Blossoming buy to lets in Bulgaria

[Jain and Chris]

This is a press release which we sent out for the January edition of the magazine and I thought you might like to see for a balanced view on buy to let in Bulgaria:

While Bulgarian buy-to-let properties are still in their infancy, there are strong pointers for a healthy future in the rental market.

But, says Quest Bulgaria, beware of over-enthusiastic developers and estate agents. Buyers, it says, should proceed with caution.

The leading English language magazine for people living or buying in Bulgaria, the January 2008 issue outlines the pitfalls and plus points of the country's buy-to-let market. Over the past five years, it says, demand for rental homes has shown a dramatic increase, both from the consumer and supplier. The arrival of low cost airlines from all over Europe, the growth of sea, ski and golf markets, plus increases in city-based jobs as foreign companies move into Bulgaria, are all fuelling demand.

Watch out, says Quest Bulgaria managing director Chris Goodall. "There are pitfalls", he said, "but the returns can be good. There is money to be made by investing wisely. Before you buy, research the market thoroughly and assess realistically whether the rental income can pay part of the mortgage on a rental home.

"It's all about home-work. Do it, think about it and then, if you're happy about it all, take the plunge," he added.

The tourist summer season, says Quest Bulgaria, is short with the main holiday rental period running from May to September with a peak in July and August. However, that might increase in the future with year-round golf.

With scorching summers for the sun lover, pleasant springs and autumns and the growth of low-cost airlines, visitor numbers continue to increase.

That plus the fact Bulgaria is rapidly becoming a cheap option for winter breaks (from December to April, peaking in January and February) mean low prices for property can offer buy-to-let customers a good deal.

In the villages there are many properties available but it's important to select a home with comfortable interiors, pleasant outdoor areas and, preferably, a swimming pool. Ensuring the location is near an airport, says the magazine, is also a key factor.

Clever marketing in neighbouring countries, such as Romania and Russia, is also important to success in the village rental market.

Quest Bulgaria's important advice is, "watch out for some developers and estate agents. Some promise guaranteed rental income of 10% and are prepared to manage the property for two years to hook in clients. Often the developer will build rental income into the price and is, effectively, giving you your own money back over a two year period. Once that's over you're on your own".

Richard Jones from Pride Property Services said: "The most popular holiday rentals are villas with pools, pleasant outdoor areas and close to the coast. Many apartment owners only require short term letting contracts but unless the property has a good view and a central location this is not easily achieved.

"It's a question of people thinking hard about their investment and doing their research and obviously long-term lets are the best for the investor."

'Hotspots' include quality city rentals in Sofia and Plovdiv and Varna frontline beach apartments. Areas to watch are golf spots and sea towns with access to golf courses.

Quest Bulgaria's January issue offers some top tips for anyone looking to enter the country's buy-to-let market and looks at two cases of people who've done it.

David and Johann McGrath from Inverness Scotland fell in love with Bulgaria two years ago and bought three bungalows. "We were impressed with the quality of the build and layout and have furnished them to a high standard," they said.

"We let them out for between £225 to £300 a week including airport transfers and the services of on site staff. However, we've noticed other nationalities coming so this year we are advertising the properties Europe-wide," added David.

Karl Chambers of Leighton Buzzard did a lot of research and bought a one-bedroom apartment three years ago in Sveti Vias. "The developers promised a period of rental income as part of the package but then backtracked so now we use our own devices. I'm still happy with it though but I see it as a medium to long-term investment with rental income the icing on the cake," he said.

[C_B_H]

In BULGARIA the holiday rental is not the Rental that the buyers want...all af the agency give you a managemant with 15% 20% and more returns per year ... DO NOT BELEAVE HIM...if your managemant agency is corect the maximum is 6% but many of the agency do'nt work so gut and your rental is realy low...

TO MAKE A GOOD BUY TO LET INVESTMENT IN BULGARIA BUY PROPERIES IN THE CAPYTAL SOFIA ,VARNA AND THE STUDENTS CITIES LIKE BLAGOEVGRAD...IN THE CAPITAL SOFIA THE RENTAL POTENCIAL IS 4% TO 8% YEARLY...if you have a good location your property will be guaranteed rent all year ..but with yearly contracts ...that is secure for you and your investment....The price i this cityes never be down becose the population there is awyes in grow..There are the student and bussines centers...and you have a good resale potential...The resale is easy becouse the buyers there are and the Bulgarian people not only overseas buyers like the holiday properties...in the last year the bulgarian banks have a 40% grow in the mortages...In the next year the bulgarian standart of living will be more up level and the people will can to get more mortages and buy a property...The bulgarian banks gived mortages when the buildings are finished , so if you sell a finished apartment its more easy.

good luck.

[reynolds]

Hi Jain & Chris, am just interested in your comment about the buy to let market in Sofia. We have a property just completed in Sofia. Its a studio of 57sq am just wondering with your knowledge on sofia, we would like to rent it long term to the local market at what ever rate it commands. We have just put in a nice fitted kitchen and ready for buying furniture if needed, but would it be better to rent locally unfurnished on a year to year contract, if so how would we go on to find a tenant.

Your advice would be a great help to us.
regards steve

[reynolds]

It seems very strange, everytime i ask a question i get no answers!

[Jain and Chris]

Hi, I did send you a reply back to your pm.

But, in answer, it depends upon what return you want as to the best way to do this. A yearly contract unfurnished or furnished is perfectly possible in Sofia. However, with a studio you are likely to be looking at a tenant who is a business person (possibly international) who wants a ready made base or someone who is moving out from home so again wants something ready to move into. Possibly furnished is the better way to go?

All the best