A few years ago if someone had told you that you would one day seriously consider buying real estate in Bulgaria you would have thought that they were mad. Having only ceased to be a communist state at the start of the 1990s, the idea of owning real estate in Bulgaria would have been far from appealing.

But in recent years real estate in Bulgaria has lured thousands of British purchasers to its shores, and with the country set to join the EU in early 2007 its appeal is only likely to grow and grow for the foreseeable future.

Why buy real estate in Bulgaria?
The remarkable progress Bulgaria has made in the past decade – the country boasted GDP growth of 5.3 per cent in 2004, amongst the highest in Eastern Europe – has had much to do with its tourism market. Just as Western Europeans once flocked to the Spanish costas for their holidays, so Eastern Europeans made Bulgaria's Black Sea Coast their summer playground. When the Berlin Wall came down in 1989 it didn't take Brits long to catch on to the fact that Bulgaria offered similar holiday advantages to Spain but, crucially, at a small fraction of the price. When they then saw just how affordable real estate in Bulgaria was, the dream of owning a holiday home abroad, one they had been priced out of in already popular second home locales, suddenly became a reality.

Today, coastal regions are not the country's only popular locations in which to own real estate in Bulgaria. Bulgarian ski resorts, along with the capital, Sofia, have also both started to attract their fair share of British visitors and, as a result, property seekers. And while some purchasers merely wish to own a holiday home primarily for their own use, more and more are looking to make money on their purchase, either by taking advantage of the thousands of holidaymakers who head to the country looking for accommodation, or by the potential capital gains associated with real estate in Bulgaria – prices rose by 36 per cent last year.

Where to buy real estate in Bulgaria
The 354 kilometres of Black Sea coastline that stretches down the entire east side of the country boasts some of Bulgaria's most popular destinations for real estate purchasers. Sunny Beach and Golden Sands, along with the cities of Varna and Burgas, are all sought after locations for British buyers. With miles of sandy beaches, summer temperatures averaging around 20oC and a number of golf courses slated for development in the region, the appeal of coastal real estate in Bulgaria is not hard to see – especially as property there is still cheap.

"In lower cost areas like Sunny Beach you can get a new studio apartment for £15,000 or a one-bedroom apartment for £25,000", says Andrew Crump of BG Experience. "Even in a higher cost area, such as Balchik, located 30 minutes north-east of Varna, where there is an Ian Woosnam-designed golf course and a Marina being developed, a sizable villa with sea or golf views would only cost you somewhere between £100,000 to £241,000", he adds.

Access to the Black Sea coast is fairly good. The airports in Burgas and Varna both receive direct charter flights from the UK in the summer and while, at the time of writing, there are no low-cost airlines flying to either airports direct from Britain, rumours persist that both Ryanair and Easyjet are looking to expand their operations into both Burgas and Varna.

Elsewhere, real estate in Bulgaria's three main ski resorts – Bansko, Borovetz and Pamporovo – has started to attract as much attention as those on the Black Sea coast. Bansko tends to be the most popular of the three. Not only is it the biggest and most developed of the trio, but until recently it was hoped that it would be in with a chance of staging the 2014 Winter Olympics – it didn't make it onto the final shortlist, though.

While mountain real estate in Bulgaria tends to be slightly more expensive than those on the coast, Crump advises that you do spend a little extra buying real estate in Bulgaria in a complex with good facilities, rather than a cheap one with few or no facilities. Even in a five-star resort a one-bedroom apartment could be snapped up for as little as £50,000.

As with with the Black Sea coast, no low-cost airlines currently fly direct to any of the ski resorts, although once again it is widely tipped to only be a matter of time until at least one such service starts up.  

Away from the coast and the ski resorts, Sofia, the capital of Bulgaria, which is blossoming into a modern European capital city, has become an increasingly popular destination for business and residential investment. Custom-built villas and apartments, geared largely towards the buy-to-let market, are appearing in the city on what seems to be a daily basis.

Real estate investment potential
With tourism interest in Bulgaria showing no sign of slowing, real estate prices predicted to continue to rise – albeit not necessarily by as much as they have been – and EU accession fast approaching, the chance of investors to make a healthy profit on their real estate in Bulgaria is very good.

Sure, there are still certain things to consider that could affect your profit margin on your real estate in Bulgaria, especially for those who are planning on letting their home. For example, the Black Sea coast only boasts average temperatures of 20oC or above between June and August. In April they are still as low as 10.1oC, while in October they fall to 13.2oC. This seriously affects the length of the peak rental season. But when you factor in just how much real estate would cost you in a more established location, then the investment potential of your property in Bulgaria is likely to be attractive.

These days the suggestion of purchasing real estate in Bulgaria is unlikely to be met with the same kind of derision that it would have been up until as recently as 2002. And if you still think that someone making such a suggestion is sure to be insane, then there must be a lot of mad people around!

How to buy real estate in Bulgaria
1. As a buyer, you can enjoy complete confidence in your investment if you've gathered the right kind of information first. There are many factors to consider; your agent will be able to offer some advice and can help facilitate your acquaintance with the local area. This might even include visiting some real estate in Bulgaria and experiencing the culture first-hand prior to you making a commitment.

2. Ensure you're making an objective investment by finding out about the advantages and disadvantages in terms of: location, facilities, access, infrastructure, future developments, reselling opportunities and tax implications.

3. Once your curiosity is satisfied and your decision is made, a small reservation fee of around £700, paid to the developer, is enough to remove the real estate from the market and reserve it in your name.

4. A short time after the confirmation of the reservation you will receive a copy of your contract, not dissimilar to the equivalent property contract in the UK. Since these contracts are written under Bulgarian law, the appointment of an independent Bulgarian lawyer is  highly recommended; your agent will be able to help source a reputable one.

5. Once the contract has the lawyer's approval it should be signed, then your first payment of around 30–40 per cent will be due. A foreign exchange partner is the best way to ensure the most favourable exchange rate as you will need to make this payment in euros by direct transfer to the developer's Bulgarian bank account.

6. After a lead time of anywhere between 12 and 24 months, your real estate will be ready to hand over to you. The ownership is yours as soon as the full balance of the property price is paid and you (or your lawyer, if they are granted Power of Attorney) have met with the relevant Government Notary. Together you will inspect and approve your new asset and a tax of around 2 per cent plus some additional small fees will be payable.

7. Don't forget to save a few euros for a bottle of champagne in order to congratulate yourself – you're now the proud owner of real estate in Bulgaria!

Bulgaria factfile:
Timezone: GMT+2–3
Exchange rate: GBP1=EUR1.4407 (HiFX July06)
UK mortgage availability: Moderate
Deposit required: 10%
Agent's fees: 3–10% legal fees: 2–3%
Capital gains tax: 15%
Peak letting season: May to Sept (Varna)
Average daily temps celcius (Jan-Dec):
2, 3, 6, 10, 15, 20, 22, 22, 18, 13, 9, 5 (varna)
Average property prices: 1-bed apart: £36,740; 2-bed apart: £56,369; 3-bed house: £41,137

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Article published in August 2006