Why it is dangerous and not profitable to invest and buy a real estate property on your own?

You don't know the market for real estate properties. Not all investors/buyers know that the prices of the real estate properties in different market segments are different, and their growth is different.

For example we know that the growth of the prices of the real estate properties in different countries is different. The experienced investors know that investment in agricultural land brings more profit than investment in apartment. These investors, that have experience, know that every plot and property have different market attractiveness. Due to these reasons before the decision to invest we have know details regarding the specific real estate property.

The situation in Bulgaria is interesting because due to its economic state, ecology, climate and geographic location the country attracts many foreign investments, due to there reasons the buyers are not only Bulgarians but also foreigners. That is how many segments are formed in the real estate market. Even a situation arises that in one real estate sectors the prices are constantly going up, while in other sectors the prices don't change and don't bring profit to the investors.

There are many segments in the Bulgarian real estate market which have different profitability. Some of you learn of that for first time. The real estate market in Bulgaria is divided on these segments:

I segment. Apartments in the resorts:

1) Golden Sands (Златни пясъци);

2) Sunny Beach (Слънчев бряг);

3) Ski resorts (Bansko, Pamporovo);

4) Other resort areas (Balchik, Albena, Biala, Obzor, Sozopol, Carevo);

5) English villages (Rogachevo, Osenovo, Sokolovo);

6) Resorts near golf courses (Kavarna, Albena, Kranevo, golf courses: Black Sea Rama, Thracian Cliffs, Lighthouse Golf and Spa Resort);

Regardless of quality and location of the real estate property for the period between 01.2006-12.2007 , the biggest increase of prices is resulted in 4 and 6 segments. Our expectations are that the prices of the apartments in the ski resorts of the country will keep the same lovel or even fall. The first signs were noticed during 2006-2007 year, due to the unusually warm winter. After time the prices in the other resorts will also normalize.

II segment. Apartments in the big cities of Bulgaria (Sofia, Varna, Plovdiv):

The prices are 600 – 2700 €/м2 (according to data for 2008.01). The income was up to 35 % per year (for period 2007-2008).

Although the apartment sales in Bansko have lowered 10 times, the demand for apartments in big cities of the country is high and the prices are constantly increasing (for period 2007-2008).

When was the last time you were offered an apartment in the big cities of the country? Why they offer mainly in the resorts? In the big cities almost nobody pays commission the the brokers, that is why in the resorts it can be taken a commission from 10  and more. Why in the cities they don't pay commissions? Because it is very ease to sell one even without a intermediary.

III segment. Plots near by the big cities. As example in Varna, in the most active market in Bulgaria, the plots can classify as follows:

The different segments of the real estate market bring different income. The price of the land is between 5-3000 €/м2. The profit is from 30 to 200 % for one year (2006-2008).

IV segment. Commercial plots:

The commercial plots were very attractive segment during 2007 year. The prices of these plots were: 10-25 €/м2. In the industrial zones the prices are between 70-300 €/м2.

V segment. Wine yards.

The prices of the wine yards start from 5 €/м2;

VI segment. Big parts of agricultural lands.

You collect information about the real estate market in incorrect way. You most commonly use: information from random real estate agencies, you use only information from the internet. Due to these reasons you do not get the full information about the areas and their specifics, you don't analyse constantly the market, you don't live in this country, you don't know the culture, the customs, local views, you don't know who is the future buyer of your investment property.

First example from the practice. Big customers (>300 000 €) They study the real estate market more than a year and a half and only one segment of the market, for example the segment of construction in big cities. The worst part is that after a year and a half the investor understands that he chose unsuitable segment, for this period the tendencies have changed, the plots in the cities have risen, and the will to profit remains on the same level. Then the investor starts to study another segment of the real estate market. For this period the investor doesn't take a profit of about 80–140 % (increase 2006-2007-2008). Then the doubts arise whether it is worth investing at all? The result is lost profit and loss of time and financial resources.

Second example from practice. We have collected information about region Х1 in the real estate market segment Y, but we discover thath in region Х2 for which we don't have enough information there is greater opportunity to profit even in the same real estate market segment Y. For example you have chosen commercial properties segment, but in the chosen region X1 the prices of the plots are higher than another region X2, where the infrastructure is better developed.

Third example from practice. An advertisement in Internet - plot in the village of Kamen Briag 90 €/м2. We check at another place, the plot can be bought for 4 €/м2. Where is the mistake, where is the correct price? The prices are correct in both cases. In the first case the plot is located at 180 m distance from the sea, in the village with building permit. In the second case the plot is 5 km away from the sea, in the agricultural land. Alone for itself the price doesn't speak if we do not know the exact parameters of the plot, its exact location, the area where it is located, the form, where the communications are located, whether next to it are some kind of projects, we also don't know at what prices similar neighbour plots or in the next area are sold. In order for the investment to be profitable we have to know the buyers who buy and with what purpose in this area.

How we differ from the other real estate agencies in Varna?

  1. The systematic information is at one place;
  2. We collect information from different sources;
  3. We develop "Price cards" - we watch the quantity of the offered properties and their prices. More about the principles of supplying offers for real estate property detailed in section "Land for Sale";
  4. Different from other real estate agencies we are very interested to choose the most suitable property and after that to seel it (take a look at the principles of work below);

Principles of work:

With the clients we work by several schemes:

  1. Commissions X %;
  2. Y % from the profit after the sale of your property. This is the most suitable option for the investors, because the investor receives guarantee that the company will not forget him and is interested in selling his property with biggest possible profit. Growing Markets wins only when you receive profit. In this case Y is always bigger than Х;
  3. We also have the possibility to participate in investment projects.

Undoubtedly your services are expensive?!

The price of our services reflects the market price, and the services we offer are of highest quality. The investment can be a total loss if you don't invest in the suitable segment, if you analyse the market very long or if you use the services of incompetent real estate agencies.