Investements-opportunities-in-Bulgaria-Shams-Property

1. Why investing in Bulgaria? a. Tourism Potential b. Political Stability c. Economic Factors 2. Investing in Off-Plan Properties 3. Investing in Land 4. Information for Developers 5. Making the Right Investment? Let’s talk money! 1. Why investing in Bulgaria?      a. Tourism Potential In recent years Bulgaria was labeled by international investors as the new hot-spot. Whether you are a small, private investor or commercial developer, there are few countries that can offer you the capital returns that Bulgaria does. It is therefore not surprising that the country was labeled by Channel 4 as one of the? 20 best places to buy in the world?! Of course Bulgaria is a beautiful country with an excellent capacity of attracting tourist throughout the year? The long sandy beaches, a number of first-class ski resorts and countryside with splendid scenery can leave few to wander how come they have never visited the country before. Well, it would be misleading to assume that no one knew about Bulgaria? in fact traditionally the country has attracted millions of tourists throughout the year, mainly from Russia, the Czech Republic, Poland, Germany, Holland and other eastern and northern European countries. However in the past 2 years the tourism industry has seen an unusual boom, to be precise more than 4 million tourists have visited the country for the purpose of ?recreation and leisure? ? this is an increase of 13.5% form the previous year, an impressive figure taking into account that most countries have seen a decrease in the number of tourist visitors. Apart from the nationals of the countries which have traditional links with Bulgaria, visitors from other locations have emerged, among others British tourists, the number of which has increased by more than 60% in 2004. This tourism potential of the country attracts investors, who will be guaranteed excellent rental yields, the present level of which are on average between 6% to 10%, for their properties. Factors to be considered: - The diverse geography and climate have provided an excellent environment for the development of both ski and beach holiday resorts; - The Black Sea international airports in Varna and Burgas are about 3 hours flight from Britain; - There are circa 220km of sandy beaches on the coast; - Many major international holiday companies have placed Bulgaria on their books ? the demand from holidays is steadily increasing.       b. Political and Social Stability In the last 15 years, Bulgaria has experienced a rather troubled transition from communism to democracy, however the progress which the country has made in the past 5 years is undisputable: - the country is set to join the European union in 2007; - Bulgaria became a NATO member in April 2004; - The Bulgarian national currency, leva (or BGN) is currently very stable and linked to the EURO; - Very low crime levels (in fact lower than the average in the EU or Britain); - One of the countries in Europe with the lowest costs of living; - Bulgaria is prized on international level for its progress, legal, political and economic reform. And this is what a serious investor would consider? A safe environment and profitable way to invest his money!       c. Economic Factors Did you know that: - in 1997 Bulgaria entered into agreement with the IMF, which resulted in the creation of the Currency Board and a substantial decrease in the inflation levels, which are at present set at 5.9%; - as the market was liberalized, the foreign trade between Bulgaria, the EU and EFTA and CEFTA countries was substantially enhanced; - the GDP growth between 1999 and 2001 has increased from 2.5% to 5.8%; - in 2000, an astonishing 85% of the industry underwent privatization; - the economic growth in 2004 was 4.8%. 2. Investing in Off-Plan Properties there is currently a large demand for off-plan properties in Bulgaria. Many investors who have missed the opportunity to invest on time in Spain, are now learning from others and put there money in various off-plan developments on the Black Sea coast and the ski resorts. If you buy an apartment in an off-plan development during the early stages of the building process, you will benefit from a substantial discount given to you by the developer and from excellent capital growth. Furthermore you are not required to tie-in your investment capital at once, as the payment schemes for such investments is fairly flexible and you pay the developer at stages. Of course, it is important to ensure that the developer is sound and experienced, and we are more than happy to show you the developer’s previous projects and to arrange for you to inspect completed projects in person, where possible. 3. Investing in Land the vast majority of investors have focused on the market of newly completed or off-plan properties. In result the demand for such properties pushed up their prices in relation to other investment options, such as building plots. At present we can therefore observe the following trend: the price per square meter of completed building or off-plan property in a prime area (along the Black Sea coast, near the major ski resorts or in large cities) averages 900 EUR per square meter. At the same time the average price of regulated land (with planning permission) in the same areas averages 60 EUR per square meter. Building costs are on average 250-300 EUR. The other costs for developing communication links or/and utility supply (such as water and electricity) reach up to 50 EUR per square meter. The total cost for building a property on a regulated land amounts to circa 400 EUR per square meter. And these are relatively conservative estimate? With good management and clever planning these costs could be further reduced. It could be interesting for you to know that the profit margins the property developers of new and off-plan properties enjoy vary between 40% and 250%. The latter might sounds like a story tale, but the example below could illustrate how it could be achieved in practice: The developer buys a plot of regulated land for 50 EUR/sq.m and finances the initial stages of the building himself (1/3 of the costs per sq.m are about 100 EUR + building communication links etc. which would reach circa 50 EUR/sq.m). After completing the first stages of the development, he sells the building off-plan with a price tag of circa 900 EUR/sq.m. With the funds so raised he finances the remaining building work. As a result, the developer net profits are realistically expected to reach 500 EUR/per sq.m for an investment of about 200 EUR/sq.m. This scheme is well known and widely used by the property developers? It represents a huge opportunity for investment! Our main strategy is to find investment options with highest potential for future capital gains increase. In this way your returns will be affected by both the capital appreciation of the land over time and from its development. We will also assist you with your application to transfer and register agricultural land as a regulated one. The process takes about 9 months, yet it could save up to 40% from your investment. As the old cliche says 'time is money' and therefore all planning stages could be completed even before the planning permission is obtained by the local authorities. We are involved in many similar projects at the moment. The average return on capital for our clients is estimated at 58% per year, yet in some cases the projections show a return on investment of 140% per year. We achieved these results by choosing the plots of land with potential higher than the average, clever and careful planning and professional building development. Good connections with the local and central authorities help us to obtain the necessary licenses and permissions within reasonable time. What we proved is that reality is sometimes stranger than the fiction? 4. Information for Developers To those who want to renovate a property or build a new one, we offer specialist services. An experienced developer and architect will have a meeting with you, during which you can discuss your expectations and plans. The architect will draft plans for the project, which you can amend until you are satisfied with the final version. A planning permission would have to be obtained, and this will also be arranged by our firm. You will be guaranteed to work with only the best in the field, who have the necessary experience to make your project a success! We can provide you with a complete solution: finding a suitable land in hot-spot areas of the country, assisting you in the purchase process and getting the required planning permissions and licenses. Using our experienced team of architects, planners and builders we can undertake even the most difficult and complex projects. Even if our forces may prove to be insufficient, we can rely on a broad network of close property development companies with varied specialization. Our aim is to maximize your profits? Your success is a measure of our success! You will be involved in all stages of your development, from selecting the right plot of land, to choosing the building materials (the quality of which can vary enormously) and inspecting the development when necessary. Our aim is to establish an effective communication with our clients, so that resources are invested in the most efficient manner and time and money are used to our clients? Advantage. Should you wish to rent or sell your property, then of course we are here to assist you and provide our services to you. 5. Making the Right Investment? Let’s talk money! The Bulgarian property market is the current investment hotspot and offers countless opportunities to any open-minded investor. According to the recent report released by the European Bank for Development and Reconstruction, property prices in Bulgaria have increased by 145% in the last two years, with an annual property price increase for 2004 being 25%, and much higher in some areas. This trend is expected to continue until 2007 when Bulgaria is due to join the EU. Most investors so far have been attracted by the extraordinary capital returns. The very low base from which the market started its development and the continuously increasing demand from investors from Britain, Ireland, Germany, the Netherlands, Scandinavia and Russia caused some disparities to appear on the market? These provide some exciting new prospects to those clever and open-minded investors who can spot the opportunity. We are looking for the most efficient solution for your personal circumstances! For smaller investors, with capital of circa ? 10,000, we have a number of properties and plots of land which can be bought for medium to long term investment and be sold after Bulgaria enters the EU in 2007, when the property prices are expected to stabilize. As prices are forecast to double in the next couple of years, smaller investors can certainly enjoy good returns on this type of investments. Many smaller investors, or home buyers, also want to buy a property for renovation? Whether they plan to sell it later on or keep it for their personal use and to obtain some rental income during the season. Such investors can benefit from our excellent local knowledge and buy a property in an up-and-coming area and use our network of builders, who can renovate their properties at very reasonable prices. We can advise such investors on what buyers want, so that their properties are sold easily after the renovation completion. Returns on such investments can vary and be as much as 60%, or vine more, considering the fact the sellers would also benefit from the constant increase in the property prices during the period of the development. For off-plan investors who buy an apartment in one of the most famous sea resorts such as the Balchik, Golden Sands, Sunny Beach, Albena, , St Vlas, St Constantine and Elena, or ski resorts, such as Borovetz or Bansko, the expected returns are as follows: annual capital growth of between 15-20% and rental yields varying from 7-10%. Hopefully the above information would help you to look at the Bulgarian investment opportunities in a different light and understand the particularities of the Bulgarian property market in a broader way. If you have any questions regarding the issues raised above please do not hesitate to contact us.