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Investing in Bulgarian Real Estate
by Andrew Nielsen
While most of the world are seeing property prices dropping, the prices in Bulgaria are still charging ahead. 2007 saw 10, 20, 30 and even 50% price increases in some areas.
The prices are rising for a number of reasons. As Bulgaria recently joined the EU, foreigners are seeing Bulgaria as a somewhat less risky place for investment. This means they’re much more willing to buy property and other investments in the country. Also, prices are still relatively low compared to other countries in the region. You can easily find a good quality one bedroom apartment by the black sea for 80000 EUR or a similar apartment in the capital. As prices are low, it can be very good business to buy for letting. The local currency leva – as other central and eastern European currencies – keep strengthening, making it easier for foreigners to afford property in Bulgaria. And finally, Bulgaria is seeing and is expected to see, continued strong growth for the next years.
So, if you want to invest, where do you go?
The capital Sofia is still a popular place to look for properties. Sofia is growing, business is booming and there is a good and healthy rental market. Importantly, an apartment in Sofia can be rented all year round. People come to Sofia for business or in some cases for pleasure. From the centre of Sofia, you can take a taxi to the nearest ski lift and enjoy a day of skiing. Which other capital cities offer that choice?
Holiday apartments are found in the mountains and by the black sea. Skiing is obviously popular in the winter, but the mountain apartment can also be let in the summer. The main areas by the black sea are around Varna and Burgas, Bulgaria’s second largest city. The places are very popular among tourists as the prices for food – and very importantly for drinks – are very low, compared to the rest of Europe. Also, the weather is good and warm from April to September allowing for a long season and the beaches are broad and not crowded. Sunny Beach, located just 15 minutes from Burgas airport, is a favorite among foreign investors. The market is developed yet almost all property was built there within the last 20 years and there is much choice when it comes to real estate. You have the basic apartment with no fancy extras or luxurious complexes with a high standard of materials used for construction, several swimming pools, spa center with steam bath, gym and massages, 24 hour reception and security etc.
What to choose depends on what you want from your investment. If you want a place used only for letting, then you must choose the place with good rental income and possibly one where you can let all year round. If you’re looking for holiday accommodation for yourself – with letting when you don’t use it – then you will need to choose the place where you yourself like to go.
A typical investment has the following parameters. Purchase price for one bedroom apartment in a holiday complex of very high standard, around 80000 EUR. Rental income per day: 40-60 EUR depending on season. Season 150 – 180 days. This can result in rental income in excess of 8000 EUR per year, leaving the investor with around 7000 EUR after paying maintenance costs. That’s interest of 8-9% before considering that the value of the apartment itself – as well as future rental – will increase over time.
In this article we have given an introduction to investing in Bulgarian real estate and described the reasons why doing so can be a good investment.
Invest in Royal Sun, Bulgaria
About the author:
Andrew Nielsen is a private investor who has successfully invested in real estate in central and eastern Europe the last 10 years.
Andrew manages a forum Royal Sun, Sunny Beach, owner's Forum for owners of apartments in Sunny Beach,
and currently has an apartment for sale: Apartment For Sale, Royal Sun, Sunny Beach, Burgas, Bulgaria
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