Property in Bulgaria is a strong favourite with British overseas property buyers who have been buoyed by the potential for high capital appreciation. Whilst there has been undoubted capital growth, 42% in 2005 according to international surveyors Knight Frank, the property market had its problems like any developing country should therefore be treated with caution.
Some of the property in Bulgaria has been of a sub-standard quality and property rental potential has been overblown. Overseas property buyers have invested predominantly in the areas of Bansko, Sunny Beach and Sofia. In the main, these areas have been overdeveloped where supply outstrips demand. The prices of many properties in Bulgaria are out-with the budget that can be afforded by local residents and are reliant on overseas property buyers who buy for investment or lifestyle reasons.
Overseas property buyers hoping to rent out their Bulgarian property should ensure that their property has agreements with travel companies as Bulgaria is not the sort of country where tourists turn up and rent holiday apartments on impulse. Rental potential in many areas should be estimated at approximately 3%-4% net and not the 10% that is quoted by some. Genuine guaranteed rentals schemes are an attractive option to many investors as it gives peace of mind with regard to relying on a rental income, if necessary, and saves having to spend time marketing the property. Guaranteed rentals are not always genuine and are sometimes merely the result of the price increase in the property. Genuine guaranteed rentals can be given where the developer has agreements in place with tour operators and is therefore assured of occupancy levels.
Property in Bulgaria is still appealing for property investors. EU entry and the associated levels of investment as a result of membership will no doubt assist capital appreciation. Additionally, tourism levels are increasing making buying a ski property, golf property or beach property all the more appealing. The main consideration when buying property in Bulgaria is to focus on areas that are not over-developed. We can only recommend property in Bulgaria where our analysis has shown that there is good growth potential and importantly, the possibility to sell or rent at a later date.Ewan McGarrie writes about Bulgarian Property Investments at http://www.propertyinvestment.co.uk/
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