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More and more foreign homeowners in Bulgaria are considering renting out their property during the tourist season. Their reasons vary: some want to earn money from an apartment while they are away, while others hope to cover the annual maintenance fee for their residential complex. Whatever your reason, renting out a home abroad involves certain difficulties. This article addresses the following questions:
- What problems do foreign landlords most often encounter, and how can the risks be reduced?
- What are the options for renting out property in Bulgaria, and what are the advantages and disadvantages of each?
The owner's dilemma: whom to rent to, how and at what price
Where can you find tenants, how should you negotiate with them, and how do you resolve disagreements? These are the main concerns that stop many owners from renting out their homes.
Finding tenants is relatively straightforward. You can create dedicated pages on forums and social networks, place advertisements on a specialist website such as VPUT.RU, or promote your property among friends and relatives. Dealing with rental matters locally is much more challenging. Owners can address these difficulties in three ways.
1. Manage the rental yourself.
Self-management is the most profitable option because there are no intermediary fees. At the same time, it is demanding, especially if you spend much of your time in your home country. Someone must hand over the keys, deal with payments and look after the property. This option is suitable only if you live in Bulgaria or can rely on neighbours or relatives nearby.
Another approach popular with Russian owners is to find tenants among friends and relatives in Russia, give them the apartment keys and receive payment under a rental contract. However, this means relying entirely on those tenants' honesty. It also substantially narrows your potential customer base, since visitors from Germany, Poland, Romania and Scandinavia also rent homes in Bulgaria.
2. Rent through the residential complex manager or developer.
This approach carries risks, since few Bulgarian managers will offer terms that are especially favourable to you. At best, you may be exempted from the annual complex maintenance fee and receive a modest additional payment. Agree to such mutually beneficial cooperation only as a last resort. Much will, of course, depend on the manager's integrity.
3. Rent through an estate agency offering property management services.
This reduces your profit but offers protection and removes many worries. Use only a reliable company. The intermediary's reputation, together with a properly drafted contract, will help you earn a good rental income.
How property management companies work
Management companies in Sunny Beach and other Bulgarian resorts follow similar principles, whether they are the complex administration or an independent provider. Rental services are generally supplied under a contract setting out the manager's duties and commission, usually 25–30% of the rental amount. The manager arranges storage of the owner's personal belongings, finds tenants, handles financial matters, pays utility bills and maintains the apartment. The management contract can be signed remotely or through your authorised representative.
The contract may contain additional terms, including a schedule for transferring rental income and a procedure for resolving disputes with tenants. To cover damage to furniture, you may be offered insurance costing no more than €100. For promising properties, management companies may pay the owner a fixed monthly amount, also specified in the contract.
How much can you earn from renting out property in Bulgaria?
Much depends on the apartment's location. Distance from the sea, proximity to the town centre, access to shops and entertainment, and whether the apartment is in an aparthotel or a residential building all affect rental income. The best combination of these factors produces higher income and better occupancy.
Income also depends on whether the property is let for short or long stays. Demand at the major Bulgarian resorts is mainly for short-term or daily rentals. There is also demand for long-term accommodation, particularly from seasonal workers serving tourists during the holiday season.
Long-term rentals are less profitable than short-term lets but provide a stable monthly income, transparent payments and greater peace of mind. The average monthly rent cited for Sunny Beach is €250 for a studio and €300–€450 for a one-bedroom apartment.
Daily apartment rates range from €10 to €70, depending on location and property quality. However, the landlord's total monthly income depends on occupancy, seasonal factors and the transparency of information supplied by the management company.
The average return cited for resort apartments in Bulgaria is therefore 4–4.5%. This figure must be adjusted for taxes associated with rental property.
What taxes does a landlord have to pay?
The article's tax figures state that contractual rental income in Bulgaria is subject to 10% income tax and 9% VAT. It also lists a one-off charge of €5 for each bed in the apartment. Some owners attempt to avoid paying taxes, but the article cites a €250 fine if the authorities discover an undeclared rental.
Read the article: Property taxes in Bulgaria
Advantages of renting through BolgarskiyDom
BolgarskiyDom's main business is property sales in Bulgaria. However, after examining the difficulties faced by foreign homeowners, we also focused on managing clients' resort properties. We have already helped hundreds of clients rent out their properties and established a reputation as a reliable management company. With established advertising channels, our own offices in major Bulgarian resorts, market knowledge and an understanding of Bulgarian legislation, we guarantee:
- maximum occupancy of your apartment during the tourist season;
- a good rental income;
- transparent information about tenants and income;
- property servicing, including cleaning, towel changes and other tasks.
Get more information about our terms of cooperation and prices.
5 tips for renting out property in Bulgaria profitably
- Look for tenants among friends, relatives and acquaintances. Make business cards, create social media pages and make use of word of mouth.
- Use current photos in your listing. Before photographing the apartment, tidy it and make the rooms inviting. Cleanliness attracts tenants and improves your chances of securing a good rental price.
- Always include the aparthotel's name, its location on a map and a detailed list of the complex's amenities.
- Do not set the price too low, since this can actually discourage potential tenants.
- Publish the listing no earlier than late February or early March, and update it as frequently as possible.
For more information, read: Tips for buying residential property to rent out
