Is Real Estate in Bulgaria Still an Investment Opportunity?

Рет қаралды 1,276

Күн бұрын

Пікірлер: 26

@leonidhristov3149 4 ай бұрын

Hey Giorgio, appreciate the kind words for Bulgaria and our property market! One key aspect about the property price growth here is the huge amount of cash generated by the gray market and corruption schemes - people receiving money under the table that can only be invested in real estate (our construction companies can be very flexible on how they get paid). Other reasons are the low interest rates here and the very southern-european way of thinking that real estate is the only good investment. Also yields are getting squeezed due to the high purchase prices and the overconstruction that is now leading to over-supply of rental units, I'm pretty sure 3% is the highest yield you can expect. Still, a lot of good reasons to buy property here, but just pointing out some issues!

@saveandinvestwithgiorgiolo8375 4 ай бұрын

Thank you for your feedback Leonid. Firstly Bulgaria is a beautiful underrated country. Whilst there is some corruption having spoken to many people in Bulgaria it does seem as though the vast majority of transactions are from persons in employment. The way of thinking about propery is similar to many European countries e.g. Italy where most people I speak do not even contemplate investing in the stock market. In Varna/Sofia typical yields in my experience are higher than 3% especially Varna especially in desirable areas.Thanks again for your feedback.

@mekved 4 ай бұрын

I don't think you are right here Giorgio. I am almost sure that @leonidhristov3149 is right here. Firstly when you talk about the return you ALWAYS have to specify if you are talking about Brutto or net return. I only care about net return. I am real eastate investor in different EU countries myself and in my opinion, there is no possible to get in Europe more than 3,5% net return if you are doing everything by the book. I am talking only about the net income from the rents (without counting appriciation). You have to deduct taxes on profit, real estate taxes, some accountancy fees and there is no way that you get more than 3,5% net. And from this you also have to deduct some costs for maintenance (things get broken). And i haven't counted here that in 15 years you will probably have to do a bit bigger renovation (maybe roof, windows, installations, bathrooms etc). So realistically you get on average a good 6% net from rent+appriciation, which is ok. It's still less than what on average stock market gives you (which is 8%). And in stock market all you have to do is 1 click. When renting out real estate you will always have some work, active stress and also potential risk and problems (especially with tenants). I am educated building engineer and that's why i did my investments in real estate (confort zone). But for average people that's absolutely rediculous. A lot of work+stress for the worse return. I think only pepole with no knowledge in economy are investing in a real estate. And if you are buying it as investment, then the only way you should be buying it is with mortgage where you pay the deposit and the tennants are covering you big part of the rent (in some cases the whole rent). In 30 years you will be fine. But buying real estate as an investment with cash is just rediculous. Maybe i understand only if the people have already done other investmens and they buy also real estate to spread the risk. Or...if the net retur is at least 11% per year, which means that you founs some super extra deal...or you bought real estate in some country that will get very quickly developed (Africa etc..), but more reward, more risk

@saveandinvestwithgiorgiolo8375 4 ай бұрын

Just to clarify I was talking gross simply because your tax status depends where you have tax residency. Of course there are extra costs in particular using a managing agent which will take the stress out of the day to day running of the property but will obviously lower your net yield and more often than not 3.5% net yield is not achievable in most European cities. Property has intrinsic value which shares do not have and if you do enough research you can make some very good gains as has happened in Bulgaria. Property is generally less risky than shares. Ideally you should have a mixture of both.

@NS-kc8hb 4 ай бұрын

informative as always Thanks Giorgio

@saveandinvestwithgiorgiolo8375 4 ай бұрын

Many thanks NS

@Kim-J312 4 ай бұрын

Bulgaria 🇧🇬 looks like a beautiful place ❤. Its moved up to my top 3 places to visit and vacation ❤

@saveandinvestwithgiorgiolo8375 4 ай бұрын

Indeed Kim Bulgaria is a beautiful country. Very underrated in my opinion.

@Kim-J312 4 ай бұрын

@@saveandinvestwithgiorgiolo8375 I want to go hiking in the Rila Lake area ❤️

@saveandinvestwithgiorgiolo8375 4 ай бұрын

Go for it. Bulgaria is very affordable but it will not last forever.

@oded999191 4 күн бұрын

How is the rent market in Varna ? If I have 2-3 apartments can I rent it fast or they will stay empty long time … I heard that 90% of the Bulgarian people have apartment under their name so no one rents… they have house Is that correct?

@jamesbrown9721 3 ай бұрын

Hi Giorgio, very informative content. You mentioned the ski resorts, and I'm interested in Bansko not for investing, but for a second home. However, I probably won't have the funds together for another two years. Although real estate prices still seem reasonable in Bansko, my fear is that prices will shoot up in the next 2 or 3 years, and I'll be stuck trying to catch a falling knife. Do you think property prices in ski resorts like Bansko will still stay reasonable in the near future? Also, do you have any predictions on Sunny Beach? Thank you

@Some_Lad 3 ай бұрын

Why are property prices going up? Isn't it supposed to go down since Bulgaria lost a quarter of its population since the eighties leaving all of these empty houses behind? How does this work?

@saveandinvestwithgiorgiolo8375 3 ай бұрын

There are a number of factors in play. Population is going down in the countryside. In the major cities it is stable. Also Bulgaria is getting richer, has low debt and low taxation.

@conorspyridon7008 3 ай бұрын

I'm 28 and want to flip properties. Work my way to the stars so to speak hah. Is it possible to start with 10k? Are materials expensive ? Are workers reliable ?

@saveandinvestwithgiorgiolo8375 3 ай бұрын

Unfortunately getting a mortgage in Bulgaria if you are from a non EU country can be very difficult and so 10K is unlikely to get you very far.

@conorspyridon7008 3 ай бұрын

@@saveandinvestwithgiorgiolo8375 I'm from Ireland so I am from the EU. Are mortgages very strict as in endless requirements you have to meet to be able to obtain one. I've heard people have bought houses out there for 7&10€ but in need of renovation. Have you heard of people in property renovation making money in bulgaria flipping properties ?

@seandavie3672 4 ай бұрын

Can you achieve residency if you buy realestate?

@saveandinvestwithgiorgiolo8375 4 ай бұрын

Yes but you have to purchase a property worth at least 300,000 Euros.

@martinenej3109 3 ай бұрын

Wow, its crazy to see how quick the prices have risen. They are now even more expensive than in Romania! Does this mean that now Romania is the best place to invest? Given that average property prices in Romania are still around 1600€/sqm, and the yields are higher due to higher average salaries in Romania. Would love to get your opinion on this. Great video!

@saveandinvestwithgiorgiolo8375 3 ай бұрын

Thank you for your feeback Martin. Indeed prices have exploded in Bulgaria and I am also starting to think Romania could now be a better investment.

@WFH910 3 ай бұрын

Take it from a native and local of Bucharest - the average prices of 1600 euro/m2 for Romania that are shown on websites like Numbeo and the likes have nothing to do with the local reality. The real average price in Bucharest is more likely around 2000+ euro/m2 for old and undesirable apartaments in average and uninspiring (for locals at least) areas of the city. If you're looking at better rated areas and old apartments, you're talking more like 3000 euro/m2 and the same if you're talking about new apartments in average areas (btw, average areas in Bucharest suck more than average areas do in cities like Madrid or Berlin for example). And finally, if you want the best of both worlds - new apartaments in desireable areas of the city (north especially) , you can start your calculations with something around 4000-4500 euro/ m2 (no joke). Another thing to keep in mind is that unlike in other countries in Western Europe for example, locals are very particular about their preferences when the buy or rent and apartament in Bucharest (or Romania in general). ONLY NEW APARTMENTS (after 2010 or ideally after 2020) are considered desireable by locals, also with parking included. Also, only a few particular areas and pockets of the city also - particularily some of the north (close to the offices of the multinational companies) and if not, absolutely necessary to not be more than 5 minutes walk away from a subway station. Not fulfiling the new and area requirements will cause you to find a tenenant much slower and for a considerably lower rent, also the tenant will move out quite fast whenever an opportunity if found somewhere else where these conditions are met.

@martinenej3109 3 ай бұрын

@@WFH910 Not entirely true, in the Northwest area of the city, neighbourhoods like Militarii for example you can buy for well under 1400€ per sqm. making the yields very good, closer to 9%. 2-3k€ per sqm only applies to sectors 1 and 2, but that is the expensive area of the city, and you never make any money investing in the nice part of town anyway. The money is always in the up and coming neighbourhoods, where growth is yet to happen. Also neighbourhoods like Militarii are good and safe, not as pretty as Sector 1 but they are not as ugly as the south of the city, so you are not investing in a bad area at all.

@ViktorKitov 2 ай бұрын

How are the interest rates in Romania?

@martinenej3109 2 ай бұрын

@@ViktorKitov Currently bad, 6.75% Romania has its own currency, the Leu, which has higher inflation than the Euro, therefore the interest rates are kept usually higher, if they lowered them too much for too long they would have the same problem Turkey had with inflation spiralling out of control. However, this also keeps the prices down. In Bulgaria for example, what has happened is that their monetary policies follow those of the EUR, since their currency is pegged to the Euro. So interest rates are lower there, and it has made prices skyrocket pretty quickly. In Romania this is not the case, but it opens other opportunities as well, given that the yields are better than anything else in Europe right now.