Buying in Albania...

Discussion in 'New and Emerging Property Markets' started by bullettooth, Oct 23, 2007.

  1. bullettooth

    bullettooth New Member

    Hi,
    I've been looking into buying an off-plan property in the Albania and would just like other peoples thoughts on whether this could/would be a wise investment? Or if anyone on here has bought property in Albania already and their views on the process, agents used?

    Also I would like to know peoples views on whether they would buy in the capital Tirana or buy in a sea resort?

    Thanks.
     
  2. bulbasaurus

    bulbasaurus New Member

    Albania is a minefield with most property being illegally built and being in an earthquake zone......Its a major issue.

    I went out and visited the only english speaking agency I could find (Balkimo dot com). The guy running it Mario, is a very credible ex Swiss banker. They have sold a couple of developments via Barrasford and Bird.

    They have a development called Terranova - its about Euro 600 psm. I was tempted but the rental market seemed a bit hit and miss so although it was cheap.....but this is probably your safest bet.

    In the end I invested in Bucharest.

    The coast is cheap again- 500 euro psm but a lot of the developments are quite small. That said, the season is much longer and warmer than Bulgaria - the same as Southern Spain so I can see it being an all year resort one day ( say 5 - 7 years).
     
  3. Stingo

    Stingo New Member

    Hi Bullettooth. I bought in Albania 12 months ago and like everybody else who buys there, bought it as a long term investment. Albania is in its infancy to the foreign market and of course like Spain all those years ago and Bulagaria and Montenegro more recently, there will not be a shortage of complications. Since buying I have been selling in strength to the UK, Irish and US markets. I run a company called Albania Estate and helped Balkimo into the foreign market and have found it an successful education. There are more hurdles to overcome, just like there are in any emerging or even established market but we are getting there. We still insist on making sure that all due dilegence is down before properties are put on the market. There is absolutely no sense selling something that is illegal,no matter how glamorous it may look. If you buy something illegally, there is a chance it maybe destroyed over a period of time but there is a chance it will not and you may happily sell it on to a local in years. Your choice , but we do not want to get involved. Property is cheap in the capital and we playing the game sensibly and making sure prices are not hiked up by developers, for hiking sake. Albania lacks certain infrastructure but is coming along nicely and for a city that is thriving on urbanisation Tirana is where it is happening. The international banks will give you finance through certain developments which is far earlier than Bulgaria and Romania had it. If the big banks are there , then someone must have thought it was good. I would suggest buying on the coast , only where the location is spot on. ie front line , now you have the choice. In 2 years obviously there will not be the choice, although I cannot see it ever being a Sunny Beach scenario. Rental is not the reason for coming into the City or coast at this stage. If you are down to your last euro then dont buy in Albania. Of course you may get rent but Albania is for capital growth right now. Just in a reply to Bulbasaurus - We sold Terranova and Soleal through Balkimo and am happy to report that sold more than any other agency. Marin is the gentlemans name not Mario and if you are going to worry about earthquakes then don't buy in Montenegro, Thailand and beware of serious terrorist threats in US, UK , Turkey, Spain, Egypt, Morocco , India, Pakistan, Italy ........ If you would like to discuss the market, the present and the future in Albania then please drop me a line or pm me.
     
  4. bulbasaurus

    bulbasaurus New Member

    Stingo the reason I mentioned earthquakes was in the context of the amount of illegal property and the likely use of substandard materials, shallow foundations etc. Another reason to buy property with the right papers and building regs. A lot of property was destroyed in Bucharest in '77 for example which now makes new build very safe in that City due to very strict building code that followed.
     
  5. Stingo

    Stingo New Member

    The only investments worth buying into are new build and land. <snip> New build qualities are now way ahead of what used to be built and are being constructed , in a majority of cases, by high end local and international companies. I understand your point and clients need to be re assured by agents and developers like myself. No properties will be marketed by us ,unless the paperwork is clean. If unsure on purchase, investors should ask for copy of existing title deeds and ask for further checking by independant lawyers in the country if necessary. This advice would be given when purchasing in other countries.
     
    Last edited by a moderator: Mar 20, 2011
  6. buca

    buca New Member

    Buying a Home?

    Hi,

    I'll be travelling to Albania in January and would love to research the property market.

    I was wondering what your thoughts are on the subject of buying a home, not an investment property? Basically, since I cannot afford to buy a house in my home town of Spain or in London, where we live now, but I still want to have a home somewhere, that I can call my own, I decided I would buy something in Tirana, as I loved it there and my husband is Albanian.

    However, my budget is quite low (£20,000max) and I am not so keen on a new development but rather a compfy old flat in the town centre.

    I have found it hard to find contact details of estate agents (only balkimo or albania-estates) or property lawyers. Would someone be able to forward some info for me?

    Any advice/help would be greatly appreciated.

    Many thanks!

    Buca
     
  7. Stingo

    Stingo New Member

    Hi Buca

    At Albania Estates we are concerned about the structure of old properties in Tirana as well as the assurances of title. With new developments we can be sure of the quality and title and wish to only promote these plus land to the foreign market. For older resale properties in Tirana you are best to speak to Balkimo who have an establised resale market. I understand you have their details and they would be happy to meet you in Jan.
    We feel that the capital growth (20%) will be at its very best on new constructions with established developers in Tirana. New property will work better for rental due to the finish and size of the properties now being built with young couples and students in mind.

    stingo
     
  8. Seanmc

    Seanmc New Member

    Hi -I am new to this site but find the commentary and advice excellent so thanks to all.

    I am interested in buying in Albania for medium term investment - something that interests me most is purchase of land [probably coastal] for future resale for development purposes. Is there much opportunity within this area ? Would there be any issue with land title ?

    Also I am intending to go to Tirana in late January to review sites around albania - are there any reputable agents which I could contact who could facilitate a review of the area ?

    Thanks,
    Sean
     
  9. Martinle

    Martinle New Member

    Hi Sean, I am trying to find time to visit Tirana at the end of January as well! I will be looking for off plan in Tirana and just getting a feeling of the place. I agree with the other posts regarding land banking, it would need to be done with extreme care!! I have had many years experience in the Bulgarian market and expect land purchase in Albania to be similar to Bulgaria ten years ago. As I understand it foreign investors cannot own land in Albania, so this would necessitate a company formation and possibly a Albanian partner?

    I have done some research on FDI etc, if you want a copy IM me and I will send you what I have

    Regards
    Martin
     
  10. Stingo

    Stingo New Member

    Hi Sean

    Albania holds many opportunities for the intrepid investor but like so many investments you should really look towards the mid to long term for your best return on your initial investment. We have a large selection of land in land and on the coast although land parcels tend to be large compared to others that you may see available in certain other countries nearby. Generally the minimum size is around 5000 m2 and with prices on the coast going from between 35 and 200 euros per m2, the price is fairly prohibitive to most other than the bigger developer or consortium.
    Local governments are very keen to promote business in Albania and getting planning permission is very easy within reason. Thankfully however there are strict guidelines as to the size of development in the various districts. Build costs are still low and we feel, at Albania Estate, that there is a good opportunity for developing and selling while the market is in its infancy and supply is still low in the most desirable locations.

    It is not necessary to start up a local company to buy property in Albania, unless you wish to use the land for a touristic development such as hotel etc.
    Corporate tax is however only 10% now and so you may feel this is advantageous. Nearly everyone that buys through us however buys as an individual.

    We would be happy to meet you in Tirana to show you land or other investment opportunites with "off plan", should you come over in January. We will be running the first property tour in February, to Albania, also if you were interested.

    Rgds
     
  11. Martinle

    Martinle New Member

    Hi stingo
    Hope that offer goes for me too? What are the roads from Tirana to the coast like in January / Febuary.
    If you can send me any infomation on Albania I would be most grateful.
    Regards
    Martin
     
  12. Stingo

    Stingo New Member

    Of Course, you and anybody else with an interest is most welcome.

    If anyone is interested in any information on Albania property investment or would like to join us in an organised property tour of Albania then please private message myself or go through our website at Albania Estate.

    It did snow in Tirana for the first time in about 8 years, last month and on the coast for the first time in 20 years but now the weather on the coast from Vlora and south is around 8 -10 degrees and the roads are just fine.
    The weather becomes mild on the coast from around mid March and can become hot from June. The infrastructure is improving all the time on the road from Tirana to Saranda via Vlora or Frer. This is making journey times quicker by the month.

    Rgds
     
  13. Why invest in Albania?

    We at Albania Acquisitions have researched the market there and believe that the key town for Capital Growth and expectant Rental Returns is Tirana.

    Why Tirana?
    1) Albania’s Capital & largest urban centre
    2) A leading example of successful structural change
    3) Location Location Location
    4) City of Universities
    5) Local & Foreign Companies’ in Tirana
    6) Entry Level Prices at just Euros 550 per m² - Rezidenca Ime Development. Whereas in Bucharest, you can expect to pay between Euros 1,600 - 2,400 per m²

    If you fancy a change of scenery this year, why not consider Saranda, the popular coastal resort that overlooks Corfu, Greece. Flights commence from Gatwick to Corfu on 28th March 2008 and with just a 10 minute hydrofoil journey across the Ionian Sea, you can be in your apartment, sipping a cool refreshing drink whilst soaking up the sun.

    Our Research points towards
    1) Changing Demographics / Positive Rental Potential
    2) Affordable Property Prices
    3) Accessibility to Europe
     
    Last edited by a moderator: Feb 7, 2008
  14. DSR Media

    DSR Media New Member

    JDmatt1:

    I think you are very disrespectful in your creating the impression that all agents are liars, when you say don't listen to agents that tell you prices will triple in the next three years.

    I work for overseas property agent David Stanley Redfern, and we would not lie to our clients about an areas growth potential as we intend to maintain our good reputation and this requires utmost honesty at all times.

    I strongly believe that property prices in some areas in Albania could, not triple but easily double in the next 4-5 years. Albania, like many Eastern European states are taking off because of their adriatic coastlines and proximity to established markets. The established markets give a good guide as to how the emerging markets will perform in the coming years.

    Tour operators and tourists are looking increasingly looking for places off the beaten track, that they haven't been to before and often where they can holiday the cheapest, the emerging markets of Eastern Europe tick all those boxes. Albania is also beggining to attract big business because of its central location and because the buinesses can be set up and run very cheaply. Business is the biggest advantage to the capital Tirana, and as business and tourism develops Albania's economy and the infrastructure is developed it will be attractive to yet more business. As the market and economy continues to grow it may also start to attract some of the major retail chains.

    As business develops in the capital, more and more Albanian's get jobs, possibly with substantially higher wages, either at the start or through promotion. This spreadng of afluence puts up living costs, wages and house prices follow.

    Like I said business is developing in the capital and growing tourism is making an impact on the coastal areas.

    Saranda is a great example, you can see the Greek island of Corfu out across Saranda bay, but property is a fraction of the price for a similar climate and coastline. Club MEd has just bought land beside Saranda, and as the infrasturcture develops it will begin to rival Greece as a holiday destination, as this growth into a popular tourism destination house prices in the area will grow rapidly. Growing tourism breathes life into an area, hotels, B&B's novelty shops, even small street stalls can make a healthy living again spreading afluence in the coastla areas upping living costs, wages and house prices.

    The very fact that Albania has leapt onto the global property investment scene will cause prices to rise, as they have previously had to be affordable only to the locals, their value now starts to climb to what they are worth to people with more money, in line with the rises that come from rising afluence in Albania's general population.
     
  15. mickthepropertyguru

    mickthepropertyguru New Member

    Albania will be number 1 soon but what about renovation properties?

    I agree its one of the best places at the moment to invest but really tired of hearing from property companies that new builds are the only way forward. This is purely for profit. Its far easier and less complicated for these companies to sell 250 units under one roof than 200 properties around the city and the profit levels are far far higher for the company. New builds have a fair degree of risk too. There is countless people who could attest to this especially in Bulgaria. Yes a far greater degree of research and scrutiny has to be done with resales but is this not all part and parcel of investing?

    Does anyone have a opinion on renovating properties in Tirane ? Mabey this would be an ideal spot to buy 3 or 4 properties that need a fair bit of work but in excellent locations. In 7 years i think these properties will have a far higher profit margin that the new builds that are going to be flooding in soon? i would love to hear any opinion or any critical responses? Is there somebody who has done this before in another city in the early stages ?
     
  16. jenifer

    jenifer New Member

    In my point of view that the growth would be at its very best on new development with in Tirana. The new assets will work better for rental due to the increasing couples and students.
     
  17. jenifer

    jenifer New Member

    In my point of view that the growth would be at its very best on new development with in Tirana. The new assets will work better for rental due to the increasing couples and students.
     
  18. mickthepropertyguru

    mickthepropertyguru New Member

    Off plan investment

    This is very true but you may find most investors here will not be buying to let. Its purely about Capital Appreciation. If you are a first time investor, there is also many issues that you should know. I'm not implying all agents are bad at all, but if you have empowered yourself with enough knowledge of the property industry then and only then is it safe to go on a Inspection Trip. Sometimes there is a black sheep in every flock and unfortunately they give the Industry a bad name. And before anyone asks about my loyalties. I am an small investor eager to learn and share views which are very relevant. I would be happy to give you examples of pitfalls that buyers can fall into.
     
  19. mickthepropertyguru

    mickthepropertyguru New Member

    I would like to give a couple of pointers especially to First time buyers which I feel is VERY relevant. My goal is to enlighten and not to offend.

    1)The most important thing about any investment is an EXIT Strategy. (getting your money out of the investment) Lets talk about your money

    2)Research is the key ingredient in any exit strategy

    3)Every city is divided into districts and areas. Find out what is the price per square metre for each part of the city.

    4)Its vital to get info on the reputation of developer you are interested in.
    Talk is cheap, if an agent tells you ...”O we have dealt with this developer for a long time and they are excellent” This means nothing...they should have signed documentation to back it up.
    They should have documentation on proven Rental Income. “You can expect 5% or 6% return...” means nothing if the agent can't prove it on paper which is difficult for agents to do but they should strive to prove it to you and also documentation on their fees. Some people buy properties and don't even know who the Developer is. Most Property companies are not the developer. Some may brand it as their own but have given the contract to another developer.
    Documentation is nothing unless you can take it home with you.

    5)Property Companies can get between 10% and 20% as a middle man on the price of the unit they are selling. People never ask “HOW MUCH DO YOU CHARGE IF I WANT TO SELL THE PROPERTY THROUGH YOU !!!!!” This can be up to 10 % again. Companies can make up to 25 – 30% or more from you on the price of the unit...............(I would prefer to keep this in my pocket.) There are no laws on overseas property companies to stop them getting such huge profit where you are buying in a country where you dont reside in and few laws to protect you. Your Money again.

    6)Even if a contract states you will be refunded if the developer goes bust......this cant be trusted.
    Only in France are you usually safe if this happens because other developers take it over and finish it and are funded to do so i believe. There is no other country in the world that pertects the buyer more, apart from the USA which gives a cooling off period after purchase when you can actually change your mind and get your money back within a time period. Every buyer can get caught in the heat of the moment and should be allowed 72 hours to cool off and rethink their position but sadly this isn't the case. Outgoings ,Your money !!!!! Don't rush decisions.

    7)Capital Gains TAX !!!!!!!!!! Even if its only 3% - 5% like Cape Verde you still have to pay the difference between that and the Capital Gains of the country you reside. Ie. Ireland CGT 20% . So you pay a little in Cape Verde but the rest to your own government
    Are there ways around it ?, no legal ones as far as i'm aware of. If an agent tells you “what the tax man doesn't know wont hurt him” This person is not looking after your best interest....only their commission. (The Irish Tax revenue is like a pissed off woman, she will have her vengeance. :) And thats if there is Dual Taxation! If there isnt Dual Taxation, that's another ball game! More of your money.

    8)What ongoing fees are there in keeping a built apartment i.e. Local Tax, Maintenance, Community fees, utilities, house and content insurance, etc (very important for coastal complexes as spa's , gymnasiums, grounds and especially golf courses cost more than you may think and it will increase nearly every year) What about rental management costs.? Some even charge you a yearly fee for the privilege of using them................Even more of your money.

    9)Furniture Pack: How much will it cost to kit out your place. Get an exact signed quote for a package before you sign on the dotted line. eg: If your told “It will only set you back 5 – 7 thousand ”........it will cost a hell of a lot more than that usually. Double or triple. Again signed documentation here is critical is showing exact prices. This has stung countless people.

    10)What happens if some owners don't pay their maintenance/community fees, (sometimes the other apartment owners have to cough up extra money to keep complex open) some terrible examples in Spain of complexes falling into disrepair. It has happened, it will happen again! More of your money.

    11) Beware of Company Credibility pitch. Some agents will give an incredible pitch of how good their company is, how good their rental management company is, how big they are, how many properties they have sold, how many regions they deal in and how easily they will sell your property when you wnat to sell again. This can be a smoke screen. After this pitch people fall into a false sense of ease. Talk is cheap..........they should have written signed evidence of proof of everything that they promise you. tell that to the people that were promise 5% -7 % rental expectations in Sunny Beach and that they will have no issue selling their property with them in the future.

    Would you believe I bought a place and knew none of the above. So off plan can be a great investment but do your homework.
    I have bought an off plan property before and definitely will again but be careful.
    Now honorable property companies can actually print this off an show it too your clients in that you cover all or most of the above pitfalls.
    Love everyone,
    trust few,
    paddle your own canoe.
     
  20. fiona1

    fiona1 New Member

    Firstly Mick, I just want to say that I think your advice is excellent. Too many people get caught up in the idea and what agents say.

    Secondly I believe off plan apartments have excellent potential in Albania. But of course, this is where agents can inflate prices (especially to foreigners), so what somebody thinks is a cheap property investment might actually be inflated, so due diligence is definitely recommended.

    In Tirana, for example, 500 Euros/sqm might be cheap in one area, but expensive in another. Even in the same area like Kashar, the southern part has off plan properties around 400-450 Euros/sqm, but along the Durres corridor the prices are more like 500 - 600 Euros/sqm.

    Yes it seems most investors understand that Albania is currently for capital appreciation, especially on the coast. But with the current prices (from 30,000 Euros), most investors arent desperate for a huge rental return- just yet ;)
     
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