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Bulgaria Property Investing – The Way Forward?
Anyone with any interest in property investment abroad would have been hard pushed not to have heard about the potential growth area of Bulgaria. During the last 12 months, property prices have risen, on average, by around 25 percent. But remember, this is an average and some savvy investors have achieved a gain of 100 percent, in the last year!
This is not to say that the market has hit stagnation. On the contrary, Bulgaria has a very rosy future with further gains predicted. Currently, property is the fastest growing asset in the country and is still showing considerable growth.
Bulgaria has become increasingly stable over recent years, economically, politically and socially. The country is going to join the EU in 2007, which suggests that property prices will continue to rise, over the coming years.
Tourism is also a growing industry with approximately 4 million tourists visiting, last year, an increase of 13.5 percent on the previous 12 months. Interestingly, last year, the number of British tourists increased by over 60 percent. One of the main reasons that Bulgaria is so popular with tourists is that it offers such a wide range of holiday types including, ski, mountains and beach holidays. This year-round appeal means that tourists flock to Bulgaria every month of the year, perfect for the buy to let investor.
At the moment, foreign individuals are not allowed to own land in Bulgaria. Rather confusingly, foreign investors are allowed to own buildings but not the land! This will change when Bulgaria joins the EU in 2007, as property laws will have to harmonise with the rest of Europe, therefore allowing individuals to purchase land in Bulgaria. The relaxation of these rules is likely to lead to a considerable boom in foreign ownership and consequently in property prices. If you want to get in before the rush, it is possible to purchase property through setting up a Bulgarian company which costs approximately £650.
New build prices in Bulgaria currently start at approximately £20,000 for a brand new studio apartment; up to £120,000 for a luxury three bed apartment with superb views. Individual properties that require renovation vary dramatically in price and vendors are often up for negotiation so do your research and get haggling!
Buying land is also a very good way of maximizing gains in Bulgaria. Consider that a new build, off-plan apartment will sell at around 900 Euros per square metre, but that land with planning permission would sell at around 60 Euros per square metre. A conservative expert suggests that a property could be built (including the land costs) for 400 Euros per square metre. As you can see, the figures certainly stack up if you can cope with project managing a new build in a foreign country.
A real winning point that Bulgaria has to offer is the sheer variety of resorts. Beach lovers will be delighted with the choice of resorts, namely Albena, Golden Sands, Sunny Beach and Duni. Bulgaria has a Black Sea coast that is served by two airports, Varna and Bourgas. It is the beach resorts that have seen the largest surge in property building in recent years, with most off-plan apartments being available on the coast.
As well as the beach resorts, Bulgaria has internationally renowned ski resorts, which double up to offer wonderful mountain hiking opportunities, during the summer months. The Balkan Mountain range is the backbone of Bulgaria and offers a range of ski resorts for both beginners and experienced skiers. Bansko is currently considered to be the main resort; however, there are many other smaller resorts to choose from, should you want to get off the beaten track.
Sofia is the capital city of Bulgaria and offers wonderful investment opportunities. Many large international companies are investing in Eastern Europe, due to the cheaper yet dedicated workforce. More jobs mean more employees requiring central accommodation, a dream for property investors.
Bulgaria has so much to offer the international property investor, with something for every taste and budget. With a wide range of resorts and a growing economy, Bulgaria justly deserves a second look!
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