inheritance laws as in your own country, particularly now that it is part of the EU. This is not the case. It is also unlikely that your Bulgarian property will be covered by your UK will. You may think that your property will pass to your spouse when you die but actually, because of Bulgarian inheritance laws, the property is likely to be divided up among many members of your family.

6. Currency
Currency fluctuations will have an impact on you if you are not inside the euro zone. When you sign your preliminary contract on your Bulgarian home, the price may translate at that time into, say, 80,000 pounds. However, when you come to sign the final deeds, the price, due to fluctuations in exchange rates, may have risen to 88,000 pounds. Avoid nasty surprises like this and talk to specialist currency brokers about how to offset negative currency fluctuations.

7. Tax Liability in Bulgaria
Property tax, capital gains tax, income tax, inheritance tax... check all these out before you buy so that you are fully informed as to any taxes you may have to pay.

8. Selling On
Many buyers never consider what might happen when they resell their Bulgarian property. It's all well and good buying a property and thinking you'll make a profit when you come to resell. But what if you can't sell it ? When buying, think long term about resale when the time comes.

9. Legal Advice
Don't buy without having your own independent lawyer, who will act solely in your own interests. Ensure they are experienced in property and that they speak English as well as Bulgarian. In the UK you wouldn't dream of buying a house without having your own solicitor, why would you do differently in Bulgaria?

10. Local Advice
If you were buying a property in Cornwall, would you use an agent based in Ireland? Not at all! So endeavour to find an agent who has representation in Bulgaria, particularly in the area you want to buy in. This source of local knowledge will be invaluable to you. Happiness is having good advice!

The above are the ten most common and the most expensive mistakes when buying property in Bulgaria. Common sense and thinking about your property purchase in the same way you would at home will mean that you won't go far wrong.

Get an independent lawyer, take your time and trust your own personal good instincts.