How Buying a Second House Can Bring Income
(CNN) -- Stocks and shares may offer an extra income, but for business travelers used to flitting from country to country, there's another option that can offer both healthy returns and healthy relaxation.
Investing in a second home overseas is an increasingly common practice for executives comfortable with doing business in foreign places and, provided you choose the right location, there's money to be made.
With sleepy towns, tricky red tape and bumpy road networks, Bulgaria might not seem like the best location, but the country is one of a handful of eastern European nations that have emerged as darlings of the property market.
Among the thousands of investors who have beaten a path to Bulgaria are British businessman Dave Hunt, who has invested $140,000 in a chalet with picture postcard views of some of the country's best ski slopes.
"There were three things in our mind when we looked for a house to purchase as a family. The first one was holiday home, the second was capital growth or protection at least, and the third was potential rental income in the future," Hunt told CNN.
"We wanted to have a regular skiing holiday. We were looking for somewhere that was good value for money, as we're a large family, and it can be quite pricey, especially when you take the kids up and so on.
"Bulgaria was referenced to us by other people, word of mouth, and we did a bit or research on the Internet as well, and found that it was really good value for money, and good skiing, and also a growth area."
Hunt says his investment is already paying off, with prices rising from 800 euros per square meter to 1,400 in the space of 12 months.
And with a potential income from renting the property out, there's even more money to be made.
But what advantages Bulgaria offers in price and value, some say it loses in infrastructure. The roads are typically not well maintained and its land and deeds system are not in line with the rest of Europe.
According to current law, foreigners cannot officially buy land and must set up a company -- although this is set to change when the country joins the European Union in 2007.
Although Bulgaria is now abuzz with construction work, the situation is very different from that of three years ago, says James Hughes, a British expat and hotel owner.
"There was no property for sale, there was no one who spoke English," he said.
Housing boom
"There were two estate agents in the whole country. Four people spoke English in the whole town when I first got here. Nowadays there are a few hundred estate agents, and hundreds of developments."
The new construction has attracted the attention of airlines, which are expanding routes to take advantage of the new market.
"Typically, when somebody buys a property, that generates nine or 10 flight tickets," said Josef Varadi, chairman of budget Hungarian carrier Wizz Air, which will launch a new London to Sofia route in May.
"Based on my info, last year, more than 20,000 properties were sold to UK inhabitants. Now if you take the mathematics, we are talking about hundreds of thousands of people and travelers during the year.
Poland and Croatia are also sharing in the housing boom with yields of around five percent.
But it is Germany that is offering the most bangs for bucks.
"We regard German at a point in its cycles where there's a great deal of value in the things that one buys," says Francis Greenburger, New York-based CEO of Time Equities, which is investing heavily in Germany.
"Apartments in Berlin are selling for, let's say approximately 600 to 100,000 euros per square meter -- or around $90 per square foot. If you look at other major cities in the U.S., that's a very, very low price.
"In New York, which is a very high price market, condominiums are selling for anywhere between $800 to $3,000 a foot."
Investing in a second home overseas is an increasingly common practice for executives comfortable with doing business in foreign places and, provided you choose the right location, there's money to be made.
With sleepy towns, tricky red tape and bumpy road networks, Bulgaria might not seem like the best location, but the country is one of a handful of eastern European nations that have emerged as darlings of the property market.
Among the thousands of investors who have beaten a path to Bulgaria are British businessman Dave Hunt, who has invested $140,000 in a chalet with picture postcard views of some of the country's best ski slopes.
"There were three things in our mind when we looked for a house to purchase as a family. The first one was holiday home, the second was capital growth or protection at least, and the third was potential rental income in the future," Hunt told CNN.
"We wanted to have a regular skiing holiday. We were looking for somewhere that was good value for money, as we're a large family, and it can be quite pricey, especially when you take the kids up and so on.
"Bulgaria was referenced to us by other people, word of mouth, and we did a bit or research on the Internet as well, and found that it was really good value for money, and good skiing, and also a growth area."
Hunt says his investment is already paying off, with prices rising from 800 euros per square meter to 1,400 in the space of 12 months.
And with a potential income from renting the property out, there's even more money to be made.
But what advantages Bulgaria offers in price and value, some say it loses in infrastructure. The roads are typically not well maintained and its land and deeds system are not in line with the rest of Europe.
According to current law, foreigners cannot officially buy land and must set up a company -- although this is set to change when the country joins the European Union in 2007.
Although Bulgaria is now abuzz with construction work, the situation is very different from that of three years ago, says James Hughes, a British expat and hotel owner.
"There was no property for sale, there was no one who spoke English," he said.
Housing boom
"There were two estate agents in the whole country. Four people spoke English in the whole town when I first got here. Nowadays there are a few hundred estate agents, and hundreds of developments."
The new construction has attracted the attention of airlines, which are expanding routes to take advantage of the new market.
"Typically, when somebody buys a property, that generates nine or 10 flight tickets," said Josef Varadi, chairman of budget Hungarian carrier Wizz Air, which will launch a new London to Sofia route in May.
"Based on my info, last year, more than 20,000 properties were sold to UK inhabitants. Now if you take the mathematics, we are talking about hundreds of thousands of people and travelers during the year.
Poland and Croatia are also sharing in the housing boom with yields of around five percent.
But it is Germany that is offering the most bangs for bucks.
"We regard German at a point in its cycles where there's a great deal of value in the things that one buys," says Francis Greenburger, New York-based CEO of Time Equities, which is investing heavily in Germany.
"Apartments in Berlin are selling for, let's say approximately 600 to 100,000 euros per square meter -- or around $90 per square foot. If you look at other major cities in the U.S., that's a very, very low price.
"In New York, which is a very high price market, condominiums are selling for anywhere between $800 to $3,000 a foot."
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