Buying Advice

The Do’s and Don’ts

1. Never ever sign a contract that you do not understand, always en-sure any translation is done by a Government registered Translator, do not rely on a translation done in the Agency by their own staff.

2. The Estate Agency you choose should be proficient in Bulgarian law and process, they should also know the full specifics involved in buying a property here, and be able to offer ongoing and future back-up. An agency with established premises, staff and the appropriate Government license to operate with-in the UK is also beneficial, as you can then speak to that office to discuss any issues that may arise.

3. Before proceeding with any purchase make sure you travel here and carry out an inspection, do not rely on pictures alone on the internet, always see the property in person.  This should revel any problems, and highlight any work that may be required to bring the property up to standard.

4. Use a fully qualified and competent Notary who will check the full legal position of ownership and debts prior to any purchase being completed.

5. If you see a `must-have property` and are ready to put down a deposit make sure you have a clear understanding of the price you will be paying inclusive of any agency commissions, legal and government charges.

6. If you are arranging finance on the property, ensure that you have allowed an adequate period of time to not only finalize the loan, but also to transfer the funds to Bulgaria. This will ensure you do not lose your deposit and the property or face penalty charges in the event of delays.

7. Try to arrange your mortgage finance ‘in principle’ before travelling to view property in Bulgaria, thus avoiding any possible problems with delays.

8. It is best to arrange your mortgage in the country that you earn in. If you are going to receive rental income from the property, it may be an alternative option to make payments from this source.

9. Think about combining your cash with friends or family, it could mean a property with a pool is within your reach, rather than a cheaper property.

10. Check with the Estate Agent or vendor to ensure you are aware of the costs charged by the Legal and Government authorities for purchasing a property in Bulgaria.

11. Ensure the appointed person holding the Power of Attorney to act on behalf of yourself and your Company is competent in dealing with your finances, an appropriate University Degree is preferred. You also need to assure yourself they will act with due diligence and pay the local taxes and bills relating to your property, when and as they are due, especially if future rentals are envisioned. Failure to pay your taxes in some countries, such as France, Portugal, Bulgaria, Italy and Spain, will lead to court action and possible seizure of your property.

12. Remember that bills for Lawyer’s fees, Management fees, Local Council Taxes, Income Taxes, Insurance etc must all be met in your host country.

Why Bulgaria?

In Bulgaria property investment is now open to Foreign Nationals, the result is Bulgaria has experienced a phenomenal rise in property prices. It enjoys one of the highest stable macro-economic climates in Europe, with growth of around 4.5%, annual inflation of only 3.8%, a low taxation rate across the board and strong growth in tourism. In addition to this look what happened to property prices in countries like Spain, Portugal, Ireland, The Czech Republic, Poland and Hungary leading up to EU ascension? The national currency, the Lev, has been Euro-pegged since 1997, thus stabilising the economy. The Euro is set to replace the Lev as official currency around 2010.

Bulgarian property is better value for money than in any other holiday destination in the European continent. The country is still relatively undiscovered by tourists, so in Bulgaria property has yet to see the spiraling prices that typify areas such as Spain, France, Cyprus and Greece. For example, a 2-bedroom villa within walking distance of the beach costs around £70,000 in Bulgaria compared to around £170,000 in Spain, £200,000 in France, £175,000 in Cyprus, if you can find one, and £100,000 in Greece. A ski chalet in Bulgaria would cost around £60,000, compared to approximately £250,000 in France and Italy.

What about a country retreat? In Bulgaria this would cost from £6,000, a price virtually unheard of in any other region in Europe. Bulgaria is still a new holiday destination for the British holidaymaker, but more and more travel agents are now including it in their brochures, with it offering such good value for money it is likely to do very well. Bulgarian tourism is currently experiencing something of a boom, and for the first time Bulgaria has entered the top ten tourist destinations worldwide, in fact The World Tourism Organisation has placed Bulgaria near the top in terms of tourism growth. Bulgaria may not yet have the same 'destination appeal’ of Spain or Portugal but with its favourable climate, its safe sandy beaches and incredibly low cost of living, in combination with its historical heritage, that is about to change, especially the closer it gets to entering into the EU in 2007.

Bulgarian property makes a good investment when considering factors such as the rise in tourist numbers, the increasing awareness of the property market and the long term prospects for the country.

This means that in Bulgaria property will soon see big price increases. Whatever your reasons, whether buying a holiday home, a retirement home or making a capitol investment in a fast growing area, there is an outstanding opportunity to buy into an emerging and vibrant marketplace.

So where is best for you?

Bulgaria offers something for everyone within its 42,823 sq miles, you will find some of the worlds best beaches, skiing, fishing, and hunting as well as some fascinating archaeological finds. There are also several golf courses in the planning stage, although caution is the keyword in respect of these, wait until at least the early stages of construction have been started. As has been seen in the past in other countries, all too often the promised course has failed to materialize.

Currently the best returns on capitol invested are rural renovation projects. There is a very good demand for these properties once renovated and then offered back onto the open marketplace. The result is they are selling quickly to people looking for clean air and a quiet rural environment for retirement or family holidays, or simply a second home away from the hustle and bustle of their day-to-day lifestyle. With fishing, hunting and lots of other rural pursuits on their doorstep they offer something unique to Bulgaria that is not always available in other countries.

The second option is a holiday apartment for your own use. However be very cautious of anybody offering guaranteed rentals. These particular schemes were first seen in the Spanish and Portuguese resort areas as developers became more desperate to sell expensive apartments.

The apartment is usually overpriced in the first place, they then simply give you back your own money. Money that you initially paid to them within the inflated price.

If offered this type of scheme we would suggest you look at the price of other similar apartments in the same area that do not offer guaranteed rentals, you will usually find they are cheaper and closer to the real market value. Before making any commitment to this type of deal also be aware that at present the holiday rental market in Bulgaria is in its infancy. There are plenty of hotel rooms available in the resort areas through travel agencies in the UK, further restricting the rental potential of resort apartments.

If you just want it just for your own use, the price is right, and you are prepared to invest for the longer term, then a holiday apartment may be for you.

The third option is a villa or house, these fall into two broad categories, you can either purchase ready built, making sure you have a written guarantee against future faults of at least one year after construction, or acquire a plot of land and build to your own design. Before making any commitment to a land plot you wish to build on make sure that full regulation is in place, and not that it just falls into an area where regulation can be obtained later.

Too many people have found that changing the status of plots can be fraught with pitfalls for the unwary. Another wise precaution is to find a reliable company to oversee the build for you as Project Managers, this way you can ensure that your new property is being correctly built and stays reasonably on time.

If you follow these basic rules and advice you should find what you need in Bulgaria.