Bulgaria's property market has been on the rise over the last few years, with real estate prices rising by 30.6 per cent in 2007, but their growth is expected to continue at a more moderate pace this year, Bulgarian property portal britishdevelopments.com said on March 3.

The region has a significant potential, particularly in commercial and industrial areas sector, while the capital Sofia was rapidly growing and offered favourable investment opportunities.

Many people were eyeing Bulgaria for vacation investments due to its natural landscape, hiking and bike treks, the coastline along the Black Sea, the beaches, historical attractions, temperate climate and skiing opportunities.

In its guide to buying property in Bulgaria, the portal warned about the fact that buyers paid the bulk of transaction costs, which can reach 25 per cent of the total purchase price, and sometimes even more.

Bulgarian properties in rural areas offered little rental income, if any, and were better investments for individuals who seek a retirement house. Typically, these properties sell at tempting prices, it said.

Other shrewd investments could be struck in mineral spa regions or in some of the historic cities, like Veliko Turnovo. Currently, non-residents cannot buy land in Bulgaria, but they will be allowed to do so, as well as inherit it, starting from 2014.

If foreigners wish to purchase land before 2014, they can do so by setting up a Bulgarian limited company, which takes between one to six weeks and can be done by an independent lawyer. It is also important that they hire a qualified accountant to oversee company affairs, British Developments – UK advised.