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Buying Strategy

You could be forgiven for thinking that anyone considering buying a Bulgarian property now is a little mad. If you look at it more carefully though, purchasing an overseas property right now is a good time. Not to make a quick return but to actually buy the property in Bulgaria which you want, in a country with wonderful climate and an amazingly low cost of living. In today's current financial situation, the real question is whether you can afford it.

Those living in countries where the effect of the credit crunch is most being felt, should not think that all overseas property markets are in the same boat. It is forecast by experts that British overseas property buyers alone will increase by 42% in the next couple of years. And who can blame them - many are disillusioned with the UK, high property prices even though they are going down, difficulty in obtaining financing, cost of living increasing daily, dreary grey weather...

With the crunch severely hitting western European property markets many experts believe emerging markets are an excellent option. The UK market is forecast to fall by 35% within two years. Thus, there is a huge number of first time buyers and investors looking abroad, including Bulgaria, to secure a property and make gains which they could not do in their home country.

These days, to obtain any reasonable rate on a mortgage, UK buyers have to cough up a deposit of 20 to 25% on any property they would like to buy. In the UK, with the price of a property in the 340,000 euros range, this percentage will equate to a deposit of around 85,000 euros, whereas in Bulgaria, on a property purchase of 120,000 euros, the deposit will be around 30,000 euros. Go on to then consider that you can buy a one bedroom Bulgarian ski apartment for as little as 65,000 euros, a new detached two bed house just outside a good town for only 65,000 euros; meaning a deposit of only 16,000 euros. A huge difference, particularly if you are a first-time buyer.

It is no wonder then that this has led to a number of first time buyers and investors buying property in Bulgaria as they realise that the deposit they would have to pay in the UK can buy a Bulgarian property outright.

Tips and Hints

If you are considering a Bulgarian property in an area where they are currently many resales or new developments (mainly ski and sea), then negotiate hard.

Follow the locals. Look for areas which are popular with the local market. You won't get much of a discount but it does mean property prices in these locations are sustainable not just by overseas investors - and will increase.

Sea and Ski
On the coast, buy front line. In ski resorts, next to the gondola. Endeavour to combine either with golf if possible.

Towns and Villages
Look for a town or village which is moving upmarket and has facilities. Avoid run down places.

Try to buy a property which is an architectural gem or a listed house, as they will always increase their value.

Beware guaranteed rentals. Even if this works out for the period cited, consider how you are going to rent the property when the guaranteed rental time runs out.

Don't bank on renting your property to cover any mortgage repayments.

Don't be tempted by lower quality property just because it is cheaper as it will not stand the test of time.

Better to buy smaller with quality build and in the right location. These properties will always be sought after.

Borrow the least you have to.

Investigate how to move your money to Bulgaria. Outside the Eurozone, currencies are not fixed and will fluctuate. You may have worked hard to get the price of the property down but why waste maybe tens of thousands on currency exchange.

Ultimately, affordability is the watchword when buying your Bulgarian property in today's financial climate. If you think about it, you could simply not buy that brand new four wheel drive, release the money and buy your own property outright in Bulgaria for the same amount. A much sounder investment!