Re: Why Bulgaria?
Waiting for you Auto - you must be on holidays maybe in Bulgaria - as no discussion arises on Bulgaria without you chipping in.
Just waiting to see if there was still life in the "guaranteed rental" promotors! (Also getting to grips with my new laptop -- the old one expired!).
I am known as a Bulgaria "knocker" on this board, but if anyone reads my posts carefully they will see that I have less of an issue with the country and more with the agencies who misrepresent what they are selling. The extreme examples of this are the grossly inflated prices with reference to local market mores, and the infamous scam of so-called "rental guarantees" where buyers get their own money back minus handling charges and taxes!
The bubble has yet to burst in Bulgaria. The cracks will not begin to show until some time after the "rental guarantee" period had expired; apartment owners on the Black Sea and in the ski areas will fumble around for another year or so after that, going from agency to agency in the hunt for tenants, and then the penny will drop -- they have been well and truly scammed. Some will then console themselves that they at least have a holiday home, and will use it two or three times a year while fixed costs rise to a point where they could stay in a nice hotel for less money. Others will start to sell in the expectation of profits, but the buyers will be nowhere to be seen at the price point that they are expecting -- locals will never pay this kind of price for these properties.
Best case scenario in my view is that buyers will get out with a loss of around 30%, assuming that the market rises and the economy improves in Bulgaria. Worst case? Probablly lose well in excess of 50% of the overall investment. All this assumes that buyers can actually be found for the massive oversupply of holiday homes in these areas. It is certain that properties will be for sale for long periods before finding buyers.
One poster takes issue with my claim of a 2 month rental season. The reality is that the peak season is the first three weeks in August, but the main season runs from early June to the end of August. There is currently a spike of rentals and visitors outside of this time, related for a large part to "investors" travelling to the area to hand over their cash to these unscrupulous agencies and developers. The real numbers going there outside the peak season will not be able to sustain even a tiny percentage of the excess rental capacity in the market.
The Bulgarian market, as understood by most people, is a disaster and a magnet for the unwary. Gullible amateurs flock to the place, driven by marketing hype and promises of free money, and there is a certainty that they will lose money in the medium term. There are opportunities for those who want to lose less -- go to the inland villages and buy properties that are being deserted by locals; you will spend less and therefore have a better chance of losing less. However you only have to look at parts of Rural France or Portugal to understand that if something is cheap because nobody wants it, then nobody is likely to want it when you come to sell.
This thread is about overseas property investment, not overseas property buying -- two entirely different things. The distinction however is lost on many Irish buyers who just can't wait to leverage the equity in their homes and make loads of money. They certainly won't make it in Bulgaria. The best that can be hoped for is that they don't lose their homes in Ireland by over-extending themselves in this crazy market.