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Making a Watertight Property Investment

It’s April and there is still no real signs of a glorious hot summer in the UK, in fact it looks more likely to be a rerun of last summer with about two weeks of genuine hot weather and the rest of the season full of unpredictable days, sometimes freezing, sometimes rainy and sometimes hot again. Under such conditions, it’s impossible to plan garden parties, or invite friends round to dine al fresco. It’s depressing to say the least, yet these brutal conditions synonymous with the UK climate fuel sparks of creativity in our old grey matter and more and more of us are planning escape routes from dreary old Blighty.

Number of UK Overseas Homeowners Still Growing

Today, around 800,000 UK households own property overseas. The figure has increased at a staggering rate by around 45% in just two years and analysts predict that the figure will exceed two million households by 2025. Additionally 1 in 8 people over 55 is expected to emigrate from the UK in 2010. A survey by research analysts Mintel highlighted the reasons why Britons opted to buy overseas and found that the two largest groups were the “sun worshippers” and “property speculators” both of which accounted for 62% of those interviewed with an equal 50:50 split. “Multi-purpose investors” i.e. those savvy business people who invest in areas they perceive will make them money accounted for 22%, whilst “'retirement investors” made up the remaining 16%. A poll conducted by British building society Alliance & Leicester International (ALIL) found that the sun-seeker group accounted for 50% of those interviewed in their recent survey. Expats who had chosen to live abroad permanently rated standard of living and safety as their joint second favourites. A slower pace of life was rated in third place. The biggest downfall of moving was the fact that more than half of the expats interviewed missed their family.

New Start Bulgaria

If you are disillusioned with life in the country you live in or would like to at least have an overseas bolt hole to escape to now and again, then it is worth considering investing in Bulgaria. It offers a fantastic climate made up of four distinct seasons so the weather never becomes unbearable or too much of the same thing. It also has the lowest cost of living in Europe with a loaf of bread costing 90 Stotinki, a meal for two anything from 7 lv. and a packets of cigarettes 2.40 lv. More importantly it also offers a safe environment and excellent education system and a relaxed pace of life. What is more, property prices are still the lowest in Europe, even in the capital and since the emergence of the global financial crisis prices have fallen to 2007 levels making it an excellent time to buy. Bulgaria as a country has undergone some significant positive changes over the last five years. This has lead to substantial economic growth and increased foreign investment; many people who bought land and property here over the last five years have seen double digit growth on their money and despite the credit crisis, the long term outlook for a return on investment still looks good. Of course the recent instability within the financial markets has had a devastating effect on the UK property market making it a little more difficult to just sell up and go, but the UK rental market is very strong and renting out your UK property is one solution to getting away from it all and paying off the mortgage.

Become a Savvy Investor

The ‘pioneers’ who came over to Bulgaria over five years ago, when the property boom was starting, were often buying blind. Small investments overseas were a new phenomenon amongst the masses but there was little useful information to help people to buy sensibly in Bulgaria. The TV programmes jumped on the second home bandwagon as did the press, but their advice covered so many markets and was not always appropriate to Bulgaria. Today all of that has changed! There is a wealth of useful and powerful information on Quest Bulgaria alone as well as on many other property investment sites on the internet. Use this information to research and choose the investment that best suits your short term and long term needs.

Top Tips for a Sound Investment

Check out the population growth in potential target areas. If the population is growing then your property is going to be easier to resell. If it is shrinking, which is the case in some inland villages then it is probably not a good area to buy in because it is unlikely to experience a sudden surge in population for no apparent reason. Young Bulgarians are avoiding village life like the plague.

Is the area you want to buy in attracting new businesses or are they closing down? They don’t need to be massive factories; a village or small town, which has attracted several shops and a couple of bars is quite a thing for rural Bulgaria. Check out the municipality websites – most of them are in English – to get a true picture of what the area has to offer.


What level of investment is being spent on the infrastructure? The EU are still pouring money into Bulgaria despite the problems encountered with fraud and evidence of this is visible around most large cities. If you are looking at areas like Plovdiv and Rousse it is worth noting that airports are scheduled to be developed in these areas. This is not a bad thing! On the contrary easier access will attract more people making long term re-sales much easier.

Try to make a rough profile of foreign buyers in your area. There will be little information around on this front, but it is a vital key to determining resale profit. Talk to or email lots of real estate agents to get their take on this. In broad terms, the British bought renovation projects in the country and apartments in the resorts. The Russians only buy in resorts and want front line luxury – this means overlooking the sea or next to the ski lifts with coastal property being the favoured option. Scandinavian buyers want modern, well built property with all mod cons and high style. Look at the growth rates of foreign buyers too and follow those with the largest growth. The domestic market will grow as the economy becomes richer and city apartments are in demand here.

Correlate markets that may be undervalued with their potential to grow. Dobrich is not one of the most beautiful cities in Bulgaria, but it is attracting new developments and its population has grown yet property prices are low. The clever money will focus on areas with good potential for growth rather than on first impressions on your first ever viewing trip.

You may have no intention of renting out your property when you first buy it, but looking into the potential rental market is a sound move. You never know what is around the corner and the next buyer may want to rent out. Speak to rental agents about the best areas to buy in and ask how much money each area commands.


Don’t Let Your Heart Rule

So many investors still come over to Bulgaria to buy property with a very flimsy brief and little knowledge of what they really want to buy. Thoughts focus too much on what they want and what they like rather than on practical aspects like what will sell or rent well should they need to claw back cash. Even those who want to make an investment to supplement their pension in future years rarely consider the re-sale potential in 10 years time. There is far too much assumption that all property markets are like the UK – ‘wait ten years and no matter where you bought, prices will have gone up.’ Unfortunately this is not the case here and it is worth bearing in mind that whilst the incentive for each person buying abroad may be different the gauge of a solid investment hardly ever does.