Bulgaria Sofia Buying and Renting an Apartment

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mdp

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hello, i am interested in buying an apartment in sofia,i am just wondering has anybody done the same.and what advice could you give..thanks​
 
Re: bulgaria sofia,buying and renting

I haven't done the same but am quite familiar with investment in Bulgaria. First of all don't believe the agents when they tell you that you will get high rental. In Bulgaria rents are very low and only a small percentage of people are lucky enough to get ex-pats to rent from them and get higher rents. If you're buying in Sofia I would make sure to buy as close to the centre as possible (e.g. Lozenetz or an up and coming area such as manastriski livadi). There's a lot of developments that look really cheap that say they are 10 minutes from the city centre. you're much better off as close to centre as possible.

Out beside the Sofia business park wouldn't be a bad option as more and more foreign companies are basing themselves there.

There are lots of people who have apartments sitting idle in sofia so if I was renting a 2 bed city centre apartment I know I could easily get one for 400 euro a month.

The success of Sofia will depend on the number of foreign businesses that come in and set up there. It's never going to be huge tourist hit (unless they put in huge development into Mount Vitosha which could be a bigger ski resort) because it's not a patch on somewhere like prague but there's still good potential.

Other thing to watch out for it to ensure they are going to put the full value on the deed. Generally they try to put a low value and in a couple of years time a lot of people will get burned.

good luck...
 
Re: bulgaria sofia,buying and renting

mdp said:
hello, i am interested in buying an apartment in sofia,i am just wondering has anybody done the same.and what advice could you give..thanks​
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If you like to explain how you came to make this decision, others may be able to help you tease out the pro's & con's.
 
Re: bulgaria sofia,buying and renting

I bought a 1 bed apartment in Sofia 18 months ago and it is due to be completed very shortly. If this post is still going I will let you know how I get on renting it out.
 
Re: bulgaria sofia,buying and renting

thank you doberden for your reply,i am thinking of buying in lozenetz,it seems to me to be the best place to do so at the minute,but i will wait and try find out more about the rental side of it first,please keep me posted on anything you hear regarding the same.mdp
 
Re: bulgaria sofia,buying and renting

Helen said:
I bought a 1 bed apartment in Sofia 18 months ago and it is due to be completed very shortly. If this post is still going I will let you know how I get on renting it out.
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thank you helen,good luck with your investment
 
Re: bulgaria sofia,buying and renting

RainyDay said:
If you like to explain how you came to make this decision, others may be able to help you tease out the pro's & con's.
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well,i have been travelling over and back to bg.for the last few years and i can see the investment oppurtunity here to be huge,i have spoke to bg.friends and they see the same,but nobody ever can have enough advice when investing,hence the post
 
Re: bulgaria sofia,buying and renting

doberden said:
Other thing to watch out for it to ensure they are going to put the full value on the deed. Generally they try to put a low value and in a couple of years time a lot of people will get burned.
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Do you mean in terms of tax or that they won't actually own the property outright or what? Surely a solicitor should protect against this sort of thing?
 
In Bulgaria it is common practice to put the tax evaluation of the property on the title deed. This value is set by the local municipality and is generally less than 20% of the value of the property. It's just a tax avoidance measure. This has worked fine in the past for the local market as all transactions put the lower value so you never got stung for capital gains tax. However, the rules in Bulgaria are changing. Tax evaluation prices will increase by at least 100% this year and will continue to increase until they match up with the actual value of the property.

Example:

I buy a house for 100,000 in 2004 and put 20,000 on the deed. I only pay 3% taxes on the 20,000 - good news so far.

I try to sell the house in 2008 for 200,000. Bulgaria laws have changed so the real value is put on the property deed. I end up paying CGT on 180,000 (200,000 less 20,000 price that is on the deed) instead of 100,000.

Solicitors sometimes will tell you about this practice but sometimes they won't as it was quite common practice in the past.
 
OK - thanks for the explanation. Sounds more like an evasion than an avoidance strategy.
 
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