Sofia cheaper housing leads to 7% annual yield from renting
The serious decline in housing prices in Sofia city encourage more clients to buy property for rental as the reduction of the selling prices is outpacing the rental prices. The properties that are purchased for investment are forming a relatively stable trend and a property that is bought for under 30 000 Euros could be successfully rented for 150 Euros per month, bring an average of 6 % annual yield and even more that that, while in year 2009 this annual yield was approximately 4 %. The property deals in Sofia are being concluded only when the prices are attractive and are set in areas with good infrastructure.
There is a certain tendency that some owners are selling properties in poor condition they have inherited in the central zones and replace them for modern apartments in areas with good infrastructure and better quality. Often these buyers were encouraged by the lending allowed by the banks. Due to the alternative ways of financing, the buyers have higher expectations for their financial capabilities. At the same time, the sellers are quite stubborn when it comes to reducing prices of their Sofia apartments and are not so willing to negotiate on the offered price. At the same time developers of large residential complexes are looking for direct buyers, offering them own lease schemes and flexible payment plans. In the group of the sellers are also included owners who are affected by unemployment and are selling their Sofia one- and two-bed apartments before leaving abroad.
At the moment, the leases are usually concluded for three to six months. This is so, because the landlords are now willing to contract for less than one-year period. The active tenants are usually returning from abroad and are looking for budget accommodation to settle in the country. These tenants are the reason to conclude transactions for sale of higher-price segment. Other such tenants are foreigners that are coming to stay for a few months and work here, or short-term tenants that are coming for a few days only but prefer the serviced Sofia apartments in front of the hotels.