With tourists flocking to Bulgaria’s beaches and ski resorts, the prospects for property investors have never looked so good.
It may have thrown off the shackles of communism little more than 15 years ago, but Bulgaria is already being hailed as the ‘new Spain’. Not only do its tourist resorts offer the same investment potential as Spanish property of two decades ago, Bulgaria is also attracting buyers put off by the relatively high prices of its counterparts in Western Europe.
UK investors are flocking to Bulgaria, which occupies sixth place in Amanda Lamb’s list of top holiday destinations.The rise in property prices has been greatest in areas such as Sunny Beach, and ski resorts like the town of Bansko.Although demand is driven by foreign interest, it is encouraging to note a significant local holiday market; that’s important when considering potential rental income.
Tourism
The Bulgarian tourist industry is well-established and short-term holiday lets are in great demand in areas like Burgas, the Black Sea Coast and the mountain resorts.
The Bulgarian Ministry of Culture and Tourism (MCT) reported that over 2.7 million foreign tourists took their holidays in Bulgaria in the first six months of 2005. Half came from EU countries, with British tourists increasing by 42%. In fact, in August 2005, hotels along the Bulgarian Black Sea coast were 100% full. Consequently, large capital growth and good rental returns are predicted – extremely good news for foreign investors in holiday property!
Bulgaria’s renowned skiing resorts are attracting thousands of tourists throughout Europe by offering state-of-the-art facilities and a choice of high-class hotels close to the pistes or in traditional towns. British tourists to ski resorts rose by 60% in January 2005, and tourists from Scandinavia, Russia, Greece and Italy also increased. Giorgia Pasti of the Italian Larus Viaggi tour operator says that Italians, “soon find themselves captivated by the unique cultural and historical heritage and the extraordinary and well-preserved nature, and they simply come back time and time over.”
The rentals market is a crucial aspect for consideration by foreign investors buying real estate in Bulgaria.The potential rental income has fuelled interest in the tourist property market almost as much as the prospect of healthy capital growth.
Many developments in the beach and ski resorts come with the offer of a full rental management package, and this immediately takes away the strain from the investor. However, before taking the plunge, buyers should make sure they do their research and find a reputable company that can market and rent their property profitably.
Rental yields
Ski properties have year round potential for rental yields because many of them, like Bansko for example, offer mountain walking and biking, horse-riding, fishing and soon golf in the summer.
Rental yields are generally better for apartments in complexes than for individual properties because logistically it makes more sense for tour operators to have a large number of apartments and amenities in one place. Buyers can also be assured of year round security and property management. Remember too that rentals are based on numbers of people accommodated rather than on the size of the property. This means that a one-bedroom apartment of modest size with a double sofa-bed in the living room can yield income from four people. Generally, one-bedroom properties are more in demand on the coast but not necessarily in ski resorts where people often holiday in groups.
Location is also of prime importance. So don’t be surprised if properties are much more expensive if they are close to the beach or pistes!
On the whole, the forecast for British investors is good and they can look forward to a good return on their investment in both rentals and capital growth.As for the future of Bulgaria, that’s looking bright too – so why not be a part of it?