TheTravelBug Launches New Distressed Property Section
11/11/2010

Back in 2004 and 2005 you could not open a newspaper or turn on the TV without hearing about Bulgaria being the place to invest, but fast forward 5 years and the situation could not be more different. Thousands and thousands of British and Irish investors bought apartments on the Black Sea coast and in the ski resort of Bansko, tempted by the guaranteed returns and promised capital returns. Now many of these investors are desperate to sell and re-coop some of their money. TheTravelBug is therefore launching a special section on the website for Distressed Property Sales in Bulgaria.

Online PR News – 11-November-2010 – – The boom in the Bulgarian property market around 5 years ago led to thousands and thousands of investors from Britain and Ireland buying apartments in holiday resorts in Bulgaria. Now, with the economic crisis and as rental returns have not materialised, there are currently many British and Irish desperate to sell the apartment they bought in the Bansko or Pamporovo or Sunny Beach and they are prepared to sell for much less money than they paid for it. These buyers were often promised high guaranteed rental yields of 5 to 10%, which they thought would cover their yearly management fees and mortgage repayments but have not seen a penny in rental returns. Or they were enticed into buying 2 or 3 apartments (often by being given a discount on the full purchase price) in the same complex and told that the property would double in value in a couple of years. Of course the opposite has happened.....

While this is bad news for those that invested in resorts such as Bansko and Sunny Beach, it is great news for those now looking to get a cheap seaside apartment or ski apartment, being sold as a distressed property sale in Bulgaria. With the current state of the property market, particularly in Bulgaria, there are many people desperate to sell. Distressed sales usually occur when cash is needed to cover immediate needs or debts or when someone decides they cannot afford the property for one reason or another, for example they cannot afford the mortgage repayments or the management charges. Or sometimes for personal reasons such as divorce or relocation. As well as the financial aspect of why people are selling there is also the psychological one. Many people have gone through horrible and stressful experiences to hold title to their Bulgarian property. They may have had ongoing issues with the developer, maybe the developer went bust and a new company took over, they were maybe ripped off by builders, lawyers or agents. This all leads to stress and anxiety and a wish to just be rid of the property in Bulgaria so they can close that chapter in their life and move on. Even if this means losing thousands.

However, apart from the odd good deal on ebay, Rachel, who runs and operates TheTravelBug found it incredibly difficult to find genuine distressed and below market value properties in Bulgaria. She found there were numerous websites and agencies supposedly offering distressed sales and properties below market value, but these were still incredibly over-priced in today's market. For example one website was selling a large 2 bed apartment in Bansko for 40,000 Euros less than the owners had paid for it two or three years ago. At first glance this seems like a definite BMV property, but when you consider that the owner probably paid well over the market price for it in the first place, knocking a few grand off what was paid for a property does not now make it below market value or a distressed property!

A quick look on a few websites advertising 'distressed property sales' shows a one bed furnished apartment in Bansko for 44,000 Euros - advertised as being the original sales price......but this is hardly below market value, let alone a distressed sale, given prices in Bansko are down by at least 50% and had never really increased in value over the last couple of years due to over-development. A more realistic price for this apartment would be around 20,000 to 25,000 Euros. Bansko was marketed as being the best up and coming ski resort, on a par with top European resorts. This was simply all hype. The skiing and snow cover is nowhere near the quality and quantity you get in France, Italy, Austria or Switzerland. That would have been fine if the prices reflected this but at the height of the boom people were paying well over 120,000 Euros for a 2 bed apartment there and 40,000 to 50,000 Euros for a studio or small one bed. And prices for food and drink and lift passes steadily increased until the prices were similar to what you pay in France and Austria.

Another website that promote themselves as offering Below Market Value properties advertise their sales as below the 'regular' price which is stated as meaning 20 to 50% discounted (presumably from original sales price although on a quick glance there were none at 50% of regular price and most were around 20 to 30% below the price paid for them). They even state that these properties can be bought and 'flipped' for gain - highly unlikely, if not impossible! Otherwise these sellers would be selling these properties easily!

So after researching the distressed property sale market in Bulgaria, TheTravelBug felt there was a gap in the market for a website dealing with genuine distressed sales. TheTravelBug will list private sales for a one off small fee. There are no agency fees involved, interested parties will deal directly with the seller. But if you would like to list your property on the site, you must be prepared to offer the property for at least 40% off what you paid for it, better 50% or less. As well as being listed on TheTravelBug website, your property will also be listed on TheTravelBug Facebook page and details will be sent to all on TheTravelBug mailing list (sent out once every two weeks), and listed on eBay. A sale is of course not guaranteed but if your apartment or house is very good value you will be more likely get a sale. For example apartments in the ski resorts or around the coast will gain interest and probably sell if priced for around 10,000 to 15,000 Euros or rural village houses for two or three thousand Euros.