Let’s consider the following – investing in property can be short-term и long-term.
In the case of short-term With regard to the investment, the buyer has the following options:
1. Buying a property off-plan and sells after the certificate of completion of the structural work – ACT 14 – or after commissioning – ACT 16. In this case, the buyer is looking to make a good, quick profit within 1.5 to 2.5 years. If they transfer the rights under the preliminary contract signed with the developer, they will not even owe any notary fees for the transfer, local tax or capital gains tax. This is one of the most successful ways to realise good profits.
The risks lie in the construction company’s security and reputation, as well as in premature increases in the prices of materials and labour. Many investors have included clauses providing for the early indexation of the final price, which the buyer is required to pay with the next instalment or upon completion of the transaction.
In this case, the buyer must take particular care to scrutinise the investor/developer, the documentation relating to the development and its financing.
2. He is buying a property in need of renovation. Once the repairs and improvements to the property have been carried out, the property should be sold at a higher price, thereby generating a profit.
The second type – long-term investment:
1. Rental income – Renting out the property on a long-term basis or for overnight stays provides a monthly income.
2. Capital gain is the profit we make by buying something at a certain price and then selling it for more than we paid for it. Even after a crisis in the property market, property prices always rise even higher than their previous levels. In other words, even if prices fall by 10–15–25 per cent, you can hold on to the property by letting it out – which covers the monthly mortgage repayment – and sell it at a profit when the market recovers.
Crisis
Understandably, every property buyer is concerned about a looming crisis and a fall in market prices.
Some examples of logical signals might include:
– High inflation
– An increase in mortgage interest rates
– A fall in the number of transactions over a given period
As we have already mentioned, even if property prices were to fall, you could hold on to your purchase, wait for the market to recover, and then sell your property again at a profit.
Our experienced professionals are on hand to find the investment property you are looking for and to guide you through the entire transaction process, from purchase to realising a profit, whether through letting or the sale of the property.
You can find out more about our team of professionals here:
https://bulgaria-estate.com/agents/
