Hi there!
Well, the summer trip is finished. It was really nice, but there were alot of things to do there! I flew there and back on a new low-cost airline with a non-stop flight to Sofia and return to Rome-Ciampino. I have to say that the flight was LOTS better than the Sofia - Milano - Perugia return combination that Alitalia offers, including the seven-hour stopover in Milano! If someone wants to know who the low-cost airline is, please drop me an e-mail. I don't like to advertise on the blog... well not for free anyway!
It was an exciting time to be in Bugaria! The five nurses and the Palestinian-Bulgarian doctor who were kept in jail for eight and a half years in Libya were finally returned to Bulgaria and were then pardoned by the President.
I have to say, it's amazing how much work can pile up when you're out of the shop for three weeks! I'm working on a write-up for Good2004.biz, and I'll post that there on the newsletter page as son as it's finished.
Stay tuned!
Ciao for now...
Craig
Tuesday, July 31, 2007
Thursday, July 26, 2007
GREAT NEWS!! and a New Look... sort of
Hi there!
The big news for us, of course, is the return of the five Bulgarian nurses and a paramedic from Libya. They landed in Sofia Tuesday morning, and were greeted by government officials and their families. You can read the complete eight and one-half year story at http://www.youarenotalone.bg/ in English or Bulgarian text and pictures. See also the text block to the right...
Over the past days we redesigned the look of our blog. It is mainly noticable from the wider text block (if you have a 16x9 dimensioned screen, you'll probably see it, otherwise you may not see any difference). Let us know what you think?
Ciao for now...
Craig
The big news for us, of course, is the return of the five Bulgarian nurses and a paramedic from Libya. They landed in Sofia Tuesday morning, and were greeted by government officials and their families. You can read the complete eight and one-half year story at http://www.youarenotalone.bg/ in English or Bulgarian text and pictures. See also the text block to the right...
Over the past days we redesigned the look of our blog. It is mainly noticable from the wider text block (if you have a 16x9 dimensioned screen, you'll probably see it, otherwise you may not see any difference). Let us know what you think?
Ciao for now...
Craig
Saturday, July 21, 2007
Three new clippings
Hi there!
There are three new clippings this weekend which will be published on Good2004.biz later this week.
One, “Romanians’ interest in Bulgaria,” discusses the fondness of the Rumanians for vacations on Bulgarian beaches, and why (better water, lower prices) and explains that the Rumanian Black Sea coast tends to be polluted by the water from the Danube River delta which channels “all the dirt from Europe into the Romanian area.” Buyers from Rumania are still seldom, but market surveys have started all the way down to our area of Nessebar/ Sunny Beach. Even last summer, we had Rumanian tourists in our hotel in Nessebar’s Old Town.
The second clipping talks about the ecological responsibility of construction projects and developments. The also show an example of return on investment:
“The project is being offered to clients at an average of 13% below current market value, so owners benefit from an inherent profit from the moment they buy. If a conservative average capital growth of 15% is assumed over a 5 year period with a 70% mortgage, investors stand to earn a substantial 183% return on investment equating to an average annual rate of 31.26%”
Which brings up a question. Do you know how to calculate a return on investment? This is a relatively simple calculation that is most easily done on a Microsoft Excel® or similar spreadsheet. If you don’t know how, speak to your financial advisor or look in the Internet for a typical calculation.
For those of you who don’t know (or have forgotten), Return on Investment (ROI) is a calculation that shows the interest rate you would have to earn from a bank to equal the return (profit) you get from an investment (in this case, buying a house). Since you can only expect to receive around 4-6% interest from a bank account, the return shown above of 31% is a nice investment. The bank interest rate can be fixed, and is relatively secure. HOWEVER, a speculative real estate investment is more risky. For example, you can have problems with the house’s construction, the market may not move with the speed – or in the direction – you had anticipated, you can have other non-related problems that make you back out of the investment without attaining the gains you anticipated. Not to mention possible political problems (although I think these are relatively unlikely in Bulgaria and the European Union).
If someone wants more on the ROI calculation, let me know, and I will show and explain a simple example in a future blog entry. There are also other financial measuring sticks, like payout or payback time, that can be used to describe the attractiveness of a project. Maybe we’ll discuss these in the future?
The third clipping - SATURATION OF SUPPLY ‘RUINING’ PROPERTY MARKET IN BULGARIA’S BANSKO RESORT - focuses on the potential negative aspects of investing in any real estate market. This shows what can happen in an over-developed market. This is one of the circumstances any investor should take into consideration when investing solely or principally for capital gain. Bansko has a number of problems to take into consideration when you compare it to the Nessebar area: it is dedicated to a small geographical area, it has infrastructure problems that will not be easy to solve, access in the prime skiing season is difficult, and it is a small market that is substantially overbuilt. The Nessebar – Sunny Beach – Ravda area is much larger, geographically and economically. The area is not overbuilt – and the summer construction-stop helps regulate this. The infrastructure is in much better condition, although still not great. Access is easy – daily national and international flights to and from Bourgas, plus easy access by highway, and (of course) no snow in the summer season!
Ciao for now…
Craig
There are three new clippings this weekend which will be published on Good2004.biz later this week.
One, “Romanians’ interest in Bulgaria,” discusses the fondness of the Rumanians for vacations on Bulgarian beaches, and why (better water, lower prices) and explains that the Rumanian Black Sea coast tends to be polluted by the water from the Danube River delta which channels “all the dirt from Europe into the Romanian area.” Buyers from Rumania are still seldom, but market surveys have started all the way down to our area of Nessebar/ Sunny Beach. Even last summer, we had Rumanian tourists in our hotel in Nessebar’s Old Town.
The second clipping talks about the ecological responsibility of construction projects and developments. The also show an example of return on investment:
“The project is being offered to clients at an average of 13% below current market value, so owners benefit from an inherent profit from the moment they buy. If a conservative average capital growth of 15% is assumed over a 5 year period with a 70% mortgage, investors stand to earn a substantial 183% return on investment equating to an average annual rate of 31.26%”
Which brings up a question. Do you know how to calculate a return on investment? This is a relatively simple calculation that is most easily done on a Microsoft Excel® or similar spreadsheet. If you don’t know how, speak to your financial advisor or look in the Internet for a typical calculation.
For those of you who don’t know (or have forgotten), Return on Investment (ROI) is a calculation that shows the interest rate you would have to earn from a bank to equal the return (profit) you get from an investment (in this case, buying a house). Since you can only expect to receive around 4-6% interest from a bank account, the return shown above of 31% is a nice investment. The bank interest rate can be fixed, and is relatively secure. HOWEVER, a speculative real estate investment is more risky. For example, you can have problems with the house’s construction, the market may not move with the speed – or in the direction – you had anticipated, you can have other non-related problems that make you back out of the investment without attaining the gains you anticipated. Not to mention possible political problems (although I think these are relatively unlikely in Bulgaria and the European Union).
If someone wants more on the ROI calculation, let me know, and I will show and explain a simple example in a future blog entry. There are also other financial measuring sticks, like payout or payback time, that can be used to describe the attractiveness of a project. Maybe we’ll discuss these in the future?
The third clipping - SATURATION OF SUPPLY ‘RUINING’ PROPERTY MARKET IN BULGARIA’S BANSKO RESORT - focuses on the potential negative aspects of investing in any real estate market. This shows what can happen in an over-developed market. This is one of the circumstances any investor should take into consideration when investing solely or principally for capital gain. Bansko has a number of problems to take into consideration when you compare it to the Nessebar area: it is dedicated to a small geographical area, it has infrastructure problems that will not be easy to solve, access in the prime skiing season is difficult, and it is a small market that is substantially overbuilt. The Nessebar – Sunny Beach – Ravda area is much larger, geographically and economically. The area is not overbuilt – and the summer construction-stop helps regulate this. The infrastructure is in much better condition, although still not great. Access is easy – daily national and international flights to and from Bourgas, plus easy access by highway, and (of course) no snow in the summer season!
Ciao for now…
Craig
Wednesday, July 18, 2007
Hot weather!
Hello from Bulgaria!
It has been really hot in the center of the country for the past few days: 37-38°C (around 100°F) up to 40-41°C (104-106°F) in the Danube basin, and is predicted to stay that way for the next week or so. The positive part for us is that the sea breeze at Nessebar has kept the daytime temperatures down to about 30-31°C (mid 80's F) and the nights are cool, around 20°C (70°F). The sun is hot, good for tanning, but the shade is comfortable.
I was on the beach today, and the water temperature is about 24-25°C (75-77°F), nice and refreshing when you get in, but not cold. The water is clear, and you can see your feet clearly for as long as you can stand on them. The south end of South Beach of Sunny Beach (the resort just north of Nessebar) has shallow water for about 25-30 meters (80-90 feet) out from the shore, with almost no waves.
Ciao! That's all for now...
Craig
It has been really hot in the center of the country for the past few days: 37-38°C (around 100°F) up to 40-41°C (104-106°F) in the Danube basin, and is predicted to stay that way for the next week or so. The positive part for us is that the sea breeze at Nessebar has kept the daytime temperatures down to about 30-31°C (mid 80's F) and the nights are cool, around 20°C (70°F). The sun is hot, good for tanning, but the shade is comfortable.
I was on the beach today, and the water temperature is about 24-25°C (75-77°F), nice and refreshing when you get in, but not cold. The water is clear, and you can see your feet clearly for as long as you can stand on them. The south end of South Beach of Sunny Beach (the resort just north of Nessebar) has shallow water for about 25-30 meters (80-90 feet) out from the shore, with almost no waves.
Ciao! That's all for now...
Craig
Sunday, July 15, 2007
Bad news?
Hi there!
There is a new clipping on Good2004.biz/news.htm about a decline in occupancy in the Bulgarian Black Sea resort area hotels. What does that mean for the apartment market there? The bears will shout "the beginning of the end!" and the bulls will shout "just a technical correction!"
Well, there are a few points that should be made about the hotel occupancy levels:
Firstly, the information shown doesn't discriminate between new hotels and old hotels or between the levels of the hotels (2-star or 5-star or in-between). This is significant because there are a number of old Soviet-era hotels that are trying to compete with recently built hotels, and (mostly) failing. To give you an example, we just reserved rooms at an older hotel in downtotwn Nessebar for mid-July (only 1 week in advance), and we are paying BGN 24 per night for double rooms (for 1 or 2 people) less 10% for more than 6 nights. That's about €11 per night, with three meals per day included!
Next point: hotels built in the beginning of the current boom period generally were not built very well, and the infrastructure was not appropriate for supporting them. These hotels are also having troubles competing with newer hotels.
The third item that is causing the distressed occupancy numbers is that more and more Bulgarians are going on vacation abroad! On the other hand, there are twice as many Roumanians vacationing in Bulgaria as last year. Confusing results here!
One other item is that the US dollar is weak against the Euro now. That is taking buying pressure off the resort markets (rentals and purchases) because the prices in USD are higher, and Americans and others with dollar-based or -related income and investments are feeling the pinch.
I also think that the success of apartment sales is impacting on the hotel business. Many Bulgarians bought or are buying apartments at the beach to have vacation there any time they want, rather than to spend money on a hotel and take everything with them each time they go. I suppose, ultimately, that the sales of apartments will suffer also, but that has yet to happen. Note that older "new" apartments are also subject to the older "new" hotels' problems.
What are the results for a potential investor?
I think that this is an indication of the short-term ups and downs of the vacation business. Bulgaria will continue - in general - to expand it's vacation resort business. Why? It is still one of the least expensive resort areas in the EU! Transportation to-and from Bulgaria is becoming more available and less expensive. The Lev is fixed to the Euro now (at the rate of the old German Mark), and eventually Bulgaria will join the Euro club. The apartment business - my estimate - still has at least 5-10 years before the expansion slows to a rate consistent with most of the rest of Europe - EU and non-EU. By then, the prices will have doubled or tripled from today's level. Also, mortgage money is becoming more available to Bulgarians and non-Bulgarians alike. In another article (it's not on the Good2004 website), there was a note that Bulgaria enjoyed economic deflation of 0.4% in June - a strong monetary position! Support for apartment sales also will come from the growing middle-class Bulgarian who will want to express his new-found buying power with a new (at least for him) vacation apartment.
Is it time to buy?
Looking medium- to long-term, I think yes, and now! Use the short-term dip (if it even exists) to leverage better prices from the builders (who are forced to look short-term), and use Euro-based mortgage money to leverage your capital.
Happy investing, and enjoy your vacation!
Ciao for now,
Craig
There is a new clipping on Good2004.biz/news.htm about a decline in occupancy in the Bulgarian Black Sea resort area hotels. What does that mean for the apartment market there? The bears will shout "the beginning of the end!" and the bulls will shout "just a technical correction!"
Well, there are a few points that should be made about the hotel occupancy levels:
Firstly, the information shown doesn't discriminate between new hotels and old hotels or between the levels of the hotels (2-star or 5-star or in-between). This is significant because there are a number of old Soviet-era hotels that are trying to compete with recently built hotels, and (mostly) failing. To give you an example, we just reserved rooms at an older hotel in downtotwn Nessebar for mid-July (only 1 week in advance), and we are paying BGN 24 per night for double rooms (for 1 or 2 people) less 10% for more than 6 nights. That's about €11 per night, with three meals per day included!
Next point: hotels built in the beginning of the current boom period generally were not built very well, and the infrastructure was not appropriate for supporting them. These hotels are also having troubles competing with newer hotels.
The third item that is causing the distressed occupancy numbers is that more and more Bulgarians are going on vacation abroad! On the other hand, there are twice as many Roumanians vacationing in Bulgaria as last year. Confusing results here!
One other item is that the US dollar is weak against the Euro now. That is taking buying pressure off the resort markets (rentals and purchases) because the prices in USD are higher, and Americans and others with dollar-based or -related income and investments are feeling the pinch.
I also think that the success of apartment sales is impacting on the hotel business. Many Bulgarians bought or are buying apartments at the beach to have vacation there any time they want, rather than to spend money on a hotel and take everything with them each time they go. I suppose, ultimately, that the sales of apartments will suffer also, but that has yet to happen. Note that older "new" apartments are also subject to the older "new" hotels' problems.
What are the results for a potential investor?
I think that this is an indication of the short-term ups and downs of the vacation business. Bulgaria will continue - in general - to expand it's vacation resort business. Why? It is still one of the least expensive resort areas in the EU! Transportation to-and from Bulgaria is becoming more available and less expensive. The Lev is fixed to the Euro now (at the rate of the old German Mark), and eventually Bulgaria will join the Euro club. The apartment business - my estimate - still has at least 5-10 years before the expansion slows to a rate consistent with most of the rest of Europe - EU and non-EU. By then, the prices will have doubled or tripled from today's level. Also, mortgage money is becoming more available to Bulgarians and non-Bulgarians alike. In another article (it's not on the Good2004 website), there was a note that Bulgaria enjoyed economic deflation of 0.4% in June - a strong monetary position! Support for apartment sales also will come from the growing middle-class Bulgarian who will want to express his new-found buying power with a new (at least for him) vacation apartment.
Is it time to buy?
Looking medium- to long-term, I think yes, and now! Use the short-term dip (if it even exists) to leverage better prices from the builders (who are forced to look short-term), and use Euro-based mortgage money to leverage your capital.
Happy investing, and enjoy your vacation!
Ciao for now,
Craig
Friday, July 13, 2007
Real Estate News
Hi there!
I finally found some new news after traveling to Bulgaria. There are three new articles on the http://Good2004.biz/news.htm page. They are all relatively interesting for investors and prospective investors.
The first (“Real estates market gave rise to loans to foreigners” from 7 July) is a two-page article from the Focus News Agency that discussed financing for real estate purchases in Bulgaria. This should give a non-resident investor a good idea of what to expect in terms of financing possibilities. The two most interesting items mentioned are the maximum amount that an investor can expect to borrow (typically 60-80% of the purchase price as estimated by the lender), and the borrowing interest rate compared to typical British real estate loans (1 to 1½ percent premium). The article is well worth reading!
The second article (“Bulgaria: A green and pleasant land?” from 9 July) reports on a report published on the website of the Bulgarian branch of the WWF. There, it gave warnings and some reasonable information about the situation with respect to environmental “hazards” for investors.
The third article (“COASTAL MUNICIPALITY WANTS CONSTRUCTION ON BULGARIA’S SOUTHERN BLACK SEA COAST TO BE BANNED” from 11 July) is a short description of one of the local battles going on for new construction in potential environmental “hazard” areas (see paragraph above). The article gives the reader an idea of what can happen, if one does not exercise sufficient caution.
As I noted above, we are now in Bulgaria (in Sofia at this writing), and will be on site in Nessebar next week. You can expect a report on the Good2004.biz website shortly after that – I’ll give a note here as well.
Ciao for now…
Craig
P.S. “Ciao” is an Italian word that was picked up by the Bulgarians somewhere in the early 20th century, along with “merci”. The meanings in Bulgarian are the same as in the original languages, but “ciao” is usually only used for “goodbye” in Bulgarian. “Merci,” originally French, is still “thank you.”
I finally found some new news after traveling to Bulgaria. There are three new articles on the http://Good2004.biz/news.htm page. They are all relatively interesting for investors and prospective investors.
The first (“Real estates market gave rise to loans to foreigners” from 7 July) is a two-page article from the Focus News Agency that discussed financing for real estate purchases in Bulgaria. This should give a non-resident investor a good idea of what to expect in terms of financing possibilities. The two most interesting items mentioned are the maximum amount that an investor can expect to borrow (typically 60-80% of the purchase price as estimated by the lender), and the borrowing interest rate compared to typical British real estate loans (1 to 1½ percent premium). The article is well worth reading!
The second article (“Bulgaria: A green and pleasant land?” from 9 July) reports on a report published on the website of the Bulgarian branch of the WWF. There, it gave warnings and some reasonable information about the situation with respect to environmental “hazards” for investors.
The third article (“COASTAL MUNICIPALITY WANTS CONSTRUCTION ON BULGARIA’S SOUTHERN BLACK SEA COAST TO BE BANNED” from 11 July) is a short description of one of the local battles going on for new construction in potential environmental “hazard” areas (see paragraph above). The article gives the reader an idea of what can happen, if one does not exercise sufficient caution.
As I noted above, we are now in Bulgaria (in Sofia at this writing), and will be on site in Nessebar next week. You can expect a report on the Good2004.biz website shortly after that – I’ll give a note here as well.
Ciao for now…
Craig
P.S. “Ciao” is an Italian word that was picked up by the Bulgarians somewhere in the early 20th century, along with “merci”. The meanings in Bulgarian are the same as in the original languages, but “ciao” is usually only used for “goodbye” in Bulgarian. “Merci,” originally French, is still “thank you.”
Saturday, July 7, 2007
News ... finally!
Hi there!
There are two new news clippings on http://Good2004.biz/news.htm. One is a comprehensive review of why Bulgarian real estate is still a good investment, but notes that a prospective buyer/investor should be picky. The other indicates that the Bulgarian market is overheated, but at the same time says it's still a good investment and prices are still increasing - something doesn't quite measure up here. In any case, I should have more personal observations soon.
Hope you're all enjoying the summer!
Ciao for now...
Craig
There are two new news clippings on http://Good2004.biz/news.htm. One is a comprehensive review of why Bulgarian real estate is still a good investment, but notes that a prospective buyer/investor should be picky. The other indicates that the Bulgarian market is overheated, but at the same time says it's still a good investment and prices are still increasing - something doesn't quite measure up here. In any case, I should have more personal observations soon.
Hope you're all enjoying the summer!
Ciao for now...
Craig
Thursday, July 5, 2007
New clippings
Hi there!
There are two new clippings on http://Good2004.biz/news.htm, but both are general in nature. One should be required reading for people interested in Bulgaria and Bulgarian real estate. It is a snapshot report of the situation in Bulgaria, produced by an independen group of individuals for a major Swiss bank. The other clipping talks about new inexpensive air flights to Bulgaria.
I'm on my way to Bulgaria next week for about 2-1/2 weeks. There should be a good report some time afterwards, again on http://Good2004.biz/news.htm, plus additional information here. More later...
Ciao for now...
Craig
There are two new clippings on http://Good2004.biz/news.htm, but both are general in nature. One should be required reading for people interested in Bulgaria and Bulgarian real estate. It is a snapshot report of the situation in Bulgaria, produced by an independen group of individuals for a major Swiss bank. The other clipping talks about new inexpensive air flights to Bulgaria.
I'm on my way to Bulgaria next week for about 2-1/2 weeks. There should be a good report some time afterwards, again on http://Good2004.biz/news.htm, plus additional information here. More later...
Ciao for now...
Craig
Subscribe to:
Posts (Atom)
