First time on this particular forum. I am looking to buy abroad as an investment on a budget of around £40,000. I have narrowed my search down to three places and want to buy in the summer, here are my thoughts behind the choices BulgariaSunny Beach or Bansko (Bulgaria potentially joining Euro which will see price increases although I'm not convinced by rental opportunities, will there be snow in Bansko in ten years time?) Hungary Budapest (Already an established market with rental opportunities?) TurkeyAltinkum (Popular resorts and possibility of joining EU but potential for political instability)
I am after a property that will appreciate in value over the years and also has good rental opportunities. Are these places good investments or should I be looking elsewhere?
Whats the rush? Your probably going in at the wrong time in the cycle. Prices are now falling in the US, Spain and Ireland as well as being stagnant falling in circa 66% of the UK and this is set to spread as interest rates and credit are tightened.
Do not take at face value anything anyone that is involved in the construction or sale of properties in the 3 markets you are considering says to you.
When dealing with third party/middlemen/sales agents or direct with the DeveloperIt’s Caveat Emptor
A few basic rules to remember when investing in property abroad:-
1. At least take the same level of care and caution when buying property in a foreign country as you would in the UK (i.e. employ a subject mater expert lawyer to advise/act on your behalf, as opposed to one recommended by a vested interest (VI), or rely on a commissioned sales person).
2. Take everything people with a VI’s (i.e. developer/sales agents or a lawyer recommended by them) say with a large pinch of salt and test their statements against factual/market reality, do your own due diligence (DD).
3. If the price/deal seems too good to be true it usually is. In fact focus on ‘value’ and the opportunity for it to increase, be added to and realised. Don’t fall into the common trap of comparing a property investment abroad with UK prices, as it is meaningless in assessing ‘value’.
4. Always take into account the cost of buying and selling when doing your DD. In places like Spain and the US these can be high and erode your profit or increase your loss. Also gain a detailed/realistic budget of the running costs of the property and taxes you will incur as an absentee owner. Investment properties abroad always cost more to own/run and generate lower income than budgeted for.
5. Never pay over your deposit unless you have a bona fide Bank Guarantee or it’s held in escrow. To pay the deposit into the developers/sales agents cash flow is to invite disaster, let other mugs do this and move on.
6. Take time to research what drives the market locally (both historically and currently) e.g. Take Florida as an example: Average annual property price rises in Florida historically being 3 to 4 % per annum and with 2004/05 being circa 15% and 27% respectively, and with interest rates being raised every month it was ‘buyer beware time’. Remember fundamentals need to underpin the market and locals/local economics can’t afford the prices wet back Brits seem willing to pay. There won’t always be a 'greater fool' to off load to.
7. Never believe that your property has gone up just because the developer is charging new buyers ‘fresh off the plane’ a higher price than you paid six months or so earlier. Resale’s abroad (especially where there’s overdevelopment and/or, a none existent/weak resale market), do not command ‘new property premiums’ and can take years to sell if incorrectly priced. Bulgaria is a classic example of where Brits have paid £50k for 2 bed apartments and think they’ve made £10k profit because the developer is selling the next phase at £60k, only to find they can’t even find a resale buyer at their original purchases price. Many also made the mistake of taking the developers advice to buy two units, one to keep and one to sell at a profit!!
8. Buying a property abroad is not a ‘passive’ investment; you’re starting a business the main asset of which in hundreds or in Florida’s/Caribbean’s case thousands of miles away.
Suuny Beach? Have not been there for years but it must have improved a heck of a lot if Brits aspire to owning property there and expect to make money out of it .
It used to be a real dump (and I speak as one with an ex from Bulgaria and liked everywhere else including Bansko, though that alone does not provide reason to buy).
I have an apartment in Akbuk (just South of Altinkum). Altinkum has ,in my view, plenty more builds than the market available. However, recently work has started on a new Marina in Altinkum which will be one of the biggest in the Aegean. It will have berths for 300+ yuachts and dry docks for another 300+, it will also have ferrys to 3/4 Greek islands, shopping, restaurants etc..... This should give the property in Altinkum a new lease of life. There are also planned to be at least 3 Golf courses in the area, although these were stopped on environmental issues and I'm not sure of the latest information on this. A new Motorway is under construction from Bodrum airport to Altinkum which should make the journey time about 40 Mins when completed. Turkey is a beautiful country, where I am in Akbuk is stunning, Altinkum is 'different' and not to everyone's tastes. If I were going to invest in this area my first choice would be Akbuk (obviously), next would be as close to the 3rd beach area (the Marina area) of Altinkum as possible.
Hungary
As vbland said Budapest is lovely, it is also the fastest growing central European Capital at the moment. District 8 is up and coming, a new metro line is been built there and the City Council are ploughing a lot of money into it. It's definitely one to watch although not a particularly great area at the moment. It's a bit like King's Cross in London. District 13 is also undergoing a lot of new development, it already has a metro stop/s. A big development is underway there called Daniubo Park??, might be worth a look.
Bulgaria
There have been lots of threads on here discussing the pro's and con's of Bulgaria (mostly Con's it has to be said)so I won't repeat them again. Suffice it to say I wouldn't but my money there.
Personally, I would say either Hungary or Turkey depending on what you want to get out of the investment.
At the end of the day it's up to you, no-one can decide for you. It's a personal choice.
The resorts in Bulgaria might not be as well know as some of the ones listed above to people in western Europe, but are well established holiday resorts to the former eastern block.
I was out there two years ago and was pleasantly surprised at the standard
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