Buying a property in Bulgaria : how to buy an investment property, retirement home or holiday retreat in this emerging market

Bulgaria is attracting increasing interest from property buyers around the world - fascinated by its property investment potential, glorious stretches of golden sands, historic towns and breathtakingly unspoilt scenery. With its low property prices, Bulgaria provides many different types of accommodation to suit all tastes - whether it's a mountain retreat in a ski resort, a seaside apartment, a period country house, or a modern city-based apartment. And it all comes with a low cost of living, too. Bulgaria is set to join the EU in 2007 and property prices are already showing significant increases. Jonathan White's goal in this book is to provide you with exactly the information he himself searched for when he bought his first property in Bulgaria - the pros and cons of buying property in Bulgaria - 10 basic steps to buying a property in Bulgaria - financing your purchase - renovating and furnishing your home - understanding tax and insurance - letting your property to provide an income - buying land - setting up a Bulgarian Company. Plus much more, including useful websites, contacts, practical tips and sample contracts. Contents 6 Acknowledgements 14 About the Author 16 Preface 18 1 Why Bulgaria? 22 The pros and cons of buying property in Bulgaria 23 Key facts about Bulgaria 24 Where is Bulgaria? 25 Climate 25 Bulgarian regions 26 Public holidays 26 Cost of living 26 Tourism 27 Wine 30 European Union 31 Investment potential 31 Bulgaria in the media 32 Magazines on Bulgaria 33 Too good to be true? 34 2 Visiting Bulgaria for the first time 36 Visa requirements 36 Police registration 37 Saving on telephone/mobile costs in Bulgaria 37 Keeping telephone costs down for your friends and family 38 Booking accommodation 39 What money should you carry? 39 Is an adaptor needed for electrical appliances? 40 Getting around 40 Access to the internet 41 Opening a bank account 41 3 Location, location, location 44 Basic checks about the location 44 Checks to make if you are planning to live/retire in Bulgaria 45 Checks to make if you are investing in Bulgaria 46 Checks to make if you are buying off-plan 47 4 How to buy property in Bulgaria 48 The ten basic steps to buying property in Bulgaria 48 Research before you buy 49 Finding your property 51 Getting a survey 62 The two-tier pricing structure in Bulgaria 62 Negotiating the price 63 Setting up a Bulgarian company 64 5 Paying for your property 77 How to finance your purchase 77 Summary of financing options 78 Profiling the payments 79 Playing the currency markets 79 6 Renovating your property 81 Quotes 81 Finding a builder 81 What can you expect to pay? 82 7 Tax considerations 83 Property purchase tax 83 Annual tax 84 Tax to pay on rental properties 84 Personal tax 84 Corporate tax 88 VAT 88 8 Property and contents insurance 90 Basic cover 90 Extended cover 90 Additional cover 91 What kind of information do I need to provide? 91 What can I expect to pay for contents insurance? 92 How can I go about taking out insurance and finding a company? 92 9 Furnishing your property 94 Gas or electric oven? 95 What can I expect to pay? 95 Boilers 96 A washing machine in the bathroom? 97 Air conditioning and heating 97 10 Paying the bills for your property 99 Electricity prices 100 Water prices 101 11 Transferring money to Bulgaria 102 Transferring your money using an internet-based service 103 Managing the ever-changing exchange rate 108 12 Living in or visiting your property 111 Security 111 Installing cable or satellite TV 112 Installing an internet connection 115 Moving to Bulgaria 116 13 Renting out your property 120 Determining the rental market 120 Targeting holidaymakers 121 Property management companies 122 Determining the rental price 125 How to receive payments for short-term rentals 126 How to advertise your property for rental 127 Costs associated with renting out your property 130 Points to consider when renting out your property 130 Rental yields 131 14 Investing in Bulgaria 133 Major investment incentives 134 British Bulgarian Chamber of Commerce 135 15 Buying land in Bulgaria 137 Regulated versus unregulated land 139 Can a foreigner buy land in Bulgaria? 139 How do you go about buying land? 140 Is it easy to buy land? 140 Buying land with an agent 140 What are the approximate costs and fees associated with buying land? 141 What can go wrong? 141 What should you watch out for? 142 Building a house on the land 144 How do I find people to build my property? 148 16 Inside the mind of the Bulgarian 150 17 Bulgaria: the future 152 My prediction of Bulgaria’s future 153 18 Case study: Varna 156 Varna: Background 156 Varna: Property market 160 Varna: Getting there 163 19 Living the dream 164 20 Bulgarian ski resorts 168 Borovets 169 Bansko 169 Pamporovo 171 Appendices 174 Appendix A: Rental prices in 2008 174 Appendix B: Land prices in 2008 176 Appendix C: Average apartment prices in Bulgaria in 2008 180 Appendix D: Most popular places to buy property 183 Appendix E: Real Estate Market Index 184 Appendix F: Property guide from €3000 to €1,000,000 185 Appendix G: Transferring money on XETrade, in ten steps 188 Appendix H: Useful websites 194 Appendix I: Useful contact information 199 Appendix J: Practical tips – before you go to Bulgaria 203 Appendix K: Practical tips – buying a property 204 Appendix L: Practical tips – managing your finances 207 Appendix M: Practical tips – renting out your property 208 Appendix N: Sample preliminary contract 209 Appendix O: Sample receipt for deposit payment 212 Appendix P: Sample final contract 213 Appendix Q: Sample rental management contract 217 Appendix R: Sample power of attorney for rental management company 223 Appendix S: Bulgarian embassies across the world 225 Appendix T: Flights for 2008 243 Glossary 248 Index 252 A 252 B 252 C 252 D 252 E 253 F 253 G 253 H 253 I 253 K 253 L 253 M 253 N 253 P 253 R 254 S 254 T 254 U 254 V 254 W 255 X 255 Disclaimer 256 Contents......Page 6 Acknowledgements......Page 14 About the Author......Page 16 Preface......Page 18 1 Why Bulgaria?......Page 22 The pros and cons of buying property in Bulgaria......Page 23 Key facts about Bulgaria......Page 24 Climate......Page 25 Cost of living......Page 26 Tourism......Page 27 Wine......Page 30 Investment potential......Page 31 Bulgaria in the media......Page 32 Magazines on Bulgaria......Page 33 Too good to be true?......Page 34 Visa requirements......Page 36 Saving on telephone/mobile costs in Bulgaria......Page 37 Keeping telephone costs down for your friends and family......Page 38 What money should you carry?......Page 39 Getting around......Page 40 Opening a bank account......Page 41 Basic checks about the location......Page 44 Checks to make if you are planning to live/retire in Bulgaria......Page 45 Checks to make if you are investing in Bulgaria......Page 46 Checks to make if you are buying off-plan......Page 47 The ten basic steps to buying property in Bulgaria......Page 48 Research before you buy......Page 49 Finding your property......Page 51 The two-tier pricing structure in Bulgaria......Page 62 Negotiating the price......Page 63 Setting up a Bulgarian company......Page 64 How to finance your purchase......Page 77 Summary of financing options......Page 78 Playing the currency markets......Page 79 Finding a builder......Page 81 What can you expect to pay?......Page 82 Property purchase tax......Page 83 Personal tax......Page 84 VAT......Page 88 Extended cover......Page 90 What kind of information do I need to provide?......Page 91 How can I go about taking out insurance and finding a company?......Page 92 9 Furnishing your property......Page 94 What can I expect to pay?......Page 95 Boilers......Page 96 Air conditioning and heating......Page 97 10 Paying the bills for your property......Page 99 Electricity prices......Page 100 Water prices......Page 101 11 Transferring money to Bulgaria......Page 102 Transferring your money using an internet-based service......Page 103 Managing the ever-changing exchange rate......Page 108 Security......Page 111 Installing cable or satellite TV......Page 112 Installing an internet connection......Page 115 Moving to Bulgaria......Page 116 Determining the rental market......Page 120 Targeting holidaymakers......Page 121 Property management companies......Page 122 Determining the rental price......Page 125 How to receive payments for short-term rentals......Page 126 How to advertise your property for rental......Page 127 Points to consider when renting out your property......Page 130 Rental yields......Page 131 14 Investing in Bulgaria......Page 133 Major investment incentives......Page 134 British Bulgarian Chamber of Commerce......Page 135 15 Buying land in Bulgaria......Page 137 Can a foreigner buy land in Bulgaria?......Page 139 Buying land with an agent......Page 140 What can go wrong?......Page 141 What should you watch out for?......Page 142 Building a house on the land......Page 144 How do I find people to build my property?......Page 148 16 Inside the mind of the Bulgarian......Page 150 17 Bulgaria: the future......Page 152 My prediction of Bulgaria’s future......Page 153 Varna: Background......Page 156 Varna: Property market......Page 160 Varna: Getting there......Page 163 19 Living the dream......Page 164 20 Bulgarian ski resorts......Page 168 Bansko......Page 169 Pamporovo......Page 171 Appendix A: Rental prices in 2008......Page 174 Appendix B: Land prices in 2008......Page 176 Appendix C: Average apartment prices in Bulgaria in 2008......Page 180 Appendix D: Most popular places to buy property......Page 183 Appendix E: Real Estate Market Index......Page 184 Appendix F: Property guide from €3000 to €1,000,000......Page 185 Appendix G: Transferring money on XETrade, in ten steps......Page 188 Appendix H: Useful websites......Page 194 Appendix I: Useful contact information......Page 199 Appendix J: Practical tips – before you go to Bulgaria......Page 203 Appendix K: Practical tips – buying a property......Page 204 Appendix L: Practical tips – managing your finances......Page 207 Appendix M: Practical tips – renting out your property......Page 208 Appendix N: Sample preliminary contract......Page 209 Appendix O: Sample receipt for deposit payment......Page 212 Appendix P: Sample final contract......Page 213 Appendix Q: Sample rental management contract......Page 217 Appendix R: Sample power of attorney for rental management company......Page 223 Appendix S: Bulgarian embassies across the world......Page 225 Appendix T: Flights for 2008......Page 243 Glossary......Page 248 D......Page 252 P......Page 253 V......Page 254 X......Page 255 Disclaimer......Page 256 With its low property prices, Bulgaria provides many different types of accommodation to suit all tastes. Bulgaria is set to join the EU in 2007 and property prices are already showing significant increases. The author aims to provide you with the information he himself searched for when he bought his first property in Bulgaria.