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Irish News Editorial April 2006
Buying Property in Bulgaria – What you need to ask!
Sales of property on the coast and in the ski regions of Bulgaria to purchasers in Northern Ireland continues to gather pace. The high exposure of the value for money and investment potential of the Bulgarian property market on television, radio and printed press is fuelling a frenzy of property buyers into the Bulgarian market.
With unprecedented access to information via the internet and a growing number of sales companies presenting their Bulgarian developments to investors in Northern Ireland it is growing more and more difficult to compare and contrast the huge choice of properties and settle on one to buy.
There are great opportunities to buy beautiful properties in great locations at affordable prices in Bulgaria but if you do decide to “take the plunge” it is important to do it in a sensible, cautious way based on real information and not “sales patter”.
Whether purchasing yourself or through a sales agent the following points should be explored fully to limit your chances of being disappointed by the whole experience:
1. Find out specifically who the developer is and his track record of developing property. You may not feel comfortable purchasing from a developer who has had to borrow substantial funds to purchase the land and who needs your advance payment to start building. Search for larger developers who can provide evidence of previous successful projects and are experienced in construction.
2. Even if you are purchasing at the off plan stage the developer or his agent should be able to furnish you with proof that they own the land that they are developing and that the title is clean. They may not always have the final detailed plan of the individual apartments but they should be able to provide you with evidence that the outline plan for the overall project has been approved. It is important to get an independent lawyer to verify all these documents and permissions before you hand over any funds.
3. When choosing to purchase a property it is important to compare them on a number of factors and not just the headline price. It is important to compare the size of the apartments, whether they are furnished or not, their location in relation to local amenities and what facilities are on site. Remember that you may want to sell this property at some stage so think about the factors that will make people want to buy your property over all the others that will be available.
4. If there is an investment motivation to your purchase, perhaps you are borrowing money here to make the purchase and will need some rental income to help pay for the property you need to really pin the developer down to what their commitment will be in the long term. Are they going to manage the site and organise the rental machine? If you are going to be left to manage the site and organise your own rentals you will have major headaches. Don’t be fobbed off by flippant comments like “We are currently speaking to tour operators”. This is no commitment – if they are serious about marketing the development to tour operators they should be able to give you detail even if a contract hasn’t yet been signed.
5. Be cautious with guaranteed rental schemes. Guaranteed by the developer or a tour operator / hotel chain? Guaranteed rental schemes can be gimmicks to attract buyers who like certainty but 5% guaranteed for 2 years by the developer could mean that 10% of your purchase price may be fed back to you over 2 years with no vehicle for providing any rental income in place for year 3. Often the best developments don’t need to guarantee rental income but are confident enough to run a “rental pool” in conjunction with a tour operator or hotel group.
Basically use your common sense and don’t be drawn in by “flowery statements”.
Ulster Property Sales Overseas have been selling property in the main ski resort and on the coast in Bulgaria for almost 2 years. They work with a small number of developers who have been chosen with all the above thoughts in mind. If you would like to benefit from their experience or would like any advice on purchasing property in Bulgaria you can contact them on 02890 456 146 or via the Overseas section of the www.ulsterpropertysales.co.uk website.
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