Bulgaria holiday rentals, guides and travel

5 Steps To Buy A Property Abroad With Confidence

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Over the last few weeks I posted a number of short articles about my experience of buying a property abroad. Let me know if you’ve found them useful and I hope you have picked up some good tips. In a moment I’ll go through a couple of tips that I haven’t covered yet but in the mean time here’s a recap of the whole series:

  1. I chose the right type of property in the right place, here’s how to choose a property overseas.
  2. I researched the market by considering all potential properties, here’s how to research properties abroad.
  3. I made sure my viewing trip went smoothly by planning to view property in another country.
  4. I made the most out of viewing 12 properties and asked the right questions, here’s my advice about viewing a property abroad.
  5. I made my offer with the knowledge that I was making a reliable investment when I closed the deal on a property abroad.

OK, as promised here are a few things to look out for.

If you go on holiday to a beach destination like the Black Sea Coast or the south of Spain you will see big glossy adverts about investment properties in the airport when you land, when you transfer to your accommodation, when you are idling around during your stay and when you go back to the airport. It’s in your face all the time. The thing is, if you are going to invest in property abroad the ones you see on those billboards are most probably not the ones you should be choosing.

Investment implies that you want to make money out of it and as I have previously explained there are better ways of making money form a property abroad that getting a beach retreat. But why would you buy a property in a summer destination like St Vlas or a winter destination like Bansko? After all there are so many being built that they must be selling. The answer is, when you are not buying the property purely as an investment. It’s when you, your friends and your family will use the property for holidays. Imagine you use it for ten years and are able to rent it out when you are not there, then when you sell it you make a profit because it has increased in value during the time you owned it. It’ll most likely work out like having had free holidays for the whole time you owned it.

Here are two tips to get a great holiday home that is going to pay for itself.

You may be offered a guaranteed rental income deal, this usually is for aparthotels which is like a self contained studio flat within a hotel. The hotel most likely already has agreements with travel agents for the next few years so they know that they will rent out your apartment that’s how they are able to guarantee rental income. The advantage of this kind of deal is that it’s guaranteed money without you having to lift a finger. The downside is that need to let them know when you wish to use the apartment in advance and you most probably won’t be able to rent it out yourself even if you can make more by doing so. On balance be careful with this kind of deal, I’ve come across some that seemed genuinely advantageous and others that felt like they were part of the sales pitch and I suspect there were get out clauses so that they didn’t have to pay you rental income after all (I don’t know for sure but I remember one in particular that just didn’t feel right).

If that’s not for you, make sure you get a property that has a unique selling feature compared to the ones around it. For example if you are buying in an apartment complex, get the one that has the fantastic view of the beach or a private garden or a roof terrace… you get the picture. That way you know that it will be the number one choice for anyone who wants to stay in your apartment complex. That’s what I did and mixed with a number of other strategies I’ve got it to the point where I booked my place out for the whole summer before mid March. The income covers council tax, maintenance fees and there’s money left over to spend when I am on holiday. I’ll tell you how I do it in future blog posts, so stay tuned.

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Close The Deal On A Property Abroad

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Image by Simon Howden

When you close the deal on the purchase of a property abroad it’s the biggest, most exciting and satisfying part of all. In particular I knew I was doing the right thing because I was following a sensible approach which gave me full confidence that I was buying the ideal holiday home for my family. Now I’ll tell you some important steps I followed or wish I’d followed when I bought my overseas property.

What’s the biggest concern when buying a property? It’s the uncertainty factor.

It is twice as big when the property is abroad because on top of all the usual worries you don’t know the law of the land, you can’t speak the language well (or at all) and you won’t be there in person if you are needed or even to collect the keys. Oh, and have you read about those property nightmares in foreign countries? For example where the property developer ‘forgot’ to get permission to build from the local government office, so someone bought a house that was bulldozed a couple of years later. Believe me, you really don’t want to be involved with absent minded property developers.

A lot of what I have told you so far is about addressing that uncertainty. I told you to do your research, plan your viewings and remember I said to collect as much information about the property developer as possible when you view a property abroad. It’s so that you have the means to give them a proper shake down before you commit to anything.

I got lawyers involved. Make sure you use a reputable firm, based in the country you plan to invest in. I told them that I was planning to buy a property, gave them the address and told them who the developer was. I asked them to check out it’s legitimacy and they did an excellent job.

this kind of information was well worth paying for

Before I put down a holding deposit for the property I knew that planning permission had been correctly requested and granted. I also knew that the developer had been around for a good few years, they had completed a number of builds all over Bulgaria including some high profile ones and they had a clean legal history. For me this kind of information was well worth paying for and it was the final trigger that gave me the green light.

So I contacted the developer directly since I wasn’t using an estate agent and told them that I wanted to put in an offer to buy. I asked them to let me know what the terms were. I already had them for the estate agents that I was in contact with because I collected them when I was planning to view properties in another country and thinking it over now I should have got hold of the developers’ ones as well. Certainly before I got solicitors involved. Anyhow, it took a few emails to beat out the fine details because they were willing to accommodate for my specific financial arrangements. For example I was able to choose how much I was going to pay in cash and how much with a mortgage. I was also able to choose when and how much the instalments for the cash part of the transaction were. I made sure the last instalment was paid just a few days before I was going to use my new apartment for the first time. And as expected from a reputable firm, eventually they sent me terms and the sale contract in Bulgarian with an English translation.

One final review of the documents by my solicitor was duly followed by a money transfer abroad using a carefully chosen foreign exchange service (a good one will save you a lot of money). About six months after I made the first payment I was walking through the door of my newly built holiday home.

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Advice About Viewing A Property Abroad

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Image by tungphoto

I spent a little over 42 hours in Bulgaria at the end of one summer, in that time I met with 3 agents, 2 property developers and viewed 12 different properties. Within three months one of those properties was mine, I’ll tell you what to do when you view a property abroad.

Before I get down to specifics, let me tell you a bit about negotiating. It’s important.

Negotiating is about finding common ground, agreeing on something from two different points of view. Good negotiation is mutually beneficial, bad negotiation leads to no deal, wasted time and probably even wasted money. Be in no doubt, the moment you start interacting with a real estate agent you are starting to negotiate. It doesn’t look like it and it doesn’t feel like it but you are. That is why I said that being knowledgeable and showing you mean business when planning to view property in another country is important, it is because it puts you in the correct frame of mind for negotiating effectively.

Now back to the property viewings. Before you fly out get into the negotiation mindset, print off your research spreadsheet, recharge your mobile phone and make sure you have roaming enabled. When you meet agents or developers let them know two things:

  1. how much time you have planned to be with them
  2. that you have or already had other appointments without going into details

It’s just a bit of psychology in order to start your viewings as early as possible and so that they are aware that they have competition to beat. Since you don’t give details they’ll have to assume that it’s serious competition.

I won’t go into all the usual things you should check when viewing a property as it’s either common sense or subjective. However if you are viewing a new or off plan build it is important to find out the as much as possible about the developer. Do your best to determine how long they have been in business, how many builds they have done previously and how successful those builds were.

property developers like the rest of us learn from their mistakes

Why? Because property developers like the rest of us learn from their mistakes. The more established they are, the more likely they do a good job with all the parts of a building that you can’t check yourself (plumbing, electrics and so on). I played it safe and made it clear that I wasn’t interested in first time builds or anything off plan. Of course you may be happy with a riskier approach but I still advise that you have a compelling reason to consider first time and off plan builds.

Another tip to keep in mind is that while you are with an agent be non committal and avoid being pressurised, remember they want that commission but you want to keep your cards close to your chest until you have done all your viewings. After each appointment in your schedule make notes about the properties you saw in your research spreadsheet. Write down both the good and the bad. Gathering this information while it’s fresh is much better than relying on your memory and will help you make the right call when the time comes.

After a day of viewings you will be tired because you will be multitasking constantly: you will be focused on systematically inspecting while you walk around the property, keeping your emotions at a bay to avoid rash decisions, and being friendly and relaxed with whoever is showing you around. But it doesn’t finish there.

Once your appointments are done, sit down to a well deserved meal and rationalise your day. Work out if you would consider putting in an offer for any properties you visited and if you would, once you’re done eating get back out there to familiarise yourself with the local area. All you want to do is identify any show stoppers, these are subjective. For instance a stadium just around the corner may be desirable for one person but not for another. When I did it with my wife it only took about 20 minutes and it also gave us a chance to check out the property from outside once more on our own.

To recap, property viewings abroad are constrained by time, so you need to get a lot done quickly. Learn the facts, get organised, collect the info and fly back home with the knowledge that you have everything you need to make an informed buy decision for an overseas property.

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