Back to Bulgaria 2

Bulgaria Property | Back to Bulgaria 2

Now, let’s get back to….Bulgaria

As I wrote in my previous articles, the mass media and only the mass media determined lots of people to invest in Bulgaria. One should wonder, why all this fuss about Bulgaria as there were other markets advertised as well.

True, but as I said this one came out the blue and determined a lot of average western citizens to invest (sometimes their lifetime savings) in the “famous” Bulgarian property.

I cannot deny the fact that many of them made good profit as it all depended on when and where they bought.

So let’s start.

I will not disclose the source unless you ask me to.

All these are comments made by people already living in Bulgaria, and owning a property.

All the comments are from 2008, unless specified. In fact there is only one written earlier.

 

“To resale our house , who was in a good location, overlooking the beach of Albena, it took 6 months    and then we resell it cheapest that the purchase.

How to sell a old one when there are too much of new houses or new flats for sale everywhere?

Bulgarians have built too much, they killed the resell market.”

  

“What puzzles me is, who is buying the ‘resale houses’ after the Briton investor has put on their fat profit? It makes the houses ‘not that cheap’ and as the resale market is slow why would you bother?

In my opinion I think the bubble has already burst as far as making a quick buck. With so many houses for sale it’s a buyers’ market, and its time the people with the money in their pockets stopped paying stupid prices for property expecting to double their money in 2 or 3 years. They may do that on paper but selling may take forever. Let’s get back to reality, there are more houses in Bulgaria than there are buyers, houses should be cheap its economics, in fact I would think you are one of the lucky ones if you managed to sell for a big profit. If you’re buying at today’s prices then you had better be prepared for the long haul.”

There are probably more people looking to sell their Bulgarian than anyone can possibly know. These are horrendously difficult times and there is probably a lot of confusion and heartache as well as worry as to what to do for the best. “
Another one:

“Because of worldwide economic and financial chaos, money is tight everywhere. The first thing to suffer is the “luxury” end of the market spectrum. This includes things such as “holiday homes” and even holidays themselves.
The Pound has fallen, not just against the Euro but against a basket of currencies, by some 10 to 11 per cent since the beginning of autumn 2007. Gone are the heady days of January 2007 when, because interest rate increases were anticipated, 1 GBP bought 2.88 to nearly 2.90 Leva. You will be lucky if you can get 2.62 Leva today.
Only a matter of a few days ago the Pound fell to its lowest level ever against the Euro (between 1.31 and 1.32 Euros to the Pound). The Lev is tied to the Euro at 1.96.
This all seems like bad news but, as you must realise, it is always the case that an ill wind can blow somebody some good.
Even though you can see that the Bulgarian property market is static and prices falling, you may be able to turn this to your advantage if you change your thinking.
You might think – and understandably so – that you will be losing money if you reduce the price of your property (in Euros) to below the price you paid for it. This is not necessarily true.
Yes, of course, it would appear to be a loss in Euros but you must remember that you paid for your Euros in Pounds at the beginning.
So what am I saying? Consider this: if you bought your property for a total investment, say, of 60,000 Euros when the Euro stood at 1.48 to the Pound it would have cost you 40,540 Pounds.
So basically, if you are looking to sell and repatriate the proceeds, you are NOT looking for a minimum of 60,000 Euros to get your money back.
At the time of writing this, the Pound is standing at 1.34233 Euros or conversely 1 EUR = 0.744974 GBP.
If you were to sell the property for the same price in Euros now, your 60,000 Euros would buy not just 40,540 GBP but just a couple of quid under 44,700 GBP. This is 4,158 GBP (about 10.27 per cent) more. You will all know that ensuring a sale of property depends on how you price it in the market. Whether the market is rising or falling, you have to price “ahead of the market”.In terms, and this is not rocket science, if you reduce the price of your property in Euros by 10.27 per cent and actually sell it and then repatriate the funds your value in GBP will actually be the same.”  

This is a small fragment written in 2006:

 

“There seems to me to be a lot of doom and gloom surrounding the Bulgarian property market, especially Sunny Beach. Skeptics continually harp on about how it is over developed and people should steer clear. However, the fact seems to be missed that tourism to Bulgaria and ESPECIALLY Sunny Beach is going up and up with this year registering their highest EVER tourist levels. Even 18-30’s now go there!”

 

Another:

“I am looking to buy in a village in the middle of nowhere. And it’s these prices that make me wonder…How can these prices be rising when no one is buying? Especially the resale’s…”

 

“If you are the national of a Member State or a State which is party to the European Economic Area Agreement (EEAA), and are legally resident in Bulgaria then you may personally own the land on which your first (primary) residence is built. You can not personally own the land any additional property is built on. The maximum date this can continue until, at present is 1st January 2012, but can be shortened by the Bulgarian Government; a review is due during 2009.

So the only way to own the land in Bulgaria on anything other than your primary residence is via the company route, this includes second homes for persons living in the UK/Ireland.”

 

“Notwithstanding the obligations under the Treaties on which the European Union is founded, Bulgaria may maintain in force for five years from the date of accession the restrictions laid down in its legislation, existing at

the time of signature of the Treaty of Accession, on the acquisition of ownership over land for secondary residences by nationals of the Member States or the States which are a party to the European Economic Area Agreement (EEAA) non-resident in Bulgaria and by legal persons formed in accordance with the laws of another

Member State or of an EEAA State.

Nationals of the Member States and nationals of the States which are a party to the European Economic Area Agreement who are legally resident in Bulgaria shall not be subject to the provisions of the preceding sub-paragraph or to any rules and procedures other than those to which nationals of Bulgaria are subject.”

 

“More empty houses, maybe? In some places you can find entire villages with only a small percentage occupied. Buyers should wonder if there might not be a very good reason for this…”

 

“I bought my original house as a holiday home in 2005. However, as somebody has already stated, needs and expectations change, and when I decided that I would like to live in Bulgaria full-time, I did not want it to be in that particular house, in that particular village. The garden was very small by Bulgarian standards (and not very large by English standards, either!) and I decided that, if I was going to spend all of my time there, I wanted more land in order to grow things and keep some animals. I also wanted to live in a house where I had neighbors nearby, and with easy public transport into town and other villages. I have now bought in a large village with plenty of people around, and although I made a loss on the house that I sold, I feel that I will be much happier where I am now.”

 

“The bubble has burst, and the ****** paying stupid money for village properties will be stuck with them, A few lucky ones will find these people with more money than sense and sell them their houses, but the majority will have to wait years to make a sale if ever.

I’m talking village houses, not in the resorts.

And yes its location, location, etc, but the prices are unrealistically high in **** locations…”

 

The next is the best one and the last one for today. I will continue tomorrow.

 

“When my house in Balchik was for sale, i had only about one visit by month.

My house was not overpriced (I sold cheapest that I bought), and was advertised in several real estate agency in Balchik and Varna.

How can anyone sale sell when you have only one visit per month?

No buyer.

How do you want sell when you have in the same area a lot of houses for sell, old and new?

Fortunately I know a friend from the Czech Republic, as myself, who wanted to invest (hehe) in Bulgaria. :)

If it wasn’t for him, I think, I will still be trying to resell my house with my only one visit per month.

So to find the buyer was very hard, and to prepare all the documents for the notary was terrible too.”

 

You must admit that this one was the cherry on top.

 

Don’t get me wrong now; there are nice things too, about Bulgaria. What we discuss here is whether

the real estate in Bulgaria is able to generate R.O.I or not.

 

Just in case that there is more than one person reading my article (except myself), I wish you all a wonderful day or a good night, wherever you are.

See you tomorrow.