Bulgaria

W

Wilkes

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If you are thinking about investing in Bulgaria don't. Ignore the selling pitch and don't assume that selling agents or developers are actually in control of your money or events on the ground. Don't assume that procedures are subject to normal accounting standards like auditing or that banking is secure. Don't assume that planning isn't rife with corruption or that at the end of the chain you've entered you are not dealing with the East European mafia. Its only a question of time before this blows out.
 
Hi

I have just paid a deposit with an Irish Company Bulgarian prestige Developments. Have you had dealings with them. Im a bit nervous after reading your post
 
What information do you have ?
I have paid 10% and am due to give a further 20% within
the next week on a property ur making me v nervous
 
kookie said:
Hi

I have just paid a deposit with an Irish Company Bulgarian prestige Developments. Have you had dealings with them. Im a bit nervous after reading your post
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Get it back!

They may not be too anxious to give it back though -- the commission levels in Bulgarian beach and ski property are enormous, and are paid to the agent from the first payment.

If the deposit is small, i.e. 1,000 euro or so, better to lose it and walk away than to dig yourself into a deeper mess.
 
TomKat said:
What information do you have ?
I have paid 10% and am due to give a further 20% within
the next week on a property ur making me v nervous
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You have a problem, best advice is to try to get out, check the paperwork and see if there is an out clause.

If you haven´t signed a contract, then get your money back, use your lawyer if you have to.

The problem, as discussed extensively in other threads here, is that people mix up the words "invest" and "buy" in the context of Bulgaria, particularly in the case of the so-called "guaranteed rentals" scam.
 
Litigation prevents detailed comment but the best outcome is that you'll buy a pig in a poke, finding there is no rental market, no market for second hand properties and that the money was made by the mezanine investors and developers.

Ask yourself why investors are putting down for example 40% deposits on sites with a zero build? Ask yourself are prices artificially upheld by the weight of money and what is the true fundamental value of the market? Then look at counter party risk, who is at the end of the chain and what links do they have to people you'd rather not like to meet.
 
Personally I hate these posts.

Wilkes so you mean to tell all us informed askaboutmoney readers to stay totally away from all bulgarian property as everyone will be ripped off??

A balanced view would be to be cautious, do your research, choose a good location and development, and dont expect too much..

I treat posts like yours as scaremongering!!
 
To be honest, the majority of the OP isn't the worst advice.

Remove the opening and two closing lines and its not bad.
Wilkes said:
If you are thinking about investing in Bulgaria don't.... (bit too generic, way too generic to be honest!)

....Don't assume that planning isn't rife with corruption or that at the end of the chain you've entered you are not dealing with the East European mafia. (could just as easily be dealing with crime syndicates in Ireland as Bulgaria, potentially higher chances in countries where we don't have knowledge of the laws/enforcment/etc. but again, a bit too generic for me to consider good advice)
Its only a question of time before this blows out. (not sure what the OP ment by "blows out" but if it's indicating that ALL investments in Bulgaria will lose money, again, way too generic)
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The rest could be looked at as decent advice, though I would make some changes (in bold).
Ignore all selling pitch(s) and don't assume that selling agents or developers are actually in control of your money, or acting in your best interest (this also goes for tied agents for investments and a general rule whether property or not), or events on the ground.

Don't assume that procedures are subject to normal accounting standards like auditing or that banking is secure. Build up a knowledge of the area/environment/rules/regulations where your looking to invest and get as much information as possible with all bodies being delt with.
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Basically the advice is not to make assumptions and to fully research any potential property investments (including research on the agents/locational politics/any potential problems/etc. etc.). This would go just as much for any investment location as it does for Bulgaria.

The OP may have an emotional/personal reasons to specify Bulgaria, but no doubt posters could give similiar horror stories for any property location, including Ireland.
 
humphreyb said:
Personally I hate these posts.

Wilkes so you mean to tell all us informed askaboutmoney readers to stay totally away from all bulgarian property as everyone will be ripped off??

A balanced view would be to be cautious, do your research, choose a good location and development, and dont expect too much..

I treat posts like yours as scaremongering!!
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If you consider that scaremongering how do you like the current sentiment re Irish property thread? I know which market I would rathar invest in.
 
Posted by Wilkes

'litigation prevents detailed comment'...

You must be joking as you should still be able to expound without giving
names. So, why d'ont you tell us more.
 
For what it's worth, I travelled out to Bulgaria earlier this year, having paid a €500 deposit on a 1-Bed new build in Sunny Beach.
It was one of the most valuable trips I've made, as it saved me handing over another penny of the asking price of €42k. (I had negotiated this down from €47k, far too easily).

Sunny beach is mile after mile of building site. Nothing too scary there for the long-term investor, however there was absolutely no re-sale market to be found. Most estate agents - and these are largely developers turned agents - would not touch a re-sale property, therefore any capital gain currently reported is theoretical.
Also, there was very little activity on most of the building sites, despite the sheer amount of them and thefavourable time of year for building (March). Building activity during the peak season is apparently prohibited, so this was a major surprise.

The infrastructure of the place put me off too. The main road from Sofia to the East coast, which I had to drive due to lack of direct flights at that time of year, is almost impassable in places, and for long stretches. This was representative of most places I saw. Crumbling, is the word I'd use.
Again, for a long-term investor this might be good news, as you could be getting in ahead of any boom. But for the ever-so-slightly more cautious, it seems a different story.
This is of course just my opinion, based on my experience of and research into the place.
 
Indiansign said:
For what it's worth, I travelled out to Bulgaria earlier this year, having paid a €500 deposit on a 1-Bed new build in Sunny Beach.
It was one of the most valuable trips I've made, as it saved me handing over another penny of the asking price of €42k. (I had negotiated this down from €47k, far too easily).
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Anecdotal I know but anyway... a friend of mine was all gung-ho about investing in Bulgaria as well. (Personally I thought he was completely mad - he's leveraging his own PPR to finance it, even though he's planning on moving/trading up next year).
So he went along to the expo a few weeks ago (in the RDS?). He was talking to one guy who managed to put him off Bulgaria entirely - similar sentiments to above: no rental market, no resale market, very poor infrastructure. Could be good (very)long term bet but with any horizon <10yrs seems to be too risky.
BTW he's now all excited about Morocco....
 
bo se said:
If you consider that scaremongering how do you like the current sentiment re Irish property thread? I know which market I would rathar invest in.
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Using the word "invest" in the context of the beach and ski property on offer iin Bulgaria is a complete contradiction in terms.

As many other posters have pointed out, there is no resale market, no rental market and only a very short season which is almost entirely hotel based (if you take away the mini boom in providing accommodation for the lemmings who flock to Bulgaria with open wallets).

If there is no rental market now for this stuff, where are the customers going to come from when all the projects that are being built have been completed? And even if they do suddenly appear, have you done your figures based on eight to ten weeks rental a year, assuming that you get 100% occupancy?

Just because Ireland seems to be peaking and probably represents a high risk right now, it is still a real market based on real principles by and large. The "guaranteed rental" scam in Bulgaria is a clever method of selling overpriced property to gullible idiots at grossly inflated prices with the rental value added on top. The beauty of the scam is that it keeps the hordes of dissatisfied customers at bay for a couple of years until the developers have moved on.

Anyone who "invests" in any of this stuff in Bulgaria will lose heavily in the short to medium term. That is an absolute certainty, and anyone who offers a different analysys is either not in possession of the facts around this market or has a vested interest (or indeed has already been caught and is in denial).

Then only good advice any informed person can give you re Bulgaria is to run away from it. If you have been caught, try to offload it if you can -- there are still plenty of idiots around who will buy it from you.
 
auto320 said:
The "guaranteed rental" scam in Bulgaria is a clever method of selling overpriced property to gullible idiots at grossly inflated prices with the rental value added on top. The beauty of the scam is that it keeps the hordes of dissatisfied customers at bay for a couple of years until the developers have moved on.

Anyone who "invests" in any of this stuff in Bulgaria will lose heavily in the short to medium term. That is an absolute certainty,
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You know, now you've made it look like a lot of other places, Turkey, Morocco, France and Italy when you talk about guaranteed rental scams (which I believe are disgusting and a total rip off).

And as for projections, you've made me think about long term in Bulgaria (I never believed in the short/medium "flipping" lark, as it's glorified pyramid selling from top down).

A lot of overseas investments are very dodgy, it seems that a lot of investors get hot for areas due to their proximity to the EU without actually being to any of them or knowing a wee bit about the country.

The Bulgarian government's devlopments are not going to help investors short or medium term, but the question is, how long is long term?
 
Auto320, you seem to have a negative view on the whole of Bulgaria but only support your views based on conditions in Sunny Beach. Would you like to give an opinion on investments in Sofia - where obviously rents would be year round and not the same levels of oversupply?
 
Bulgaria has suffered a dramatic change of fortunes in recent months, with the annual rate of capital growth plummeting from a remarkable 36% in 2005 to 13.9% in September 2006, and possibly set to fall further. Some areas, such as the Blagoevgrad District including the Bansko ski region, actually experienced price falls in the second quarter although these recovered in the third quarter.

The oversupply of apartments has created fierce competition for rentals, even in the face of quickly-growing tourist demand, which is being aggravated by reported poor management from local agencies. Overall the return on cash invested has dropped from 116% in 2005 to just 35% for the year up to the end of September 2006, as shown in the Assetz Property Investment Tracker.
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[broken link removed]
 
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