You cannot buy coastal property in Western Europe for €60,000–70,000. That price range disappeared years ago. Bulgaria still offers such opportunities. You can rent out the property, sell it after the price goes up, or combine both strategies. The real question is where the profit comes from, how much remains after all expenses, and which taxes reduce your income when you sell.
The Bulgarian market offers several investment strategies. Some buyers purchase property and rent it out, either long term or through Airbnb. Others buy during construction and sell after the building receives Act 16. Each strategy requires its own calculations.
Long-Term Rental or Airbnb: How to Invest in Real Estate and Choose the Right Format
Most buyers of resort property ask the same question: should they rent the apartment by the day or for a full year? At first glance, short-term rental looks more profitable. During summer, an apartment in Varna or Nessebar can bring in €70–100 per night. The gross income looks attractive. However, management costs, utility bills, and taxes reduce that amount.
A one-bedroom apartment in a good district of Varna rents for €550–700 per month on a long-term contract. The income stays stable. The owner does not deal with new guests every few days. Annual rental income reaches €6,600–8,400. The tenant pays utility bills. The apartment wears out at a slower pace, and management takes little time. If the property costs €65,000, the gross rental yield reaches about 10–12% per year before taxes and maintenance costs.
Short-term rental during the high season, from June through August, with occupancy of 70–75 nights brings in €5,000–7,500 during summer alone. The off-season adds another €1,500–2,500 if the property stands in a city with year-round tourism. Total gross income reaches €7,000–10,000 per year. Gross rental yield ranges from 10% to 14%.
However, the owner pays a property management company 20–30% of the revenue if they do not live nearby. Furniture wears out faster. Every guest requires cleaning. The owner also pays utility bills during vacant periods. After all deductions, the real net return usually reaches 7–9%, not 14%.
The table below compares both rental formats.
| Parameter | Long-Term Rental | Short-Term Rental |
|---|---|---|
| Gross rental yield | 6–8% | 10–14% |
| Net rental yield (estimated) | 4–6% | 6–9% |
| Income stability | High | Medium, seasonal |
| Management costs | Low | High |
| Property wear | Moderate | Higher |
| Local presence or management company | No | Recommended |
You cannot rent out an apartment through Airbnb or Booking without registration. First, you must complete the local categorization procedure and receive a registration number for the property. Since May 2026, Airbnb and Booking have checked this number automatically. If the listing has no valid registration number, the platform removes it. The procedure is simple but takes several weeks. Owners complete it before they publish the first listing.
Most investors do not choose a rental format based only on expected profit. Time also matters. The owner should decide how much effort they want to invest in managing the property. Short-term rental works like a business. It requires constant management. Long-term rental offers a passive option with a steady income stream.
Buying During Construction: A Way to Grow Capital
The strategy of buying low and selling high works in Bulgaria’s primary market through the price gap between property under construction and a finished apartment. Developers sell units at the early stages with a 10–20% discount. They use this approach to attract funding before construction ends.
An apartment that costs €50,000 during excavation often reaches €58,000–65,000 by the time the building receives Act 16. Construction usually takes 18–36 months. A profit of 15–25% over that period looks attractive. However, the capital does not generate rental income before completion.
The main risk comes from delays. Developers often postpone completion by 6–12 months. This situation does not count as force majeure. It remains common in the Bulgarian property market. An investor who plans to sell after two years may wait three years instead. As a result, the annual return drops.
An analysis of listings on homio.bg shows a real price gap between properties under construction and completed homes in Varna and Burgas. At the same time, buyers should always check the actual discount and the developer’s reputation before making a decision.
How to Make Money in Real Estate Transactions and Calculate ROI
Many investors focus only on rental income. However, ROI shows the real efficiency of the purchase. The formula is simple. Divide the annual net income by the total investment and multiply the result by 100. The problem does not lie in the formula. Many buyers leave out part of the costs.
Take a real example. An apartment in Varna costs €65,000. Besides the purchase price, the buyer pays notary fees, the state fee, and registration costs. These expenses add about 3–4%, or around €2,200. Furniture and light renovation before renting cost another €4,000. Total investment reaches €71,200.
The apartment brings in €420 per month, or €5,040 per year. Annual expenses for the maintenance fee, small repairs, and utilities during vacant periods reach about €900. Net income equals €4,140. ROI = (€4,140 ÷ €71,200) × 100% ≈ 5.8% per year.
With short-term rental, gross income may reach €8,500. A management company charges 25%, or €2,125. Utilities and maintenance cost another €600. Net income reaches €5,775. ROI = (€5,775 ÷ €71,200) × 100% ≈ 8.1% per year.
Long-term rental brings a return that is 2.3 percentage points lower. That difference reflects the price of minimal involvement in property management.
The homio.bg platform makes it easy to filter properties by district and budget. Buyers often use it to compare offers before they negotiate with a developer.
What Every Investor Should Know About Taxes When Reselling Property
Several factors affect the amount of tax you pay. The source of income matters. The holding period also matters. The owner of the property matters as well. It is better to include these costs in your calculations before you buy.
If the owner rents out an apartment, the tax rate is 10%. The government automatically applies a standard expense deduction of 10%. As a result, the actual tax burden comes to about 9% of the gross rental income. Owners file the tax return once a year, before April 30.
Bulgaria has double taxation agreements with many countries. These agreements allow investors to credit the tax they pay in Bulgaria against their tax liability in their country of tax residence. Check the rules in advance because each agreement has its own terms.
When the owner sells a property, the tax depends on the holding period and the number of properties they own.
| Scenario | Capital Gains Tax |
|---|---|
| Individual owner, holds the property for less than 3 years, first or second property | 10% of the price difference |
| Individual owner, holds the property for more than 3 years, first or second property | Tax exempt |
| Individual owner, third property and each additional property | 10%, regardless of the holding period |
| Legal entity | 10% corporate income tax |
The three-year holding period gives investors a real tax advantage if they do not plan to sell right away. Wait three years, and you pay no capital gains tax at all. This rule applies only to the first two properties. From the third property onward, the owner pays tax in every case.
The sale also brings additional transaction costs. Notary fees and the municipal transfer tax usually take another 2–3% of the sale price. If an agent handles the sale, the commission adds another 2–3%. In total, 4–6% of the property value disappears before you calculate the profit. Investors should include these costs in the ROI calculation from the start. Otherwise, the figures will show a higher return than the investment will actually deliver.
Many investors miss one important detail. The tax office calculates the tax base from the price in the notarial deed, not from the market value. If the documents show a lower purchase price than the buyer actually paid, the tax office will calculate capital gains from a larger difference at the time of sale. The money saved at the beginning may turn into higher tax costs later.
Which Strategy Fits Different Types of Investors
The Bulgarian property market does not offer one solution for everyone. Even similar properties can produce different results. Much depends on how much time the investor plans to spend managing the property.
Several investment strategies work well, and each follows its own logic.
- Minimal involvement. Long-term rental in a city with stable demand, such as Varna, Burgas, or Plovdiv. This option brings a steady income, fewer tenant changes, and little time spent on management. The return stays lower, but the income remains predictable.
- Active involvement. Short-term rental through Airbnb or Booking in a resort area. This strategy requires either the owner’s presence or a trusted management company. With good organization, it often brings returns that exceed long-term rental by 2–4 percentage points.
- A two- to three-year horizon and patience. Buy during the excavation stage from a reliable developer and sell after the building receives Act 16. The capital stays tied up during construction, and the property produces no rental income. In return, the investor may earn 15–25% over the construction period.
- A combined approach. Rent out the property for several years and then sell after the price increases. The investor earns rental income first and then benefits from the property’s higher market value at the time of sale.
The strategy shapes every other decision. It affects the location, the type of transaction, the tax structure, and the investment horizon. Buying property in Bulgaria does not require a large amount of starting capital. The final result depends on one thing. The investor should define the strategy before making the purchase.
