As it emerges from years of semi-isolation behind the infamous Iron Curtain, Bulgaria is becoming a more and more attractive place for foreign nationals to make investments of different types in the real estate market. (With that said, and as will be discussed thoroughly later, a foreign national cannot presently directly own real estate in Bulgaria.

The prohibition against direct ownership should be changed within the coming decade. And, in the interim, there are ways in which a foreign national can take title to real estate in a more indirect manner -- which will also be discussed in detail shortly.) Presently, the biggest demand made by foreigners when it comes to real estate in Bulgaria involves residential property.

Many Europeans and individuals from some other countries around the world are buying Bulgarian residential property to establish holiday or vacation retreats. Additionally, more and more savvy investors from different countries around the world are becoming more involved in the ownership of business or commercial real estate in some of the major cities in Bulgaria, most particularly in Sofia, the Bulgarian capital and Varna on the coastal regions of the Black Sea.

Investment Property in Bulgaria

As mentioned, more and more international investors are putting money into real estate in Bulgaria for investment purposes. For example, these investors are buying real estate that is being developed for business and commercial purposes -- especially in and around Sofia. (Once again, an investor needs to keep in mind that a foreign national cannot own real estate directly in Bulgaria at this time. Again, there are mechanisms available to deal with this prohibition that will be presented and discussed later.)

Another area in which foreign investors are becoming more active is in the purchasing of apartments or apartment complexes which are then being rented and leased to the influx of people that have taken to coming to Bulgaria to participate in the burgeoning economy of that country since it has become more fully integrated into the overall European community of nations.

Residential Bulgarian Property

As referenced, there are a significant number of overseas buyers who have taken to buying residential property in Bulgaria for holiday or vacation purposes. This includes people who have purchased elegant and substantial villas in different parts of the country as well as the more affordable and less costly apartments. In any case,

Bulgaria is proving to be experiencing a sharp increase in the number of residences that are being sold to people who are looking for second homes for retreats, vacations or holiday homes in Bulgaria. Finally, with many people moving to Bulgaria from other countries around the world, a great demand has been placed for the development of single family homes and houses as well as apartments in many parts of the country.

Residential Real Estate - Apartments in Bulgaria

Due to the prohibitions against foreign ownership of land in Bulgaria that likely will remain in place for approximately ten more years, many people are opting to purchase apartments. Because apartments normally are sold as units and without the conveyance of any actual land, a foreigner directly can purchase and own an apartment. Throughout Bulgaria, apartment sales have been brisk with many people buying holiday apartments in the Black Sea resorts of Sunny Beach, Golden Sands, Nessebar as well as the Ski Resorts of Bansko, Borovets and Pamporovo.

In addition, each year a significant number of new apartment complexes are being developed in all of the major cities in Bulgaria and in many more rural communities as well. Again, due to the prohibition against the direct ownership of land by a foreign national, many people are opting for apartment ownership at this juncture.

Holiday Property in Bulgarias Resorts

As mentioned earlier, many foreign buyers have taken to seeking and purchasing real estate in Bulgaria for vacation or holiday purposes. One of the most interesting trends in the Bulgarian real estate market at this time involves the renovation of substantial residents -- including breathtaking and historic villas and chalets -- in different parts of the country.

These magnificent properties are being restored to immaculate condition and are then, in many instances, being purchased (indirectly) by foreign nationals to be used as retreats, vacation or holiday destinations. In addition to the trend towards the rehabilitation of older properties in Bulgaria, a significant number of new and off plan residential developments are under construction in many resort communities in Bulgaria.

Bulgaria has worked diligently, through its government and through the private sector, to attract tourists and tourism money into that country over the course of the part five to ten years. Indeed, an ever growing number of people are finding themselves attracted to Bulgarian resorts and have begun to purchase (again, indirectly unless the residence is an apartment) real estate and residences being developed in this various resort communities in Bulgaria. Most Bulgarian real estate market analysts expect the trend towards the development of vacation-style residences to continue well into the next decade as an ever increasing number of people begin to discover Bulgaria and its resort destinations.

Specific Steps to Buying a Property in Bulgaria

Since it has emerged from behind the Iron Curtain, Bulgaria through its government has worked to bring that nation into the mainstream of international commerce. However, and with that said, Bulgaria remains in a period of transition when it comes to some commercial matters. This particularly is the case when it comes to the ownership of real estate by a foreign national within the borders of Bulgaria.

At the present time, the Bulgarian national constitution actually prohibits foreign nationals from directly owning land in Bulgaria. With that said, the governmental leaders in Bulgaria are in the process of changing the country's constitution to allow for the direct ownership of land in Bulgaria by foreign individuals. The proposed constitutional changes likely will not be in effect until 2014 or 2015.

Understanding that a foreign national cannot directly own land in that country at the present time, this does not mean that a foreigner cannot own property in Bulgaria "indirectly." In other words, if a person is interested in owning land in Bulgaria, there is an additional step that he or she will need to take in advance of making such a purchase and of assuming such ownership of real property.

Keep in mind that if a foreign national is interested only in purchasing an apartment -- to which no land will be involved, to which any land outside of the apartment unit will be conveyed to the foreign national -- direct ownership is, in fact, permissible.

If a person is interested in buying or investing in land in Bulgaria, and if that person is not a Bulgarian citizen, he or she will need to establish what is known as a Bulgarian Limited Company through which land in Bulgaria can be purchased and legally owned. In order to set up or establish a Bulgarian Limited Company, a person will need to plan on spending just under one thousand Euros. In most instances, a qualified real estate agent in Bulgaria should be able to offer this service to a foreign national.

Once this Bulgarian Limited Company has been established, the hunt for land/property to purchase can begin in earnest. At the time that a piece of property has been identified that a person is interested in buying, an oral offer to purchase is made to the seller. If the seller orally accepts a buyer's offer, the next step in the purchasing process is the preparation and signing of what is known as a preliminary contract.

Customarily, in Bulgaria, at the time the preliminary contract is executed, a 10% deposit is placed or made by the buyer. Generally speaking, the deposit is non-refundable unless the seller withdraws from the contract or cannot, in the end, provide a clear conveyance of the property in question to the buyer. In other words, if the buyer pulls out of the deal, he or she will lose his or her deposit money.

In Bulgaria, perhaps more so than in many other countries in Europe and elsewhere in the world, it is imperative that a very thorough title search be undertaken. In addition, an independent survey of the property subject to the sale should be taken to ensure that the legal description of the property is, in fact, correctly stated. Unfortunately, Bulgaria has somewhat of a reputation of being a country in which titles to real property and survey descriptions are rather muddled in more than a few instances.

Once the title to the real estate is deemed clear, and once all other inspections and evaluations have been completed, the time will arrive for the signing of the final contract. This must take place in the office of a notary public. When the final contract is signed, all state and municipal taxes will need to be paid as well as the remaining balance due and owing on the real estate. After the final payment is made, the deed will be transferred into the buyer's name, which in the case of a foreign national will be the Bulgarian Limited Company. .

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