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How to Buy Below Market Value Property in BulgariaFor many property investors buying below market value is the only game in town in these challenging times. How do you go about finding bmv bargains in a foreign real estate market? Where do you start and what are the common pitfalls? Read whole article about bmv deals in Bulgaria... Authorities reveal a rise in property scamsWednesday, 22 April 2009 - Property Investment Strategies
Why invest in real estateAs you're probably aware, some of the world's richest people have made their fortunes by investing in real estate. Most people think that you need a lot of money, a good credit score and substantial savings to invest in property, however this is simply not the case.But what about people with low income, little savings or bad credit?In today’s global market, more than ever before, a whole world of opportunity has opened up for the beginner real estate investor. Regardless of your income levels, credit history or real estate investment experience there are real estate investing opportunities for you. Unfortunately most beginner real estate investors feel like they will be limited because of low income levels, not enough savings or bad credit.Is real estate a safe investment?As with any investment there is risk associated with property investment. There are countless people who claim that real estate investment is a poor investment choice.However as global investors ourselves and property advisors we are perfectly aware that property markets don’t move in sync on a global scale and, as opposed to stock markets, there is a real decoupling effect in different geographical areas. As an example the property market in Bulgaria rose over 30% nationwide in 2007 while it shrank by 10% and more in the USA and the UK. Real estate investing is one of the best wealth building tools aroundIn the past, people have said the same bad things about real estate investment as others are saying today. Here are just a couple of examples. "Houses cost too much for the mass market. Today's average price is around $8,000 - Out of reach for two thirds of all buyers. (Science Digest, April 1948) "The medium price of a home today is approaching $50,000.... Housing experts predict that the future prices won't be that great. (Nations Business, June 1977) "Financial planners agree that houses will continue to be a poor investment. (Kiplinger's Personal Finance Magazine, November 1993). Home investing definedReal estate investing involves the purchase of a home or land for profit. Profits are accumulated slowly by renting out properties, or are generally improved and resold for a capital gain.Home investing advantagesThere are many gurus out there that contend that real estate is a panacea where you cannot lose money. Although this is false, there are a number of advantages to investing in real estate. The first big advantage is that it is an extremely expensive product. Each sale you make generates more profit potential for this reason.Leverage, or the ability to borrow based on the value of the property, is probably the second greatest advantage. It is much easier to finance real estate than any other product. In real estate investing, one only needs to have a fraction of the purchase price available (like 10%, 20% or 30%) as a down payment. Therefore, real estate, although incredibly expensive, is still easier to buy than say, a luxury car of the same value. No money down property buyingThere is no such thing. If you have no cash to fund the down payment on that house or condo you fell in love with you will have to find it, it’s as simple as that. Best selling authors and gurus will always try to trick you into buying their courses and books on how to invest with 0% down. The truth is if you are short on cash you will have to go out there and find it i.e. borrow it one way or the other.Home investing disadvantagesReal estate is an illiquid investment that needs maintenance and taxes to be paid. A balanced investment portfolio has some liquid assets that can be quickly converted to cash to sustain the real estate when its returns are not sufficient to pay its recurring costs. Typically a Bulgarian property will carry an annual maintenance obligation of EUR7 - 10 per sqm.During a real estate boom, speculators can be prone to make purchases without pre-calculating the costs involved in the purchase and for the ongoing costs of a property. The real estate can then sometimes work against them instead of for them, realizing a loss at resale. There is no guarantee that upward trends will continue as society changes; financial and economic crisis can cause large scale changes. An example is the credit crunch that has started in the summer of 2007 in the USA and affected the property market in the U.K. On the other hand that’s created the best buying opportunities not seen in the US since the early 90ies. Some emerging markets have seen a decline in prices as well. Our job as property investors and advisors is to look out for such developments although we are confident the risk/reward ratio in the “New Europe” remains more attractive than ever. Why invest in Bulgaria
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