Bulgaria or Spain, which is the better Investment?

A

Andrew.G

Guest
After reading various posts on this website I have read people saying that there was still money to be made in both Bulgaria and Spain. Do you think there are many similiraties between the two markets such over developed resorts, undeveloped rural areas and an over estimation of potential demand.

After researching both markets I believe that an investment would be far more profitable elsewhere in Europe where the markets aren't saturated or suffering from over supply.

Andrew
 
reminds me of the time I wanted to set up an oil exploration company with a colleague. Stockbroker told us that we would be awash with money if we said we were searching in exotic foreign parts, even if there was nothing there. however, if we said we were exploring in South Tipperary, even if we had all the groundwork done and the oil was there, we would get nothing.

of course there is money to be made everywhere, if you know what to buy into. there is money to be made in Irish property if you know where to buy and there is money to be made in both Spain and Bulgaria. however, there is loads of money to be lost in property in all three counrties if you buy either the wrong house or in the wrong place or most of all, without having done your due diligence.
 
Which market do you feel is currently the better investment opportuntity?

Personally i think Bulgaria, although money could be made particularly in Sofia, is just too risky. This is partly due to low wage levels of Bulgarians giving no local re-sale market also and extreme over supply on the coast. Although I don't think Spain is that much better I belive it offers a safer investment which in parts for example emerging cities like Bilbao and Sevilla could experience quite strong growth themselves without the riosk associated with the Bulgarian market.
 
For a start, if you are considering either Bulgaria or Spain, you should not be thinking of serious investment but more of a holiday home for your own use. Having said that, Spain wins on several counts.

1. You will get far more use from a holiday home in Spain; the weather is better and there is practically year round sunshine in many areas, compared to a couple of months in Bulgaria.

2. In Spain, you are generally (although not always) buying at local prices. The majority of holiday home buyers in Spain right now are Spaniards, and if you do your homework you will buy at these rates.

3. The right areas in Spain will always give you a return over time, assuming that you bought good properties in the right locations. I have owned several nice homes in Spain over many years (still do), and always made healthy profits when reselling.

4. Certain areas on the Spanish Costas can give good long-term rental returns to the expat community. I know of buyers who recently paid around 200k for furnished apartments (resales) and are achieving 1,000 euro per month from long term tenants (expats on 2 or 3 year work contracts). Avoid long term lets to locals, they can acquire rights that are hard to shift.

5. Rentals in the majority of new build Bulgarian coastal and ski property are imposible to achieve, or are tiny and give around zero return after costs.

Things to watch in Spain: High community charges in some developments, and wrong price for the location (check adjoining developments). Never buy off-plan in the Costa del Sol -- lots of resales cheaper and often furnished to boot.

On a final note, the oft-mentioned issue of planning problems in Marbella is actually not a cause for concern in most cases, but with a couple of notable exceptions. Use a good local lawyer who knows the ground -- don't even think of using Irish or UK lawyers to do a conveyance in Spain.
 
I would choose neither of these locations personally. Bulgaria prices are over-inflated and investors will be dumping their stock very soon. Spain is better but I believe you can get better yields in Northern Europe with less risk and a greater chance of appreciation.

If you require a holiday home i would still think you would be wise to buy in Northern Europe as an investment and then choose to rent when on vacation.
 
Amarin said:
If you require a holiday home i would still think you would be wise to buy in Northern Europe as an investment and then choose to rent when on vacation.
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Probably wise counsel in many ways, but ignores the fact that you can make money on capital growth in the better holiday home locations. The debate also ties in with the usage you expect to get from a holiday home; if you only use it one or two times a year you are best to rent, but if you are at a stage in life where you have a bit of free time the cost of owning a holiday home can be less than the cost of renting.

It gets back to the whole debate on holiday use versus investment. Many agencies try to tell buyers that you can get unlimited rentals for properties in a myriad of locations, and then get some personal use as well. The facts are different. I still believe, and my experiences over many years have borne this out, that the best place to buy a holiday home in Europe is Spain with its almost year-round sunshine. With the strong local market and good overseas interest that does not ebb and flow with every passing fad, such homes can also provide good capital appreciation if you buy with care and an eye to the future. It works for lots of people, all the time.
 
Maybe you should actually come to Bulgaria Auto - two months sunshine indeed! Lovely here at the moment and has been nearly all winter. Bit breezy today but people sitting out in street cafes in sun. And only mid April.

And MOPRF - there is no CGT in Bulgaria as such, there is corporation tax for companies and then any sale of assets as an individual classed as income for that year. But in any case if resident in UK or Ireland, subject to those tax laws whether you buy home in Spain or Bulgaria.

And not all over hyped and over priced. I just sourced and sold a lovely two bed house in good condition with bathroom and kitchen and large plot and barn for 12,000E. Very pretty area, only few minutes drive from motorway. Nice village with restaurant and shops. Lakes for fishing nearby, walking etc. Only 40 mins from two major cities.

Rachel
 
auto320 said:
that the best place to buy a holiday home in Europe is Spain with its almost year-round sunshine. With the strong local market and good overseas interest that does not ebb and flow with every passing fad, such homes can also provide good capital appreciation if you buy with care and an eye to the future. It works for lots of people, all the time.
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I would put the South of France, with its easy ferry access to Ireland and England, as a much better place to buy a holiday home. Truth is, you will always do well if you buy a great property in a great area but to minimise the risk you should concentrate on the macro factors. Thus, and this is only my analysis as I know you are a great fan of Spain as indeed I am (mi novia es española), I would weight France higher than Spain.
 
auto320 said:
I still believe, and my experiences over many years have borne this out, that the best place to buy a holiday home in Europe is Spain
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Spain has been the number one destination for property investment for many years now and although places such as Bulgaria, Croatia and potentially Romania may reduce it's dominance I believe it is unlikely it will be knocked off its throne any time in the near future.

However from a purely investment point I would rather put my money into Sofia as I believe this will have higher capital growth than most places in Spain and it is still possible to get property there for quite cheap. The city is currently receiving a lot of investment on the commercial side places such as Riga and Warsaw have shown the benefits that this can give.
 
Andrew.G said:

However from a purely investment point I would rather put my money into Sofia as I believe this will have higher capital growth than most places in Spain and it is still possible to get property there for quite cheap.
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Yes, perhaps, but the risk is far higher. In fact, for me, the risk/return makes no sense.
 
Summer season in BG officially opening 20/4/07.
6 weeks earlier than last year.
The weather has been fantastic of late.
Sofia residential prices are up about 7% first quarter 2007.
A rising ship will lift all boats in my opinion and this is especially so when it comes to property. The coast will hold its own in terms of prices.

Still rather have 80k in a BG apartment than have bought an Irish property for 250k last year. If it falls like some are predicting (20% to 50% depending on what you believe) in Ireland I very much doubt that i will see those type of falls in BG and if I do the amount i would lose would be no worse tha here.

Irish property drop - say 20% in next couple of years = 50k down

BG drop - say 50% in next few years = 40k

I rest my case.
 
You omitted the third sceanario.

If one did not buy in Bulgarian or Ireland in the last 24 months the greatest projected loss would be zero.


 
Daddy said:
Looks like the game is up in Spain.

See Amarin's new thread just started.
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I realise there is a debate going on between you and auto re Bulgaria. Spain has hit the wall but auto appears to know the market so is cushioned.

But Bulgaria has sank. Sorry to say, but this is an investment forum afterall.
 
Why has Bulgaria sunk then? Bit of a glib statement!
I know many people making money in property in Bulgaria (not just the unscrupulous large developers) and am working with a number of clients that have invested here.

Rachel
 
What Switch Homes are saying effectively is to ignore all advice, investment value etc, just buy on the word of a salesman who is selling secondary properties at more than double the market rates. When I see an incoherent and floundering pitch like this from Switch Homes it is heartening -- discussions like the ones on this board are getting the word out that Bulgaria is best avoided, and the companies who have been milking the foreigners for the past three years are getting desperate.
 
budapest said:
I'm sure the informed users of this board will find these posts humorous more than anything else.
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Yes that's true. But hopefully the moderators can exercise some control and prevent a proliferation of rubbish like this.
 
thetravelbug said:
Why has Bulgaria sunk then? Bit of a glib statement!
I know many people making money in property in Bulgaria (not just the unscrupulous large developers) and am working with a number of clients that have invested here.

Rachel
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So you have nothing to worry about then.
 
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