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Post by Madgolfer on Oct 16, 2009 9:09:52 GMT 1
Hi Zvekov,
Your original question was;
In real estate investments in this country, after paying all the taxes, the excessive paperwork, the odd local pricings of services, can anyone recount any reasonable experiences in any part of the croatian coast where they've made reasonable money cash on cash also considering time spent and have made a killing in real estate?.
So perhaps you should not relate to my experiences which are primarily "inland" real estate sales, central and northern Croatia in particular.
Perhaps you could also define your interpretation of the word "killing" in percentage terms?
Excluding professional investors, most of our clients have been buying with a view to a medium and longer term investments, rather than a quick turnaround, say inside 12 months. Therefore their expectation of profit is based somewhat differently.
I am the first to admit my limited knowledge of the coastal real estate market and I do appreciate how hard it can be to find realistic prices, not just for the initial asset purchase, but also for the renovation costs and so on.
The completion of all and any necessary "paperwork" related to real estate purchase and sales, while sometimes tedious, is much the same throughout Croatia and easy enough to complete if you know what you are doing or have good help. I cannot imagine it being very much different elsewhere in the world, so this is something to account for in any transaction and deducted from profit accordingly should you so wish. There is going to be some "leg work" to do where ever you buy or sell.
If you are a professional investor looking to make a quick buck, then perhaps the Croatian coastal real estate market is not your best option.
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Post by 3lions on Oct 16, 2009 9:31:48 GMT 1
its all over because at one point you could buy land for a bag of potatoes, an old tractor and a zastava, now everyone remembers this and believes that they are automatically going to be ripped off, and as someone says, Roman Abramavich is suddenly going to turn up on their doorstep and want a summer let. not so much over inflated prices, but an over inflated national psyche.
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Post by happy on Oct 16, 2009 9:44:15 GMT 1
Roman Abramavich is suddenly going to turn up on their doorstep and want a summer let. Surely, if it is reported in Slobodna Dalmacija, it must be true.
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Post by francis on Oct 16, 2009 14:15:32 GMT 1
after buying over four years ago, the profit is the interest, legally you can charge you company on the money it own you when you every do sell, it good when you think what you would be getting on savings at home, as you our the bank of the company, you can charge the bank rate, here around 6.5% even more
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Post by marie on Oct 16, 2009 14:47:51 GMT 1
I find it a bit shifty when someone actively wants to make "a killing in real estate" in a very short space of time - Croatia or elsewhere. Making a profit is another thing.
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Post by crojoe on Oct 16, 2009 14:58:45 GMT 1
yea, I think its against the law to "make a killing". hehe.
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Post by zvekov on Oct 16, 2009 15:05:18 GMT 1
looks like all evidence points to...a lot of accidental long term investors.... Maybe Croatia reached its peak in 2004 in growth terms. and unless as a large player you had sufficient funds to buy prime land, construct and actually manage to find a strategic buyer... No chance... I thin k most players that bought small parcels (< 5000 sqm), ruins, apartments and did whatever they needed to do, will be long term investors for a reasonable while. I wonder what an equivalent return would have been in London or just investing in Croatian shares
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Post by marie on Oct 16, 2009 15:09:47 GMT 1
It is illegal to make a killing? What?
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Post by crojoe on Oct 16, 2009 15:18:12 GMT 1
One major dampening factor in the Croatian housing market, making a profit has been the high taxes, length of red tape and the major problems faces by many foreigners with resident visa's. It’s been up in the air so much that it’s no wonder people stay away. So for profits, would only work if you owned your property, had plenty of renters or a buyer prior recession. They recently held the first property auction in Croatia and nothing was bought or sold, and they only had something like 11 possible buyers showed up (all commented how expensive properties where and didn't buy anything). It’s a shame I wasn’t invited, as I would have sold my rented accommodation a few times. Hehe.
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Post by Madgolfer on Oct 16, 2009 18:26:35 GMT 1
looks like all evidence points to...a lot of accidental long term investors....
I would guess that you are probably a professional investor and therefore need to earn a living as such, but not everyone is looking to "make a killing" overnight Zvekov.
Many of us are in business for the longer term and relate our profits accordingly.
That frame of mind and attitude is partly what caused the recent recession in the first place.
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Post by zvekov on Oct 17, 2009 1:04:54 GMT 1
i see the real estate market on the coast as anything but a gradual smooth growth market. I think the reality is a lot of 'accidental long term investors', eventually getting out when you got the next crazy growth spurt 10 years down the line. Hardly a blueprint for gradual growth. Gradual growth will mean you buy, you hold, if it is an apartment rent (and have equal renting rights- foreigner or local, to both tourists and locals) and sell, maybe 6 - 10 years later, but if in the event of an emergency you can sell say 3 years later, which in the case here on the coast is definitely not. Unless you are giving it away. A lot of the properties are on agents books for years and at the current prices, it is not a real market as the lack of liquidity means you can't even fairly price a 50 sqm apartment. You have to wonder when people celebrate on achieving a sale.
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Post by Madgolfer on Oct 20, 2009 16:44:08 GMT 1
Zvekov, you asked for examples;
Sept; Client "X" bought property in Dec 08 for €18'000 (inc costs), spent €28'000 on renovations and sold in Sept 09 for €66'500. Profit of €20'500 in 9 months.
Oct; Client "Y" bought property Sept 08 for €22'000 (inc costs) spent €20'000 on renovations and sold in July 09 for €72'000. Profit of €30'000 in 10 months.
Oct; Client "Z" bought property in Feb 09 for €8750, did nothing with it and sold it last week for €14'000. Profit of €5250 in 8 months.
So it can be done inside a reasonable period of time.
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Post by zvekov on Oct 20, 2009 19:15:41 GMT 1
very impressive.
I will assume it is not on the coast.. But really!! Back to the real world
client "Z" - Conveyancing round trip. Buy side and sell side. I'll say north of EUR1K or maybe i guess in these parts of croatia people just do it themselves and don't use lawyers. Otherwise i'll say the legal fees touch almost 20% of profits, then there's another 35% to go to tax man. Or maybe holding structure was a company, then 20%, plus fees of accountant...
Hardly anything to get excited. Unless the buy price included the legal costs.
Client X and Y, they seem interesting figures, but will be interesting to see what time they input into these projects to finish the renovations. Then it will be also interesting to see how we value that time.
I call this a lot of spin. Please lets have some proper examples before this yarn relieves someone unsuspecting of their hard earned savings.
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Post by happy on Oct 20, 2009 19:48:32 GMT 1
My friend told me that.
August 2009. Man purchased ruin for 10,000 Euro Did nothing with it.
September 2009. Man sold ruin to rich Russian for 1,000,000 Euro.
Profit 990,000 Euro
I said I don't believe it. He said it was true. He said it was reported in Slobodna Dalmacija. It must be true then!
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Post by crojoe on Oct 20, 2009 20:06:01 GMT 1
I bet the tax man was after that 1 million euro man after his moment of fame in the newspaper. All I can say is that Russian was an idiot, to much money to burn or vodka. At least 1 Croatian accomplished every Croatians dream of becoming a millionaire over night. By chance was that the guy that was spotted crossing the Bosnian border with a suitcase?
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