Email  
Password  
Lost
password?
Enter your email address to instantly download our FREE 5 PART GUIDE on Property Investing   
Email:
Home > Blogs > Sofia Casa > Bulgaria Property
First signs of green shoots? (Bulgarian property market update)
The rental market in Sofia for residential property is showing signs of recovery which is always the precursor to any recovery in sales market value.  Rental values have taken a massive hit over the past 5-6 years with yields, in many cases, dropping to nearly half their pre-2008 peak.

Fully furnished flats in prime locations are now showing upto a 20%-25% increase in rental value from their lowest ebb.  Yields in peripheral locations are also up by around 10%-15% from their nadir, albeit at a less than centrally located equivalents, due to supply and demand.

The composition of the purchaser demographic has altered dramatically over the last 5 years.  In Sofia there has been a notable absence of overseas buyers (barring the odd Russian investor).  There has however always been a dynamic re-sale market for property at motivated prices.

Interest rates remain high and banks are still keeping a tight reign on private lending.  This starves the market of liquidity as there has been no QE in BG!   The result is a stagnation in sales prices.  That said now is the time to buy for cash-buyers as prices have stabilised.  For the savvy investor there is the opportunity acquire assets that will deliver solid rental yields which are a prerequisite for any sensible long term investment in real estate.

In both commercial and residential sectors there are however signs that developers have restructured their loans and assumed their losses.  As we see some mothballed sites now returning to activity and moving towards completion.  There are also nascent signs of new investment with Turkish Developers emerging as players on the local market here in Sofia.  Overall one has the prevailing sense that Bulgaria is waiting for the green shoots of recovery in the West to propagate seeds of future growth in the wider SEE region.  The good news is that there are firm signs of recovery emerging in the USA and UK especially.

Typically however local property professionals all too often seem to be looking back and trying to understand what went wrong, trying to pick up the pieces and dispose of existing stock, rather than look forward and innovate.  The elephant in the room for future growth and value generation in the sector will be inevitably be sustainability and green building. EU regulations and EPC's will impact the liquidity and disposal value of assets. Not only, but especially when it comes to the ability to attract multinationals to HQ in Bulgaria as their CSR mission statement demands that they take energy efficiency seriously.

With a few notable exceptions, the political instability, street protests against the Oreshavski cabinet and ongoing stagnation due to institutional corruption and lack of transparency has not encouraged the stability and confidence big business needs to make large-scale inward investment in Bulgaria.

That said it is not all doom and gloom as Bulgaria has the right ecology to hothouse IT Start-ups.  There is a huge potential for Bulgaria as places such as the now famous ''Silicone roundabout'' (Shoreditch, London, UK) become victims of their own success they price themselves out of the market.  As a result Bulgaria has emerged as an increasingly attractive alternative investment location for this sector.  Bulgaria has the programming talent in depth at relatively competitive salaries, affordable office space & super-fast internet.  This has put Bulgaria on the radar for enterprising IT firms who are typically looking to rent small offices in the centre between 80-200 m2 at rents from 300 Euros - 2,200 Euros (pcm).

After the economic crisis buyers from the British isles were replaced by Russian investors seeking a second home.  As a result the Bulgarian property market is exposed to political fall out from the Ukrainian crisis & Putin's return to Cold War rhetoric.  The current situation does not bode well long term for the leisure property segment.  However paradoxically, short term, with a deflating ruble and a sanction hit economy, this may result in increased capital flight from Russia  It is uncertain how the crisis will impact Russians' rights to own property in the EU (of which Bulgaria is a member since 2007) and what measure to tighten controls will be enforced by the EU.  Putin's energy politics also loom heavy on the horizon and could impact negatively on Bulgaria with its dependence on Russian gas.

EU funds and subsidies for cohesion are still frustratingly slow to trickle down to the wider Bulgarian economy.  The powers that be in Bulgaria all want their cut.  As a result funding gets held up in a tug of war between the EU technocrats, their political masters in Brussels and the local oligarchs. Rather than as intended to deliver tangible long term benefits to the man in the street.

In conclusion despite the risks and issues outlined above, the economy will pick up, though steadily and without a return to the heady days of the property boom.  Western & 'BRIC' firms will gradually increase FDI in Bulgaria due to the macro economic stability, EU membership and the fantastic 10% corporate tax rate!  In addition there is a highly motivated and qualified workforce who would rather stay in their home country than emigrate in search of better economic conditions, not to mention great cuisine, natural beauty and the strategic geographical location that make Bulgaria a superb base for regional investors.

Sofia Casa

POSTED BY JAMES FLINT ON THU 10TH APRIL AT 14:33 GMT
TAGS: Sofia Property, Sofia Casa, real estate, CEE Europe, Bulgaria Property
British entrepreneurs invest in Bulgaria

By Tom Esslemont BBC News (James Flint Owner/Manager of Sofia Casa interviewed)

James Flint, a property developer, came here in 2004.

By the time Bulgaria joined the EU in 2007 he had already established himself in the real estate market in the capital, Sofia.

Now he rents out smart apartments to elite clients.

''There's no aggression or bad feelings towards the British at all"

"There is a great willingness among the population to build up their country," he says.

So is it a good time to come here and do business?

"I shouldn't be saying this, but frankly, yes!"

With all the reports in the British media recently about Bulgarians wanting to seek work and benefits in the UK, how did people respond to him?

"I was treated really well, actually. I don't think the Bulgarians are that interested (in the media reports) to be honest," says Mr Flint.

"I think those who are savvy, literate and speak English have picked up on stories in the media. I think basically there was a sense of mild irritation - but (people are) fairly dismissive."

For more interviews with British Ex-pats in Bulgaria Continue reading the main story ''British entrepreneurs invest in Bulgaria By Tom Esslemont BBC News''.

See link to one of our latest listings in downtown Sofia, a one bed with 50% more living space than the average unit!

For a better experience of the Sofia property market, contact Sofia Casa:

POSTED BY JAMES FLINT ON TUE 21ST MAY AT 10:23 GMT
TAGS: Sofia Property, real estate, Overseas, CEE Property, Bulgaria Property
Absentee landlords beware doing the Ostrich won't make it better!

If like many with the onset of the economic crisis the last things on your mind was your Bulgarian investment, let alone engaging a professional property manager at a time of falling rents and negative equity!

However 'caveat emptor' a number of potentially serious and costly issues will have accrued to your asset in the intervening period. You might want to read this short article rather than continue to do the 'Ostrich'!

If you have left your asset without management or maintenance there are issues that you will need to face sooner rather than later! Not least if you want to remove encumbrances that hinder disposal of your asset.  So if your Bulgarian property is poorly managed or unmanaged, you will be familiar with some of the following issues:

CEZ (electricity supplier):

Supply cut-off, unpaid bills + interest and possible court case pending.  There will be a reconnection charge.

Sofiskya Voda:

Water provider same as above.  With additional nuance that each building is supplied with an amount of water if the mains leak before reaching the block this cost is still passed onto the end-user by the utility.  So all users who have not had metered use pick up any unaccounted for balance for water supplied to the property as a whole.  This is in my view v.unfair but it is the system.  So you would need to install new meters and tags then have a long process to establish that the property has been unoccupied and a back dated average may be applied to offset accumulated charges. So serious investigation and checks required.

Toplofikatziya (Central Heating):

sent from a central pumping sub-station, highly inefficient ex-communist infrastructure.  Central heating Monopoly will have made a court claim by now for any unpaid bills.  If there are heaters in the common areas you will owe a share. Also any unpaid un-metered amounts for heating in use in the block could be ascribed to you in the absence of regular meter readings. If you don't have radiators and only hot pipes passing through your property to the upper floors then you still have to pay for the privilege!!!

Council & Property taxes:

There is a statute of limitations for those who have not paid and paradoxically it can be advisable to wait for this period to expire before registering with the local Borough Council and Municipal Architects offices.  However in principle it is possible that you have significant sums outstanding and again the risk of court hearings and even an embargo and repossession of your property by the authorities who are trying to clamp down on this to collect funds during austerity.

Service Charges for common areas:

Can be as little as 4 BGN per month in old blocks but still with the amount of years you have left the property unattended there could be an accrual and sorting this out will engender goodwill from neighbours and block president/treasurer.  It is also a legal requirement to be represented at/to attend AGM of residents committee.  There are also potentially maintenance charges for any works carried out to common areas, facade or roof and other issues pertaining to the use of the common block such as telephone antenna, or facade/roof advertising rights etc....

Rights of Ownership:

A new statute entered into force requiring owners to register their company and assets owned by it with the online digital register (like Companies House in UK) if you bought with a company and have not done this there are serious ramifications that you will likley need to look into with your property manager and/or legal counsel.

Other items:

Of course general maintenance and survey of current status of the property to bring you up to date.  For example the external envelope and tanking on new-builds is often less than adequate especialy with flat roof technology in a climate that can cary 60 degrees between Winter nad Summer.  Also many old downtown properties require facade maintenance and often show  moisture penetration and damp. Not to mention the property needs heating and airing and occupation to avoid it falling into disrepair.

All reasons to engage a professional property manager rather than avoiding the issue by making false economies that cost you more down the line in legal fees and maybe even worse!

For a better experience of the Sofia property market, contact Sofia Casa

POSTED BY JAMES FLINT ON TUE 26TH MARCH AT 16:24 GMT
TAGS: Sofia Property, real estate, Property Management, Property Investment, Overseas, Bulgaria Property
Student Impact on Sofia Rental Market

Its not quite 'The Young One's' but a recent article does highlight an interesting seasonal feature of the property market in Sofia market. There may be no student grants loans, stipends, scholarships or bursaries in Bulgaria but there is the bank of Mum and Dad! Turks & Greeks in particular drawn to down town apartments in the 250-350 Euro price range whilst well heeled Bulgarians drift towards Ovcha Kupel and the NBU (New Bulgarian University). In addition to the return of students to Sofia the Indian Summer gave the property market extra legs into October & November! As for the student masses, look to Studenski Grad and the article below for some interesting insights!

Apartment rents in Bulgaria's Sofia have seen a 15% hike at the end of the summer as a result of the demand driven up by college students, according to realtors.

The southern and southeastern Sofia quarters of Studentski Grad (which houses Sofia's university dorms anyway), Dianabad, and Musagenitsa are the most popular with college students.

The students usually prefer two-room apartments rented for about EUR 200 per month, realtors say.

At the same time, however, the new, second line of the Sofia Metro has also increased the demand for apartments in less popular quarters such as Nadezhda and Lyulin.

Real estate agencies say that September usually sees a stark increase in the demand for rental apartments in Sofia, which leads some landlords to decide to up the asking rent prices.

The realtors have contrasted the prices of rental apartments with the rents in the 'Studentski Grad' (Student City) dormitories which average about EUR 25 but come with the inconvenience of having one or two roommates in a single room.

However, the largest Universities in Sofia have limited housing opportunities which is why not every student can secure a spot in a university dormitory.

Article research courtesy of: www.novinite.com

For a better experience of the Sofia property market, contact Sofia Casa

POSTED BY JAMES FLINT ON WED 16TH JANUARY AT 14:35 GMT
TAGS: Sofia Property, real estate, Overseas, Bulgaria Property
Sofia Rental Market Analysis

Since 2008 in general rental values have fallen by between 35%-50% for an overview of current market prices see below.

Residential

1 bed segment buoyed up by overseas students (Turk/Greek). Central location rents and modern apartments in Southern suburbs such as Iztok/Lozenets/Ivan Vazov rent for between 200-300 Euros pcm.

2 bed apartments rent from 275-515 Euros. This segment has been hit worst by the crisis with 2 bed prices almost conflating with good 1 x bed properties. This is due to boom in over construction and withdrawal of overseas middle management by multinationals and reduction in their housing allowances.

3/3+ bed properties remain sought after and are scarce hence rents in this segment held up during downturn relatively better than the 1 and 2 bed segment. Rents for 3/3+ bed properties range from around 600 E -1,800 E pcm. Subject to size, location, finish and luxury of FF&E/on-site amenities.

Gated communities with on site sports and leisure facilities are popular with less rental voids than commoditized off-plan properties built during boom years as buy-to-lets.

All properties referred to above should come fully furnished barring some of the 180m2 plus properties in the large 2 bed and 3/(3+) bed segments where some senior executives still have relocation packages that include containerized shipments of furnishing, as negotiated condition of foreign posting.

Houses as opposed to apartments, are generally found in Southern suburbs on foothills of Mt.Vitosha: Boiana, Simenonovo, Draglaevtsi (Bistrisa), Kniajevo. Also Pancharevo also offers a good alternative for HNW individiuals near reservoir, airport, Borovets and Anglo-American school. Prices start from around 850 E and go upto Max 3,500 E pcm.

Office Space

For new  Grade (Bulgarian) A office space, look on Blvd.Bulgaria and on Blvd.Tszari Gradsko Shose. Rents vary from 6-12 Euros / m2 and have 0.5-2 Euros/month in maintenance fees. In the centre there is a shortage of new office space and a lot of apartments are converted for office use with prices ranging between 250-1200 Euros pcm for 60m2-250m2.

For a better experience of the Sofia property market, contact Sofia Casa

POSTED BY JAMES FLINT ON FRI 4TH JANUARY AT 10:26 GMT
TAGS: Sofia Property, real estate, Overseas, Bulgaria Property
A Room with a View...

Concrete ScrapersA room with a view! Sadly all to often in Sofia, this saying lifted from the celebrated Edwardian novel by EM Forster, is far removed from the sweeping hills of Tuscany!

When it comes to overbuilding the term ''room with a view'' best describes a view into the living room of an apartment just a few feet across from yours! The joke in Sofia real estate world is that some parts of town have been so overdeveloped that you can reach across to take a slice of toast from your neighbour's breakfast table!

Preservation of good views seems to be given very low priority when a quick buck is to be made from an off-plan build and flip! Just as infrastructure, (as mentioned elsewhere in this blog), lags behind the pace of construction development. It seems that urban planners on local councils give out building permits like hot-cakes with scant consideration for blighted views, the impact on real estate value, oversupply and density. Whenever I think of this I am reminded of the scandalous annexing of swathes of South Park (public property!), by private investors next to/behind the American Embassy. Murky deals led to dubious build permits being granted to allow Developers to throw up row on row of up-scale condos, many standing vacant due to oversupply & fantasy rental prices set by delusional owners!  Sometimes you can see resolute pensioners holding onto their old villa in a Southern suburb, whilst huge blocks go up all around it blocking out the view for all but the privileged few on the upper floors!

Wheres my Mountain

I was going out for a jog the other day, looking at the cityscape as the Winter sunshine set behind the mountain ''...hey wait a minute where's my mountain gone!''  ...now you see it now you don't replaced by the eyesore of an unfinished Hotel on Vitosha Blvd., direction Ivan Vazov District/S.Park.  Before this shell and core concrete monstrosity was erected you were struck with wonder at the sight of Vitosha Mountain, dominating the horizon like a some brooding (hopefully dormant!) volcano. Its green slopes and seasonal changes, lifted you out of the shabby socialist architecture and crumbling downtown edifices, when gazing South at its majesty.  It reminds us 'Sofianites' of our transient fragility with brief lives set against its omnipresent permanence.

At street level this view has now been replaced with a hulking concrete shell on a go slow build, where tourists and executives will (someday!) be accommodated like battery hens on numerous floors! Who knows? We wait and see maybe they will cover the facade with mirror glass to allow us to see the mountain once more reflected in the curtain wall?

Don't get me wrong I'm all for development and FDI, God knows this beautiful, if rather downtrodden land in the South East corner of Europe badly needs it, but a little more consideration to the built environment and the aesthetic impact on the view might not go amiss!

For a better experience of the Sofia property market, contact Sofia Casa

POSTED BY JAMES FLINT ON TUE 4TH DECEMBER AT 09:47 GMT
TAGS: Sofia Property, real estate, Overseas, Bulgaria Property
Snagging an Off-Plan Development in Sofia (Part 1: Hard & Soft Landscaping)

It would be so much shorter to tell you all the good things about Bulgarian off-plan developments for residential use.

As follows is a brief summary:

''.................errr!'' (silent pause for dramatic effect, mid-west dust bowl effect!)

Hard Landscape Subsiding

Hard landscaping subsiding!

...OK! Now let's look at starting a checklist of snag items you will need to bear in mind before you sign-off on final handover and acceptance of your off-plan property in Bulgaria!

Most such developments were conceived in the halcyon days at the tail end of the boom.  They tend to be engineered to meet the budgets of foreign investors remortgaging their property back-home to invest abroad. This led to a glut of 1 & 2 bed properties flooding the market, with properties typically ranging from 55m2 upto around 110 m2.

Wasteland

Wasteland!

Of course there are bigger properties but they are rarer as Developers knew that overseas buyers could afford to spend generally between 60,000 - 90,000 pounds sterling!

The irony is that as a result if you had the extra cash and bought a large 150m2+ 3 bed property in a prime location you made a good buy as scarcity keeps them in demand. One beds are also letting/selling whilst the middle market of bog standard 2 beds is decimated with price convergence as a result between one and two bed properties!

Architects were charged with maximising every possible square inch of saleable space, hence you find properties squeezed into the eaves with awkward shear columns in strange places on the upper floor!

When the law was amended to allow Developer's to count terraces as being part of the GFA their size increased exponentially as it allowed Developers to sell you air at the same price as internal living space! A nice little earner and another way for Developers to cash in!  Indeed until recently it was not obligatory to have a parking space for each apartment and Developers often charged extortionate rates for 'optional' parking spaces as add on extras!

Your road madam

Your road madam!

Soft & Hard Landscaping:

Getting down to the nitty-gritty of snagging where does on begin?  I suggest we start with zoning, infrastructure, traffic management plans, hard and soft landscaping and access rights.  In future posts in this series on snagging we will move onto what to look out for on the external elevation and interior.

These key end-use issues which impact value and whole life cost of the built environment were often considered only as an after-thought in the frenzy to build high and fast. This has left a lot of properties literally stranded in a no man's land in suburbs such as Ovcha kupel, Monastirski Livadi, Vitosha, Dragichevo & Poligona. You can find brand new high-end developments without infrastructure in the middle of a brown field site surrounded by half completed shells cut short at the tail end of the boom!  With no asphalt roads to your completed development or worse still just a rutted boggy mud track, like some Spielberg re-make of The Battle of The Somme!

This stems from lax planning approval and bungs at the Municipality, when they should have quite clearly left many projects on the drawing board rather than giving them the go ahead.   But of course in true short-termist style back then it was a license to print money or so they thought getting on gravy train until it ran out leaving a responsibility vacuum in its wake!  With Developers pleading poverty from their Porsche Cayennes whilst the Municipality looks on and shrugs its shoulders, as if to say ''not me guv'', whilst the mud piles up and nobody runs an access road in.  The excuse from the Municipality and the Developer is that if they put down tarmac it will only get ripped up when building starts again on the row of unfinished developments, on what would often have been a green field site back in 2004!

In theory when new developments are finally completed (i.e. when the trucks have stopped trundling in with materials and out with site waste), Developers should chip in their share for infrastructure costs and the council should lay the necessary course of tarmac and facilities to make the area habitable. But in practice the pretty CGI (Computer Generated Image) of your off-plan property are all too often just an artistic whimsy!

Sadly as developments got behind schedule, banks foreclosed, foreign investors pulled out on final installments and Developers had spent the down payments many projects are left unfinished and the infrastructure with it! There are even mausoleums to Developers and investors fevered fantasies dotted around the outer suburbs of Sofia as testament to hasty development, short term thinking and poor planning!

Indeed in one case I know of in Ovcha Kupel the foreign and local owners have clubbed together to chip in their share of 500 Euros to lay an aggregate track so that they can  drive a car up to their block, use their expensive underground parking and get in without dragging their muddy boots behind them like some parody of that famous rugger veteran Fran Cotton!

Nice Dead Shrub

Nice (dead) Shrub!

Hard landscaping around the development is all too often poorly laid without proper fixing, paving laid on a sand bed with little in the way of jointing.  In such an extreme climate with temperature variations from +38 degrees down to -20 degrees the heave from freeze-thaw action soon does the rest!

As for soft landscaping, (you know those green bits you saw on the CGI's), if existent is often neglected by handover as it has taken so long to get Act 16 and there is no FM in place.  It is thus not uncommon to get a few withered shrubs as owners and developer squabble over onerous Block Management fees which were as much as 9 Euros-12 Euros / m2 per year!  (but that's another story, see previous article!).

Often the hard landscaping around the building perimeter is laid above the underground parking facility.  In some cases the roof of the underground parking lacks the structural integrity it should have so you need to look for differential settlement at he interface between the external elevation and ground zero.  Cars have often been parked on the paving above the underground parking dislodging them and even causing leaks to the underground parking.  Not to mention poor rainwater management systems with insufficient drainage and down-pipes running directly into the underground parking facility! ....at least then you get the water feature you were denied on the CGI!

Sofia Casa

We strongly recommend that you get an experienced professional property consultant to do the necessary due diligence before you buy and if you have already bought to carry out a thorough site survey and inspection for defects, before you make your final stage payment.  That way you stand a chance of getting the Developer to do remedial works before final handover on completion. Contact us at Sofia Casa for this service.

POSTED BY JAMES FLINT ON THU 16TH FEBRUARY AT 16:57 GMT
TAGS: Sofia Property, Bulgaria Property
Brokeri-shmokeri! (Why brokers give real estate professionals a bad name in Sofia!)

For our latest Ad. campaign we wanted to personalise the marketing with a human touch hence the hands rather than simply pictures of the properties we have developed for rental. The concept is that we are pull rather than push unlike so many 'Brokeri-shmokeri' we want future tenants to be comfortable so we tailor a property search to their precise requirements rather than simply herding them like cattle towards the stock that we have on our books with spurious claims as to the delights of a property that quite simply has nothing to do with their criteria! Over the years we have met so many clients who turn up on our doorstep mangled by the system pushed from pillar to post by these bandits called brokers who make them pay the taxi fare to see real estate in the wrong location, price or style or worse all three! There is nothing like the abuse of the word 'Lux' in the local real estate market and also the euphemism 'Aristocratic'!!! The former means it has new often cheap tiles and laminate at best whilst the latter means you are probably going to have to dust the armchair down before you sit in it and wade through cobwebs to get to the kitchen! (incidentally why do so many 'Lelya' (auntie) brokers have dark blue or red rinses and wild perms?) Brokeritsa!

Brokeri

At Sofia Casa we try to take all that stress out of the equation for our clients by getting into their mind-set and pre-filtering according to our own high standards so as not to waste their precious time or ours! As a boutique agency that is the best way to compete with the big boys with a tailor made service all the way. So although it is a risky strategy to use a negative in a tag-line in an advert it is a conscious distancing marker, to state from the out-set that we are not like the ''brokeri-shmokeri'' that give too many real-estate agencies a bad name in Sofia!

Sofia Casa

James Flint www.sofiacasa.com

POSTED BY JAMES FLINT ON WED 8TH FEBRUARY AT 09:28 GMT
TAGS: Sofia Property, Sofia Casa, Bulgaria Property
Winslow Gardens, Sofia

Our management team have been on site to view the Winslow Gardens development in Sofia where some property secrets clients bought into back in 2007. Our report states that it is a lovely development built to a high standard but with no road yet in place from the West, letting or selling at this point in time may be quite difficult.

James Flint, Director of Sofia Casa said "the Developer KRIT is holding up installation of an asphalt road to the development and until this issue of infrastructure is resolved it is going to influence sales/rentals. Sadly this is all too common a problem in this area of Sofia".

The development is completing for handover and investors who bought in to the project are urged to contact James on 00359 (0) 2953 0116 james@sofiacasa.com for management, fit-out and rental issues.

Winslow Gardens

Winslow Gardens

Winslow Gardens

Winslow Gardens

If you would like more information on this development progress, or have a question on your Bulgarian Property, including issues on the soon to complete Selene Development, contact James at Sofia Casa on 00359 (0) 2953 0116 james@sofiacasa.com

Sofia Casa

POSTED BY JAMES FLINT ON FRI 27TH JANUARY AT 12:27 GMT
TAGS: Sofia Property, Europe Property

, Bulgaria Property
Common Sense Is The Rarest of Senses!

A Code of Working Practice, Bulgarian Tradesmen:

When you are project managing a renovation project in Bulgaria it can be frustrating.  There is no point tearing your hair out if work practices and standards here are different to those you expected. It is a case of managing expectations from both sides to minimise the chance of conflict and maximise the chance of on-time, on-quality, on-price delivery of the works.

You may have assumed expectations that are tacit but not explicit so why not make things clear from the start as to what standards you expect your workers to comply with on site. At the very least then when you do blow your top they know why and you can point out where the failure to satisfy your requirements as client/project manager has occurred.

I was mulling this over and drew-up a very simple, short Code of Practice and decided to post it here on the Blog, in the hope that it might inspire others to avoid common socio-linguistic and cultural pitfalls on-site?  So stop culture clash and get a working code of practice so everyone knows where they stand and what is expected of them!

Why not take my lead and draw up your own Code of Practice with your priorities and expectations on site (this is only an example) ...maybe it could sound a little Utopian to those of you with bitter experience of running small construction projects here in Bulgaria but why not give it a try, you have all to gain and nothing to lose! ...indeed one might add that if they are not willing to accept such basic principles then you can weed out those builders that are not going to be good for you, before engaging them.

Success or failure is in your hands forget 'hard skills' take a step back and refocus on the soft skills!  Get the communication right and you'll have a much better outcome and a better working atmosphere on site!

Code of practice:

  1. 1. Listen to instructions. Don’t interrupt.
  2. Ask when you don’t understand.
  3. Be ready to learn new techniques.
  4. Communicate and plan schedule for deadlines. Be ready to prioritize work if urgent.
  5. Don’t always ask what materials, make suggestion. Buy your own materials.
  6. Bring correct tools to site.
  7. Mask all areas. Clean up after work.
  8. Don’t complain if you accept a job.  Have pro-active attitude. Maintain highest standard of work at all times.

Sofia Casa

James Flint www.sofiacasa.com

If you have any queries with your Bulgarian Investments - ask James at investments@propertysecrets.net

POSTED BY JAMES FLINT ON THU 24TH NOVEMBER AT 13:41 GMT
TAGS: Sofia Casa, James Flint, East European Property, Bulgaria Property
Greek Marathon or Greek Tragedy!

Look what happened to СТРОЙКО! ('Stroiko' Construction Trade-Fair, Sofia, Bulgarira)

Information Centre at Stroiko

Information centre!

Look what happened to Stroiko!  I remember it being a sprawling buzzing frenetic bazaar, filling the entire square to the brim, with people hawking everything from loft insulation to revolutionary waste water management systems, roof tiles, wrought iron railings and cast iron stoves!

Having lived here in Sofia through pre-boom to boom and now post boom, there was something poignant and allegorical about seeing this huddled group of remaining business, clinging to a corner along one side of the NDK (Palace of culture), with the majestic indifference of Vitosha Mountain emblazoned across the bright Autumn horizon!

Stroiko Banner

Big banner, no stands!

It is of course not only Bulgaria that has suffered  the worst crisis in living memory, but the whole of Europe the 'PIGS', with Greece in particular taking on mythological significance, as a symbol for all that went wrong with the Euro! (I even heard that the French urged letting the Greeks into the Eurozone in 2001, because of their historical contribution to Western civilization ...all of which has about as much to do with sound monetary and fiscal management as Ouzo does to sobriety!

One feels that one requires the stamina of a Marathon runner to get through 'The Wall', so to speak, as has been living under the constant pall of the great 2008 credit crunch!  Living so close to Greece and watching BBC & CNN & listening to BBC Radio-4 last week was exhausting.

It had felt as if we were starting to level out with signs of activity returning to the property market when a giant Greek monkey wrench was thrown into the works!  This was compounded by lack of decisiveness from Messers Merkel & Sarkozy which only added to a growing sense of disquiet.

With the Greeks as major trading partners and geographical neighbours it is very real here on the ground in Sofia.  Especially as Greeks have a major stake in the Bulgarian banking sector, with recent figures suggesting that 30% of them are Greek owned!

Stroiko

Hey did I miss it?

Here's hoping that the latest QE bail-out with all its 'haircuts' and complex mechanisms, to help write down Greek debt and ring-fence Italy, Spain (even France some say?!) works and we can start to enjoy a return to confidence once more.

When we do, let this be a salutary lesson, allowing us to plan for more responsible spending and sustainable development in the future.  As the saying goes ‘beware of Greeks bearing gifts’!

It was a long hard week but we hope to be back firing on all cylinders by next Monday with a more optimistic outlook!  Until then as they say a picture speaks a thousand words and I will let them do the talking for once!

Sofia Casa

James Flint www.sofiacasa.com

If you have any queries with your Bulgarian Investments - ask James at investments@propertysecrets.net

POSTED BY JAMES FLINT ON MON 31ST OCTOBER AT 12:21 GMT
TAGS: Sofia Casa, James Flint, Greece Property, Europe, Bulgaria Property,

Stroiko

Bulgarian accountants like giant paper eating tigers!

VAT & Accounting Practices in Bulgaria

In the UK Chartered accountants have to be committed to continuing professional development & training every year to keep their knowledge and skills up-to-date, they have to follow a code of ethics and are subject disciplinary procedures if the are found to be in breach. They also have to have professional indemnity insurance to demonstrate their commitment to quality assurance and the upholding of the highest professional standards.

In Bulgaria as in the UK legally anyone can call themselves an 'accountant' however sadly over here there is no Bulgarian Institute of Charted Accountants. I am told there is what loosely translates as a Bulgarian association of auditors but its influence has never appeared to be as influential or all prevasive as the ICAEW (Institute of Chartered Accountants of England & Wales).

Accounting in Bulgaria is like feeding a voracious paper shredder with an insatiable appetite that fills Bulgarians, let alone foreign investors, with dread rather than offering them succor as they enter the maze of red tape and bureaucracy that is the Bulgarian tax regime. It seems that the former Communist regime is having the last laugh, gifting us with an army of Ex-Soviet era accountants, who still practice their dark arts as agents of the state!

VAT declarations are made monthly unlike in the UK with a strictly enforced deadline of the 14th. The closer to the 14th you get the more your feel your hackles rising in trepidation. It is not like anticipating Valentines day or a Birthday, rather a day of impending doom when a grey number cruncher (your Bulgarian 'accountant') visits your office to tell you how much you owe the state.

Small companies, as we all know are the lifeblood of any economy, employing upto 80% of the labour-force, yet (astonishingly!) the average size is only four persons, including the owner-manager. With this in mind the burden of being VAT registered in Bulgaria, is in my view too heavy for small business, acting as a brake on the dynamic start-up creation that the country needs to shake the crisis.

Tales abound that if you put a foot wrong, however unwittingly, without malice of forethought, the NAP ((BGN Inland Revenue), more like the Bulgaria equivalent of Al Qaeda!), will swoop down on your business, freezing accounts, demanding financial reports & scouring your books in search of wrong doing. With the NAP it feels you are guilty till proven innocent! Whilst on the one hand this is understandable in a nation afflicted by VAT fraud, there needs to be a sense of balance to temper this heavy handed approach. I once suffered the same fate with the NAP demanding a report and 100's of pages of supporting documentation to be translated into Bulgarian, within ten days of receipt of the registered summons dated 19th of December! Luckily we have that rare breed, a good Bulgarian accountant and were able to use contacts in the Ministry to explain that I would be away for Christmas with family in the UK, hence it was unreasonable. They thankfully offered and extension and we were able to sort out the issue in the new year. Whilst this is anecdotal, it gives one a sense of the capricious nature of the bureaucratic machine, once its cogs start to grind! It sometimes makes me wonder how any business gets done In Bulgaria? If this is life above ground no wonder so many businesses choose to live in the shadow economy rather than stare down the oncoming NAP juggernaut like some stunned rabbit, frozen in its headlamps!

I had high expectations of this esteemed profession however all too often In Bulgaria these so called 'accountants' cling to their title like a limpet to a rock in an ever changing sea of regulation with a misplaced pride and dignity that is breathtaking to behold! Instead of a proactive approach that denotes professionalism and engenders confidence, too many Bulgarian accountants see their main activity as filing tax returns, like giant paper eating tigers on the 14th of every month. They are not to be questioned or queried and are to be obeyed at all times. You are made to feel that you are there for them, not the other way around. Indeed you almost need to employ an in house administrator just cope with the demands of your paper hungry external accountant. All to often you are summoned to deliver documentation to their premises, at their behest even though you are paying for their services. Sadly many are little more than a glorified tax collectors, making it ironically one of the few successful state privatizations since the shift to Democracy.

Many accounting firms, even the big ones, are passive beyond belief. A client of mine (no names!) one day found that his bank account had been frozen by the authorities. He then discovered that he owed 50,000 BGN in unpaid property and waste collection rates. When he asked why his accountants had not pointed this out earlier? They explained they had not been asked, didn't have funds, or any number of excuses, such as breaking a finger nail on the day in question! One would think that they would red flag it like a lifeguard in Cape-town seeing a swarm of shark fins in the surf, but no, it was not part of their remit.

The moral of the story is don't try to get a Bulgarian accountant to take responsibility for his or her inaction. You are supposed to understand Cyrillic & accounting, in fact why bother with their services at all?!  All too often they point out what you should have done after the fact, like watching a car crash in slow motion, waiting to pick up the road kill once you have collided head on with the tax man over some minor bureaucratic transgression.

When you ask them to find creative, commercially orientated solutions to the practical accounting problems that affect your bottom line, they look at you as if you just asked footballing legend Hristo Stoichkov to read Tolstoy and provide a 20 second synopsis of the plot in English! ...Of course, how foolish, as highly trained and experienced accountants this is not what they are paid to do! I once asked a Bulgarian accountant for a monthly statement of income and expenditure only to be met with a pout as if I had just asked him to hand count the grains of sand on Bondai Beach!

Of course, if you have got this far you will be aware I am having a bit of a rant and fun with my own sense of personal melodrama, which is maybe more a reflection of my weakness in the field and my antipathy towards all things bureaucratic. Yet on a serious note in Bulgaria it is precisely a competent, proactive, trustworthy, English speaking accountant that one needs most yet they are nearly as rare as a hot Summer back in blighty! I have to add in case I cause offense that my preferred accounting firm in Sofia   is Dutch owned and staffed by competent and diligent Bulgarian accountants!

Sofia Casa

James Flint www.sofiacasa.com

If you have any queries with your Bulgarian Investments - ask James at investments@propertysecrets.net

POSTED BY JAMES FLINT ON THU 6TH OCTOBER AT 11:30 GMT
TAGS: Sofia Casa, James Flint, Bulgarian Accountants

, Bulgaria Property
Bulgaria Desperately Needs A Long Term Integrated Tourism Strategy!

Ultimately Bulgaria can offer value for money, second homes and holiday property in a way that few other countries can. Indeed a recent article named Bulgaria the second best value eastern destination for British Tourists.

Tourism is already up by 6% for the first two months of this year and visas from Russian tourists are up by 50% year on year!  Much of this growth is due to the global economic crisis with tourists seeking budget destinations.  This season there is an interesting twist with a spike in demand an unexpected but very welcome dividend as tourists seek alternative destinations after the ongoing unrest in the Middle East.

This ‘windfall tourism’ is not driven by a long term marketing strategy & the risk remains that whilst Bulgaria indirectly benefits it fails to capitalise on the opportunity to showcase Bulgaria to the influx of first time visitors.  I fear that short termism, under-investment in infrastructure & the poor service culture might undermine Bulgaria’s chances to consolidate on this unexpected boost.

Why one asks have Bulgarian governmental bodies and institutions not pushed harder to establish the country as a leading tourist destination?  Who should be held responsible for the recent World Economic Forum’s ranking of Bulgaria as 48th in terms of travel & tourism competitiveness?

On taking office in 2009, Boiko Borisov’s cabinet decided to shut down the former State Tourism Agency maybe not a bad thing in and of itself as in 2008 it had a paltry budget of only 2M Euros!.

Under Boiko tourism was incorporated into an expanded Ministry for Economy, Energy, and Tourism.  As yet this restructuring seems to have born little fruit in terms of tourism development.

Whilst recent TV campaigns on  BBC International and CNN show a marked improvement, with the ‘’Magic Lives Here’’ campaign.  It has been plagued by controversy as the making and broadcasting of the video totalled 3.7 M Euros!  A significant sum for a country of this size. The campaign is partially funded by the EU & experts in the field of advertising have commented that the production price of almost 250,000 Euros is way too high.  However the critics seem to forget that it marks a vast improvement as until only very recently the disastrous slogan was:

''Bulgaria easy to find!''

I used to cringe every time Bulgaria’s Ad came on the screen thinking that the creative director must have been very lost not to have found a better rallying cry for his beloved nation!  Bulgaria’s Ad’s frequently outclassed by elegant campaigns from neighbouring minnows Macedonia & Montenegro with their ‘’Timeless’’ & ‘’Wild Beauty’’ slogans respectively.

Why are the big tour operators not falling over themselves to get a piece of the touted Bulgarian miracle ....the new Costa?!

Ultimately if big tour operators don't get behind Bulgaria’s tourist industry investments in leisure property will have put the cart before the horse in the hope that Bulgaria some day gets its act together!

The onus should be on the large developers and government to cooperate, integrate and  in a proper tourist marketing, communications and infrastructure strategy.  This is after all a vital part of the economy! Tourism closely follows automobile exports as the third largest Net contributor to the GDP of a nation.

However it seems they have fallen short and underperformed for a long time now without the foresight or motivation until nascent signs of improvement only very recently, with the jury still out on that.  One has to ask why?

Sadly many Bulgarian politicians and the powers that be in local government seem to be too busy looking for the best angle to exploit their office in exchange for personal influence or financial gain.  One only has to look at the recent ‘Vertue’ mobile phone scandal that saw MP’s scurry out of Parliament on the day of an important vote for the promise of a free handset, only to find that the whole event was a media sting.

Many developers and it has to be said some investors sought the promise of a quick turn-around on the back of off-plan sales without giving thought to how to drive sustainable tourism to Bulgaria to fill the many golf courses, spas, ski-chalets and berths at fancy new marinas.  Without a joined up and coordinated policy many leisure developments will continue to underperform & with low occupancy rates failing to deliver satisfactory ROI to overseas property investors.

It would be a start if the Bulgarian hospitality industry up-skilled their service culture to allow this fine of country to compete with neighbouring Turkey, Greece & Croatia and even Spain & Portugal as a regular holiday destination of choice.

Bulgaria is a great country with wonderful potential however if radical change is not implemented fast the weary fatalism will continue to govern public perceptions of those in power and much of this amazing country’s potential will continue to be squandered!  Ultimately Bulgaria would benefit from cleaning up public life and looking forward to a more dynamic future, rather than looking back dwelling on historical grievances.  This might allow Bulgarians to take a longer term view of their future as a nation, instead of hedging short term odds with least cost options.

Investment in and protection of the rich cultural & archeological heritage dating back to magnificent Thracian ancestry, the 500 or so mineral Springs, ecological & sustainable tourism, adventure tourism and other niche high value-added attractions could kick-start a small revolution which over time would add revenue streams by diversifying from the main staple of sun sand ski, adding a more year round appeal.

There have been great improvements in communications with Bulgaria now hosting routes from all the major no-frills airlines.  The recent link to Plovdiv by Ryan Air being worthy of special mention as this town is indeed a hidden gem!

The country also has huge potential as a destination for the ‘silver pound’.  Although hit hard by exchange rates there still remains great underlying potential for the development of retirement homes & villages with the abundant space and glorious nature this land is blessed with!

This might start to underpin a more sustainable revival in leisure property development after the mad rush to the coast and the overcrowded ski-resorts. By allowing ‘brand Bulgaria’ to shine not only as a low cost destination competing on the lowest common denominator of price with a near total dependence on mass tourism.

This will take political will, considerable vision and an integrated approach with the backing of  EU funds.  A new future for post boom Bulgaria awaits and I for one hope that it brings sustainable, long term growth to a sector in need of direction & development!

Sofia Casa

James Flint

www.twitter.com/insidebulgaria

POSTED BY JAMES FLINT ON MON 18TH APRIL AT 11:37 GMT
TAGS: Sofia Property, Plovdiv, Montenegro Property, Macedonia Property, Europe Property

, CEE Property, Bulgaria Property
Bulgaria before Bagels....

Is it possible to tear off a quick blog in just 10 minutes before rushing to grab coffee and bagels on my way to the office? Well I am going to give it try!

Stream of consciousness about the market in Sofia at the moment is that it is really at the low water mark on the rentals front, very tough to gain traction.

There is the new landlord/tenant tax situation to contend with. If you are a company renting from an individual you are now charged with the states responsibility to act as a 'pro-bono' tax collector for 'Batko Boiko' (Boiko Borisov)! What that means is that 10% of the rent is withheld at source and the tenant has to administer payment of that sum to the fiscal authorities one month in arrears. It is just one of those additional hidden burdens and costs of entry to market that you may not realise you are going to face before investing or working in BG! ..of course great business for accountants (..errr or should I rather say glorified book-keepers?)

In BG as most ‘accountants’ perform the function of passive book-keeping, rather than pro-active financial consultancy, as we might come to expect in the UK. Of course you pay a lot more for it in the UK so I guess it all evens out! ...That said it would be a step forward if the accountancy industry in BG had clear standards and was more strictly regulated, so that you know what you have the right to expect and what not to expect, in terms of their services ….anyway I digress, where were we market update yes that’s it! 

With the crisis not only have we had fewer tenants, willing to pay less rent, (understandably in a renters market!) but also a slight increase in late payment/non-payment of rent with one corporate client 3 months in arrears without the cash flow to pay their rent. In the end we had to send this client a Notary Invitation ('Notarialen Pohanite') basically a formal late payment notification/eviction order, luckily it worked and they have now paid in full!

As for sales with the lack of liquidity in the market and high interest rates from banks the nascent middle classes are still feeling the pinch. As a result demand is holding up for 1 bed properties under 55,000 Euros however a vast swathe is cut through the middle of the market with buyers unable to get financing. There is still some activity in the high end residential segment for prime property at 160,000 Euros and above where high net-worth individuals with no need for financing are driving some deals through.

Good news that I enjoyed reading, after browsing Twitter, (I am new to the Twitterverse!), was to find that a huge Mall is going up next to the IKEA in Simeonovo and that as I had predicted, it would provide the stimulus, or as my father says 'Positive KITA' (i.e. Kick In The A**e!) for the authorities to pull their fingers out on completion of the ring-road! This will be a real boon for all those cart-before horse investors in property along the ring-road, who found themselves lumbered with Spa-Centre/Vitosha ski-lift apartments that nobody wanted to rent due to grinding bottle necks. Hopefully the infrastructure and facilities will greatly improve rental/sales prospects for those with the patience & wisdom to wait.

Must dash off now to the Notary to help some UK clients with a POA.

Now how long did I take to dash this off and post it 18 minutes well not quite the 10 I had allocated, but at least as ever, true to form!

Sofia Casa

James Flint

www.twitter.com/insidebulgaria

POSTED BY JAMES FLINT ON TUE 8TH FEBRUARY AT 11:08 GMT
TAGS: Sofia Property, Europe Property

, Bulgaria Property


James Flint

James Flint

Director & Owner of Real Estate service SofiaCasa, JamesFlint (BA Hons., MA, MSc) is based in the Bulgarian capital full time.

Having worked hard to invest wisely & understanding local business culture in Bulgaria, James’s inside knowledge & expertise regularly helps clients with their property investments in Sofia where he provides facilities & property management, project management, refurbishment & interior design.

 RECENT BLOG POSTS


 Visit our online Book Shop

Visit our online Book Shop