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Buying an Apartment in Bulgaria

The rate of construction in Bulgaria is phenomenal. Everywhere you look somebody is building shopping malls, DIY stores, hotels, houses and more commonly, apartment blocks. Buying an apartment property in Bulgaria is straightforward, hassle-free and still represents great value when compared with other parts of Europe. You don’t need to own a company or be resident here and for off plan builds you can take advantage of easy stage payments. But with so many to choose from do apartments still offer good investment potential?





Your motivation to buy

Be very clear about your motivation to buy an apartment. Are you looking for a holiday home, which will allow you to take more frequent vacations by easing the long term costs of booking through an agent? This is an excellent reason to buy an apartment and will save you money in the long-term as all you need to buy are your flights to Bulgaria. With more and more low cost airlines offering routes here the costs of getting here are coming down in price.

Coupled with this reason to buy, if you have children, you will be able to provide a safe haven for them to holiday with friends when they get older. Bulgaria offers a lively nightlife in a safe environment. Resorts are well policed and trouble minimal. Nightclubs also do not tolerate anti-social behavior and the strong presence of burly bouncers ensures that no-one becomes violently drunk or disorderly.

Many people disillusioned with UK life see an investment in Bulgaria as the first step in planning their future retirement. Buying now will save money in the long run as prices continue to rise leaving with them a permanent base in Bulgaria or an investment they can sell should they change their plans.

Don’t expect to make a fast buck with a quick resale unless you bought off plan at a low rate; some developers offer some bargain price apartments when they first advertise their off plan development and such purchases always yield good and instant returns but unless you bagged one of these bargains you should view your purchase as a longer term investment.

How to buy an apartment

Apartments can be bought either directly from the developer or through a real estate agent. To secure your dream pad, the agent or developer will set up a preliminary contract meeting where you will be expected to agree to the contract terms and pay the first stage payment or pay 10% of the total purchase price if the apartment is ready to move into.
Agents tend to schedule a preliminary contract meeting for the day after you have agreed to buy, but do not be bullied into this. You need to pay a cash deposit to the builder at the preliminary meeting as well as any fees due to the agent, getting your money transferred from the UK to a Bulgarian bank requires time; many banks may need notice of large cash withdrawals, transfers from the UK can take up to five working days. If you attempt to take out money from a cash point, you will be limited to 800 Leva per day regardless of how much you have in your UK account.

The agent or developer should also provide you with a lawyer (and where necessary a registered translator) to explain the contract to you. You will have to pay for these services but generally no more than 100 Leva. The contract must also be translated into English for you at the expense of the developer. If you are not offered legal representation, find a different agent or development. Do not be afraid to ask for amendments to the contract; this is a two way process and you are the client.

Rental Potential

Explore claims of lucrative rental incomes carefully. The rental market is indeed growing and with projected growth in tourism this growth is set to continue for the long term, however some developers guarantee up to two years of rental income, but sometimes this is no more than a sales technique to attract you to the build. What actually happens is the two years rental income is built into the price of the apartment. Developers pay you the rental income even though your apartment will not be rented out month by month and after two years it‘s down to you. Ask to see rental agreements with tour operators and get them translated into English. City based apartments are a different matter and a strong rental market exists here with plenty of reliable agents to service it but beware, city-based rentals are often for long-term contracts and may hinder your use of your holiday home.

The Cost

The choice and price range of apartments across the country is exceptional. In Sofia, prices start at around 500 Euros per square metre and you can expect to pay around 500 Euros (per square metre) for an apartment in the ski and Black Sea resorts. Bargains still exist in many up-and-coming areas; along the coast in Kavarna, 60 km from the city of Varna, you can purchase an apartment from 55,000 Euros, there is a planned yacht port and the town in close to the new Black Sea golf courses. Future development and expansion here is looking good; three years ago this town was a shabby off-beat area but today the centre has received a new lease of life and aditinct face-lift.

Buying Off Plan

Buying off plan still offers the best value and return on investment, especially if you can buy just as the apartments are released for sale. In the northern beach resort of Golden Sands, apartments in the prestigious “Iglika” development were advertised with prices from 47,000 Euros, a bargain when you consider that the penthouse suites within the same development were selling for over 500,000. The reality though, was that there were only two cut-price studios in the whole development of over 270 apartments. In fact, 80,000 Euros was closer to the real start prices.

Another sales technique to encourage you to buy off plan is to set an early completion date with penalty payments written into the contract should the developer fail to complete on time. The truth here is that developments are rarely completed on time because the proposed completion date relies on the majority of the apartments being sold in order to fund the build. Being realistic, add another year to the proposed completion date and you will not be disappointed.

Read the clauses regarding penalty payments very carefully, few developers pay out because there are get out clauses stating that if the delays are due to the electricity company’s failure to hook them up to the mainline electrics or the golden “bad weather stopped play” clause. Penalty payments may only cover the completion of your apartment and not the complex as a whole. Penalty payments are also minute and it is unlikely you will be able to afford a bath towel with the amount you would be refunded.

Get the most out of your purchase

If you purchase an apartment now, in five to ten years time you will have made a decent profit and will have hopefully enjoyed many carefree vacations in a beautiful up-and-coming country, which offers a safe environment for children, plenty of entertainment for all ages, warm friendly people and breathtaking scenery. There is much to choose from but research and location are the golden keys to a successful investment.