Thinking of purchasing property in Bulgaria

Hi Kemo Sabe,

When you add up the interest paid over the 4 years - it was a loss but the way markets are globally at the moment I'm well glad to have got price I did. It looks like Bulgaria could be heading southwards like Ireland due to the over reliance on the construction industry.

Angela59
 
I just want to add my 2 pence worth to this dicussion.

I bought some properties in Bulgaria a few years ago, it really was an eye opener, when I was buying them the agents were saying "amazing value, joining the EU soon,g et in QUICK".

I took all this with a pinch of salt but there seemed some value there and invested, with the hope of renting for a while and sell on later. I found it very hard to rent, lucky to get 2% return.

Anyway, decided to sell after a couple of years, little if no interest using the same agents, after a few months I asked them why was this,they went on to tell me they werent very good buidings and had no lifts so they probably would not sell and I would have to reduce my asking price by 50%!

A couple of years earlier these same people were telling me what good investments i made..i kid u not!

Anyway I then went to a small agency and they finally sold the properties after about of a year of trying. I broke even in the end.

My advice to anyone thinking of buying in Bulgaria...simply DONT!

Pat
 
Hi,

Our apartment block was one of the few with a lift and was actually very well built and location was a stonesthrow from the beach and lovely sea and pool views. Even with all that thrown in we just broke even. However the agent that sold us the apartment was a solicitor and told us we would get E400 per week rental - and it would appreciate 20% per year. At the time I was reluctant buy husband went on to view the site where apartments were being built and location looked good etc. My advcie to anyone don't buy from an agent buy direct from developer or buy a resale of you are intent on purchasing - don't be reliant on rental income and above all location, location, location - some apartments won't sell because of poor infrastructure.

Angela59
 
postman pat said:
they went on to tell me they werent very good buidings and had no lifts so they probably would not sell and i would have to reduce my asking price by 50%!!!!!!!..A couple of years earlier these same people were telling me what good investments i made..i kid u not
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I have heard that in many countries the estate agents during the frenzy of the property boom had 3 prices for properties: 1) a price for locals; 2) a higher price for foreign investors; and, 3) an even higher price for Irish investors because so many of the Irish "investors" were so keen to buy almost any property.
 
ajapale said:
Hi WhatsNew and welcome to AAM!

What are your objectives in buying property in Bulgaria?

Are you doing this as an investment in which you expect capital gain and rental income?

Or perhaps you are thinking of purchasing a holiday home which you will visit for a number of weeks per year?

Or maybe you intend to live and work in Bulgaria?

If we had more information it might be possible to answer your questions more fully.

aj
moderator
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WhatsNew,

Can you please post with your reasons for wanting to purchase in Bulgaria?

aj
 
Hi Angela,

Would you be able to e-mail the details of the Estate Agent you used? I have a property, its rented, but I want to see if I might be able to sell it.

Many Thanks, Jade
 
Hi Angela,

I was also hoping you could share details of agent who sold your property in Bulgaria . Would you mind sending details
 
Possibly one of the worst places you could put your money. Bulgaria has been flogged to death over the past 10 years and the only one who will make money is the agent FLOGGING them.
The rental yield is terrible with little or no chance of rent. I know many who have bough there after been well pitched by a rep or agent.
For some reason people think that 10,000 s of people are buying so it must be good. Following the herd is the worst thing anybody can do.
Anybody thinking of investing in property in Bulgaria shouldn't be investing as if this is the best they can think of, than you certainly shouldn't be investing as you will lose your money.
People put more research into buying a LCD tv than buying property abroad.
Agents will alway play on your greed to get you on a plane to view property.

Better options: When the world starts to get back on tract (12 - 24 months maybe !!), get into a property fund of funds that invest in infrastructures and in sectors in countries that are flying.
Get advise from many fund companies and research your options. After DD then invest if you are sure. But try not get duped into buying the first fund that you see from a pitch.
People need to realize the difference between fact and pitch !
 
micktpg said:
Possibly one of the worst places you could put your money. Bulgaria has been flogged to death over the past 10 years and the only one who will make money is the agent FLOGGING them.
The rental yield is terrible with little or no chance of rent. I know many who have bough there after been well pitched by a rep or agent.
For some reason people think that 10,000 s of people are buying so it must be good. Following the herd is the worst thing anybody can do.
Anybody thinking of investing in property in Bulgaria shouldn't be investing as if this is the best they can think of, than you certainly shouldn't be investing as you will lose your money.
People put more research into buying a LCD tv than buying property abroad.
Agents will alway play on your greed to get you on a plane to view property.

Better options: When the world starts to get back on tract (12 - 24 months maybe !!), get into a property fund of funds that invest in infrastructures and in sectors in countries that are flying.
Get advise from many fund companies and research your options. After DD then invest if you are sure. But try not get duped into buying the first fund that you see from a pitch.
People need to realize the difference between fact and pitch !
Click to expand...


your post didnt put a foot wrong untill you mentioned property funds , funds be it for property or commodities exist for one reason , to make money for the fund manager and financial institution that sells the fund , i know someone who invested big with irish life in commodities in the middle of 2007 untill the middle of 2008 , that period was probably the best in decades for commodities yet the person in question didnt gain a red cent , the reason being , the fund manager invested the money in dud companys , be it dud food companys or dud energy companys , never let others decide what to do with your own money
 
irish_bob said:
your post didnt put a foot wrong untill you mentioned property funds , funds be it for property or commodities exist for one reason , to make money for the fund manager and financial institution that sells the fund , i know someone who invested big with irish life in commodities in the middle of 2007 untill the middle of 2008 , that period was probably the best in decades for commodities yet the person in question didnt gain a red cent , the reason being , the fund manager invested the money in dud companys , be it dud food companys or dud energy companys , never let others decide what to do with your own money
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Whilst I agree that some investment funds mainly seem to exist to generate the maximum revenue for the manager with the least possible effort, I can't agree that all property funds are like that. There are plenty that are actually listed on the stock market, issue ordinary shares, have published accounts, and where the management is answerable to share holders. They have also generated good and consistent cash dividend yields of approx 5-7% after costs over the last few years. Which is more than can be said of Bulgaria. They have of course also been affected by the credit crunch just like everyone else. So if you are going to invest in them you need to do your homework to make sure that they generated their dividend from sustainable rental return and not from the capital gains on their portfolio. Because those capital gains will almost certainly turn into capital right downs in the short to medium term.
 
irish_bob said:
your post didnt put a foot wrong untill you mentioned property funds , funds be it for property or commodities exist for one reason , to make money for the fund manager and financial institution that sells the fund , i know someone who invested big with irish life in commodities in the middle of 2007 untill the middle of 2008 , that period was probably the best in decades for commodities yet the person in question didnt gain a red cent , the reason being , the fund manager invested the money in dud companys , be it dud food companys or dud energy companys , never let others decide what to do with your own money
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Irish Bob just because your mate invested in a dud fund doesn't mean that all funds are crooks or incompetant. There are many decent funds out there run by decent people who deserve to be well rewarded when their funds perform.


Never let others decide what to do with your own money -

What about -

Dud estate agents?
Dud developers?
Dud tenants?
Dud lawyers?
Dud management companies?
Dud mortgage banks?
etc...
 
I cant believe that anybody in their right mind is still thinking of "investing" in bulgaria.

I have some wonderful magic beans for sale..guranteed results..if anybody wants to buy them PM me.
 
Wexfordman,

Have you any association with the magic bean industry we should know about?

aj
 
ajapale said:
Wexfordman,

Have you any association with the magic bean industry we should know about?

aj
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Well i've been selling them to irish people succesfully for many years.I estimate in 2-3 years maximum most if not all investors will see a magic beanstalk that will take them(with a certain amount of climbing) to a land of unimaginable riches.
10% deposit initially and the balance once the first seedlings appear.
 
Would certainly choose your beans over Bulgarian investment property Wexfordguy but what about property investment funds? beans or pifs?

How are property investment funds going to provide a positive return moving forward? Managers are bleeding the funds dry; Commercial prices are down at least 20% or so across Europe in 12 months; Commercial rentals also heading south fast; these funds are geared up the ying-yang and financing cost not getting any cheaper despite recent ECB rate cuts.
In most cases current investors are getting murdered and cannot liquidate their interests. How will these funds attract new investors to keep the ponzi structure going? IMHO many will simply implode.

My advice stay well clear of pifs.
 
Wexfordguy said:
Well i've been selling them to irish people succesfully for many years.I estimate in 2-3 years maximum most if not all investors will see a magic beanstalk that will take them(with a certain amount of climbing) to a land of unimaginable riches.
10% deposit initially and the balance once the first seedlings appear.
Click to expand...

Hi Wexfordguy,

Thank you for declaring your VI in the magic beans industry. I will view your future posts on magic beans accordingly.

Having said that, I am extremely interested in the unimaginable riches that are on offer from these magic beans. I am rather lazy, ill informed and greedy, and this Bulgarian property investment - I mean magic beans lark sounds right up my street.

I'm looking forward to hearing more about all the easy money I can make out of the Bulgarian property - I mean magic beans market.
 
Mrs.B said:
Would certainly choose your beans over Bulgarian investment property Wexfordguy but what about property investment funds? beans or pifs?

How are property investment funds going to provide a positive return moving forward? Managers are bleeding the funds dry; Commercial prices are down at least 20% or so across Europe in 12 months; Commercial rentals also heading south fast; these funds are geared up the ying-yang and financing cost not getting any cheaper despite recent ECB rate cuts.
In most cases current investors are getting murdered and cannot liquidate their interests. How will these funds attract new investors to keep the ponzi structure going? IMHO many will simply implode.

My advice stay well clear of pifs.
Click to expand...
I'm not sure I agree with the above blanket statements and conclusion. You raise the right issues, but I think you have to look much more specifically at each individual fund, their track record, the underlying property portfolio, and their financing.

I have looked at two or three of the property funds locally and they look pretty solid to me at the current share-price levels. I am actually buying more shares at these levels.

One fund specialises in shopping centres located in dominant/prime locations in mainland Europe. Net rental income was up last year 4.9%. Occupancy rate was 96.6% Direct result up 4.5%. They are leveraged less than 40% at 5.1% interest rates (of which 65% is fixed rate with an average maturity of around 8 years) so finance costs look to be under control and they are not "geared up the ying-yang." Looks like 10-15% of rental contracts are renewed every year (my rough guess based on published figures which suggest an average of 5 year+ contract life) so temporary short-term fluctuations in rents should have little effect on the result. Nett rental yields from new projects are 7%. They have a policy to pay most of the direct result out as the cash dividend, but not more than 100%. There's plenty of cash generation and the dividend is covered, so they're not getting "bled dry." OK the indirect results are going to get hammered in 2009 as values slump, but that is already known and anyway were never reflected in a serious upward spike in their share price in 2006-2008 when values were rising. It's been a similar steady-growth story even if you go back 10 years in their annual reports.

Another fund is more local to one country and has a slightly wider portfolio with more commercial premises, office space and some domestic homes. Its share price was under pressure and down approx 50% last year. But they recently released a press statement that the roll over of their finance for 2009 is now 100% complete (275M€) and the share price recovered 14% last week.

Both funds are highly liquid and publically traded on the stock market with decent daily volumes, so there's no question of getting jammed in a rush for the exits. Equally the share price has traded down gradually over 2008, but investors are not in any way "getting murdered" either if you compare it to the rest of the market.

These are no big name "Trump Tower" or "Bodrum Hotel and Villas" style single-project investments that rely on hype in the domestic market to attract a price premium.

To me, these look exactly like the sort of transparent, long-term, conservative, property investments that I should and do invest in (as part of a balanced portfolio).

Or do you have other information that means I should be heading for the exit?
 
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