A basic parameter when determining the capital return from investment
in a property is profitability. A survey carried out by the British
consultancy agency Assetz shows that Bulgaria is the best place to invest
in real estate. With incomes, which increase up to 12% annually and
capital profit of 36% last year, it is thought that the total return of
investments made was 116% in 2005.
These data put Bulgaria before Cyprus in the list for total capital
return for investments in real estates and is yet another proof that our
country is comparable to Spain in the 80's of the last century. For those
who are looking for capital profit and are yet to enter the real estate
business, there is definitely a big potential, is the opinion of leading
experts.
As long as the level of self-participation in Bulgaria is around 30 per
cent, investment in residential estate, office or holiday property will be
affordable for a wider range of entrepreneurs. The reason for this is that
prices in the country stay low despite of the fast rates of increase.
Analysts predict that the price rise in our country will continue, but not
at the pace we have witnessed in the past three years.
Foreign markets offer ideal opportunities for investors who have
decided to direct their capital to the real estate sector and Bulgaria and
Cyprus are forming as the best destinations, says Steward Law, director of
Assetz. However, the high profitability is related to high risk. This is
the reason why established markets such as the French, for example, are
still preferred by most businesspeople, regardless of the fact that
profitability there is 68% and in the recent years there has been an
excellent market for the summer lettings. France attracts investors with
stable and predictable market.
Among the Balkan states Turkey could challenge Bulgaria in the future
regarding investments in real estate. It is expected that to the end of
this year our southern neighbor will allow foreign entrepreneurs to take
mortgages. This will lead to an increase in the property prices in the
whole country.
It is a fact that Bulgaria has the leading position regarding
investments in real estates and you are far before the other countries,
concludes Law. His advice is to invest mainly in and around the sM
resorts. The cheap Bulgarian ski destinations are for sure as popular as
the quality resorts in the French.
| COUNTRY |
typical price (in
EUR) |
legal costs |
likely interest rates
direction |
Min. deposit
required |
total cash%
required |
| Bulgaria |
115000 |
5% |
Down |
30% |
35% |
| Great Britain |
217000 |
2.50% |
Down |
15% |
17.50% |
| Cyprus |
174000 |
6% |
Down |
15% |
21% |
| Florida, USA |
182000 |
4.50% |
Down |
20% |
24.50% |
| France |
218 000 |
4% |
Up |
15% |
19% |
| Greece |
145000 |
15% |
Up |
20% |
35% |
| Italy |
174000 |
15% |
Up |
20% |
35% |
| North Cyprus |
72400 |
10% |
Up |
100% |
110% |
| Poland |
72400 |
5% |
|
30% |
35% |
| Portugal |
218000 |
6% |
Down |
20% |
26% |
| South Africa |
188000 |
9% |
Up |
20% |
29% |
| Spain |
216000 |
10% |
Up |
20% |
30% |
| Turkey |
87000 |
10% |
Up |
100% |
110% |
| COUNTRY |
gross yield |
typical mortgage
rates |
typical management
cost |
total returns on cash
invested |
forecast |
| Bulgaria |
12% |
7% |
20% |
116% |
stable |
| Great Britain |
5.80% |
4.99% |
15% |
30% |
rise |
| Cyprus |
8% |
3.90% |
25% |
84% |
stable |
| Florida, USA |
8% |
5.50% |
25% |
56% |
lower |
| France |
7% |
3.20% |
25% |
68% |
stable |
| Greece |
7% |
5.50% |
25% |
2% |
rise |
| Italy |
8% |
3.65% |
25% |
30% |
stable |
| North Cyprus |
7% |
|
25% |
32% |
stable |
| Poland |
6% |
5.90% |
25% |
44% |
rise |
| Portugal |
8% |
3.15% |
25% |
40% |
lower |
| South Africa |
5% |
8.50% |
25% |
41% |
lower |
| Spain |
8% |
3.20% |
30% |
53% |
lower |
| Turkey |
10% |
- |
25% |
34% |
stable |
|
