This report explores the rental market in Bulgaria towards the end of 2006 and looks into the current rental returns on new developments in several key locations – focussing on the Black Sea Coast and the prime ski regions of Bansko, Pamporovo and Borovets.

The importance of tourism cannot be underestimated and this report looks at the growth in tourism and the expected impact on the rental market over the next few years, backed up with actual data from the National Statistical Institute (Bulgaria).

Property rental: Black Sea Coast

The Black Sea Coast is where many tourists flock in the summer months. The Black Sea coast starts opening its doors in mid-May, but it is not until the beginning of June that the number of tourists starts picking up. To gain a clearer understanding of the rental market, here is a breakdown of the rental seasons for the Black Sea Coast’s summer season.

Golden Sands is one of the most popular and modern coastal resorts in the north,
with many new hotels, casinos, discos, bars, restaurants and a bustling night life in
the summer season. It is also the home of many successful estate agents who hope
to entice holiday makers with the idea of owning their own place in the sun.

The beach strip is 3.5 km long and up to 100m wide and particularly popular with
Germans, Brits and Scandinavians. The average temperature in summer is between
27 and 30 degrees. Located just 17km from Varna it is also ideally suited for those
looking to relax on the beach or sightseeing groups who can venture around the
Varna district.

From Varna’s international airport you are looking at approximately 30 minutes drive to the Golden Sands resort. If you are lucky enough to make this journey without travelling with the most corrupt taxi drivers in the world then you are likely to enjoy your trip even more!

Golden Sands has a large number of privately run hotels with modern facilities,
located very close to the beach. For this reason, when considering the purchase of
an apartment in this region, one must consider the competition (the hotels!).

Whilst one could argue this point stands wherever you buy a property, it is more important when you are dealing with resorts that literally close down after summer, since you have little opportunity for rental out of season.

As a resort, Golden Sands’ real season is from the start of June until the end of
September, with things winding down by mid-October and closing down completely in the last week of October. The rental season in Golden Sands is really a little over
four months, maximum

The complex is centrally located with five modern designed buildings, situated
approximately 100 metres away from sandy beach. All apartment buildings share one reception and have separate lobby and lift. The complex has a café and an outdoor swimming pool.
From May until October the Iglika developments enjoyed occupancy levels of
between 70-80% on average. Rental returns on this development vary between
5.6% – 6.6%. The company that manage this development work with up to 40 tour
operators and charge clients a 20% management fee.
To compare this with another complex on the Golden Sands resort – Paradise Green
Park – in 2006, the typical yields were between 3 – 3.5%. Paradise Green Park
combines a hotel with apartments, which is quite common in the Golden Sands area. It is located 600m from the beach strip.
One factor to consider when looking to obtain a better rental return is the distance
from the beach. The closer to better, as most tourists are looking to enjoy the sand
and the sea.

Moving south, some two hours away from Golden Sands, Sunny Beach has a large
number of ultra-modern and stylish hotels, apartment complexes, nightclubs, shops,
restaurants, bars and cafes – with some of the best beaches in the country. Sunny
Beach is a larger resort, popular with the 18-30 crowd and others looking for a
buoyant night life. Bulgaria property rental report 2006

Tourists fly in from the international airport in Burgas, where a one way trip by car for 1-3 people costs between €28 – €40 depending on which company you use.
Here are the typical rental prices for apartments in the Sunny Beach resort, based on
2006 prices.
Development Number
bedrooms
Low Season
rental
Mid season
rental
High season
rental
Sun Village 1 €294 per week €378 per week €455 per week
Sun Village 2 €406 per week €525 per week €655 per week
€350 per week €455 per week €525 per week
€238 per week €358 per week €525 per week
Studio €168 per week €308 per week €427 per week
2 €280 per week €434 per week €581 per week
2 €280 per week €434 per week €581 per week
2 €280 per week €434 per week €581 per week
Looking at front line apartments on Sunny Beach, prices for 1 bedroom apartments
vary between €40 per night (low season) to €80 per night (high season), with typical
yields of 5.4%.
A one bedroom apartment in the Grenada apartment complex is expected to bring an
annual rental income of €2400, and a yield of 4%.
Byala, also sometimes referred to as Biala, is situated 54km south of Varna on the
road to Sunny Beach – and is considered to be one of the up and coming areas for
new developments on the Black Sea Coast. Byala means white in Bulgarian, and
reflects the limestone rocks in the surrounding area It has a 6km beach, between
10-50m wide, and enjoys fine white sands and a number of neighbouring beaches.
Nearby is the village of Obzor, 5km to the south, which has a more developed
infrastructure than Byala and a large outdoor market in the summer time.
The nearest airport is the international airport in Varna – being about a 1 hour drive
to Byala. However, Burgas is also only 80km away, making flights from Burgas
another option.
Byala is only a small village at present and cannot be compared to either Sunny
Beach or Golden Sands in this respect. Its infrastructure is still developing and is
best suited to those seeking a peaceful, simple holiday. Due to a very limited
number of facilities and very little night life, purchasing an apartment in this area
needs to be considered with due care. Apartment prices are much lower than in
Golden Sands or Sunny Beach, with entry level prices as low as €25,000. There is
therefore good potential for capital appreciation in the future as the area grows in
popularity.

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Glenn Armstrong Property Mentor is a phrase that people hear a lot when asking the question “Who is the best property mentor around?”.

Why not check out the following page and get your self a free guide on how to buy property, just click on the banner below

Many people know that real estate investing is very lucrative.  For that reason alone, will make people want to get their share of the pie.  They know that this is a great way to build wealth, not only for them, but they can also pass it down to their future generations.

In addition to having monthly rental income, there are other factors that contribute as to why people invest in real estate.  Some of them include:

•    With appreciation of rental properties, there will be increased value.  In turn, this could help with the selling and reinvesting in properties that already have a higher value.  Appreciation of rental properties can also make way for an equity line of credit for future use.

•    Speaking of equity, you as an investor can invest in sweat equity, which involves making improvements to your real estate property.    It doesn’t have to be so far out where you end up spending a lot of money.

This can help the value of your property go up faster than it would have if you had not made improvements.  So, if you spend $3,000 on cosmetics and miscellaneous items, then the value of the property could be double or more of the amount you spent on improvements.

•    Being a real estate investor during inflation times is not necessarily a bad thing.  Even though rental payments increase during this time, your mortgage loan payments should remain the same.  Because of this, you can have an increase in cash flow.

Another thing about inflation is that you can also gain more renters (if you have vacancies) because some people may not be able to secure mortgages during that time.  Since you will have a greater demand for renters, the rent will also increase.  This is part of the agenda of supply and demand.

•    Using “Other People’s Money”, or “OPM”, is a good reason for people to invest in real estate.  You can find a bank that will secure a loan for you for your real estate investment(s).  The better your credit is, the better chance you have of securing a good fixed rate loan with low interest rates.

You can also look at zero-down loans, but that can be more risky.  You would have to pay more in your mortgage payments because you didn’t include a down payment.  So when the property appreciates, it will benefit you along with the monthly cash flow.

•    Real estate investing is considered a business.  You can use the expenses from it and deduct them from your taxes.  Anything that your purchased, had repaired, any fees and anything else related to the investment in question.

Read a personal view of Glenn by clicking here: Glenn Armstrong BMV

Technorati Tags: glenn armstrong, property expert, property guru, property mentor

The problem with buying property is that most people only do it on average every 7 years so how do you become expert at something you do only every 7 years or so?

The statistic above is on average how many times we move house or more specifically our home. Therein lies another issue because we are buying our home the purchase is very often made with the heart and not the head.

This does not matter when the commodity your buying is your home because over the course of 7 years much can be put right by the passage of time between purchase and sale.

If you paid too much because you fell in the love with the house or apartment then it does not matter so much as long as you can pay the mortgage every month. Time cures lots of mistakes.

With property investing it is different.

You do not have the same degree of flexibility that you have with your personal home purchase. If you get the sums wrong on your investment, and this is more linked to how much you can either flip a property for, which means sell it on quickly, or how much rent you can charge for it, then you can be up the creek without a paddle very quickly.

I will cover the whole gambit of market research through to purchase and identifying your tenants in great details later on in this series of blog posts.

Going back to my question “So how do you become expert at something you do only every 7 years or so?” well the answer to this is to follow someone that has been successful in what you are trying to do and then mirror what they do. Now there is something very important to pick up here and that is to follow what they do and not necessarily what they say. These are two very different things.

Which Property Mentors or Property Experts Should You Follow?

Property mentors or property experts have sprung up in their droves over the last several years. I know and have met some of them and I have also been a member of a lot of their programmes and spent a lot of my own money in following what they do. I wanted to find out which one of them I trusted, respected and found to be professions in what they taught.

This will be an ongoing review and I will seek to speak with and meet all of them so that I can give a full and frank review.

My own commercial background is in property marketing and sales both here and abroad but I still felt I wanted to see how other people did property investing in the UK.

Please see the right hand side bar for some more interesting news about the property investment world.