Buy & Sell Bulgaria Insight Newsletter

By Christopher Violaris,
Managing Director of Eurolink Investment Group

What looked as an impossible dream ten years ago, the economic recovery, the political stability and the rule of law in Bulgaria, today is an undisputed fact! An achievement that took other countries more than a few decades to reach, very often at a high cost and after the introduction of severe austerity measures.

Today, Bulgaria is well on the way to development and recovery, something that is obvious everywhere you go and everywhere you look. The EU membership has played a decisive role in getting the Bulgarian Authorities to put the criminal bands under control, to make the streets safe, to clean up the public sector from corrupted officials, to get the Banking sector to work properly at last, to get the judiciary to function and make its presence felt and finally push the country ahead!

Bulgaria is a great place to live, bring up a family and do business. It is defiantly a great place to invest your money and your life savings, but you should remember one thing, not everything that shines is gold!

The recent ‘writings’ on the wall can only cause concern and teach future investors to be very careful as to how and where they invest their money! A lot of people, in their attempt to make money out of the “property boom” in Bulgaria, have suffered serious losses and a good number of them have actually lost their money! Why and how you may ask.

I will list below a number of “tips”, which will help you locate and avoid the traps that the so-called developers have set for you:

1 - Be very aware and avoid any contact with developers that offer “guaranteed rental income” or high percentages of property appreciation per annum! The only guarantee you should consider, is a Bank Guarantee coming from a first class European or Bulgarian Bank, written also in English (not translated).

2 - Before entering into any agreement or contract ask for proof that properties in the region where you are interested to buy have a re-sale market and that the properties have actually appreciated substantially over the past 3-4 years. The truth is that in areas like Bansko, Sunny Beach, Kranevo, Kavarna and Baltzick there is no re-sale market at all and those of the investors who bought properties there, they can not re-sell them even if they are ready to accept a substantial loss.

3 - Very often people buy uninhabited properties in remote villages with the intention of doing them up and sell them on at a profit! This is to say the least, very naive! To start with, most of these villages are so remote that in the winter months are cut off from the rest of the country for weeks! The cost of living in such villages most of the time is much higher than in the towns, leave alone the fact that they do not offer even the most basic amenities, like medical services, post, internet, television, even a proper grocery shop.

4 - Avoid entering into any kind of contract or engagement if the agent offers to meet you at your hotel, in a restaurant or a coffee shop! Insist to see his offices and make your own evaluation. Do not sign anything or part with any money unless you have seen proof of ownership or your lawyer has assured you that everything is in order.

5 - It is a common secret that suitable land in selected areas is beyond any doubt the best investment you can make, but the land has to be right! Most agents will assure you that the land you bought will easily be included in the residential zones and this can be done by paying an additional 2-3 euros per square meter! This is a very big lie. Only a very small percentage of land around the towns and the villages can be regulated (less than 10%) and this is only if basic infrastructure (water-electricity-roads) is in place.

6 - Finally you are advised to do business with reputable companies that have been in existence for at least 4-5 years. Remember only in the region of Varna alone, over 300 estate agents have gone bankrupt last year. Don’t let them fool you that “theirs” is the best and only opportunity you have to invest. There are thousands of good “juicy” offers around!