From a UK perspective Bulgaria represents a budget option; a close, hot, affordable destination that is culturally more exotic in people’s minds to the standard issue Costa resort holiday that you might find in Spain or alike. As a result, British investors have bought considerable numbers of small and inexpensive studios to cater for this momentarily bygone demand. Whilst there is little doubt that higher demand will return once the side effects of the recession subside, it will be prudent to adjust your income expectations and marketing techniques to maximise your property’s appeal in the meantime.
What is the Russian Demand?
From a Russian perspective Bulgaria is held in much higher regard, history and long-term desire have forged an ingrained cultural trait that draws Russians to the Black Sea. Odessa in the Ukraine is typically where the elite will choose to holiday but prices are very high and certainly Bulgaria offers a better climate, larger beaches and superior value for money. Visas are required for Russian tourists to enter the EU, however this is no bad thing for apartment owners as they are inclined to take a single holiday in the year and for much longer. As a result, we find that Russian holidaymakers book accommodation for the same value as the Brits but for much longer periods, on many occasions this can be up to 3 months at a time.
What is renting and to whom?
Frontline Apartments (1st-2nd Line):
In our experience, wealthy Russian families holidaying in Bulgaria can often comprise of the immediate family members, the nanny and the pets. The vast majority of enquiries are for top end 2 bedroom apartments on the first line (beachfront)
Studios & One Bedroom Apartments:
If you have a frontline studio or one bed then it will rent equally in the current climate to a wide range of tourists and not specifically to Russians. However, these are slightly less likely to achieve long bookings and 50% occupancy through the summer should be expected at the maximum, this would be on an average of around 45-50 Euros / night.
3rd– 5th Line Apartments:
With some distance between your apartment and the sand the achievable income and level of occupancy will really depend on the quality of apartment and the facilities that you have to offer. Typically 3* one bedroom apartments are available on the day for 30-35 Euros / night, as such you are unlikely to achieve more than this from any pre-booked holidaymakers. These properties were largely in demand by British holidaymakers on budgets, however this group were few and far between last summer and not expected to be any more prevalent this summer. Last year we saw many cases where these properties were only rented a couple of times per month, as such the yield was very low as the current Russian demand is not aligned with this sort of accommodation. For owners in this position, see below.
Outer Area Apartments:
Many complexes have been built with marketing saying 500m from the beach, which would be true with assistance of flight but on foot the true distance is often 1km+. These apartments are very hard to rent successfully, when bookings are taken the client often wants to be moved elsewhere despite clarity in adverts etc. At this current time we suggest that the best route for these owners is to rent their apartments to domestic workers in Sunny Beach on short term tenancy contracts. It is normal to pay between 2-6 Euros / day based on 1-4 month contracts, this tactic results in a fixed income of 60-160 Euros / month which is considerably better than otherwise.
Lettings agents – who to use?
There are a variety of options when it comes to lettings agents; we have offices in London, Sofia, Varna and Sunny Beach and as such we can offer native English staff and on the ground capabilities. Other options include you advertising your own property through various UK based websites, taking enquiries / bookings and then agreeing for a local agent to take care of the transfers, key exchange, linen, cleaning etc.
Should you have any questions at all about letting property anywhere on the Black Sea coast or the content of this article, please contact the author; Christophe Gater http://www.newestatebg.com +442079934197.
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The New Estate Group deals exclusively with Bulgarian properties and its related markets; we are a developer, real estate agency, lettings agency, furniture importer and financial consultancy for mortgages, VAT claim back and offshore schemes.