Thanks to the regularity and affordability of budget flights throughout Eastern Europe and the relaxation of visa rules, jetting off for a holiday in the region has become increasingly easy – and popular. Eastern European countries are experiencing the largest tourist growth in Europe, with countries such as Montenegro, Romania and Croatia leading the way.

Consequently, the concept of buying a property in order to make money from letting it out has become a massive phenomenon. The vast majority of people who purchase overseas buy with the intention of holidaying there for four to six weeks of the year and renting it out for the remaining 46-odd weeks. As a UK resident you will have the benefit of being able to tap into the foreign market, as you will have an understanding of the needs and standards a foreign renter will expect and can market and furnish your home accordingly.

However; a word of warning. Many markets in Eastern Europe simply can’t generate the kind of yields investors have come to expect from France and Spain. For one thing, most Eastern Europe countries have very short peak/summer seasons due to the weather. Secondly, many of the tourist markets in the region are too undeveloped to fill beds, and those that can often have deals in place with travel agents, as tourism is predominantly organised by package holiday deals – this is especially the case in Bulgaria. While this will no doubt change, be aware that your purchase will be a long-term, rather than short-term investment, and it will take time to build up a rental portfolio.

Many people also fall into the trap of thinking that they can buy slightly above their price range as income generated from rentals will cover their repayments, but this is simply too risky a strategy. Only buy what you can afford to sustain and be aware that the majority of income from lets will go on maintenance costs, furnishing, cleaning, property management and general wear and tear, as well as any advertising you choose to do.

SHORT- OR LONG-TERM?

Whatever you decide to do, if you are going to be reliant on rental income in order to make your investment a stable one, then it is imperative you look at the future of the market. Talk to lettings agencies and travel agents and ask them where they think the best investments are to be made. Any planned increase in budget flights is a good sign that the market will be opening up to tourists, providing you with future demand for short-term lettings.

There are many locations in Eastern Europe – generally the capital cities or larger towns – where a healthy foreign student and business population will mean long-term rentals are feasible. While this will severely limit the time you can spend in your home, in the long run, it means the property is being looked after and you have a healthy and regular income generated from it. The Baltic States are an excellent example of a market where massive foreign direct investment and the growth of multinationals in the region is resulting in a growing foreign workforce, all of whom are looking for accommodation.

THE IMPORTANCE OF LOCATION

You may think it is a cliché, but that old adage again ‘location, location, location’ will never wear thin in terms of choosing a property with the intention of letting. If you buy somewhere too far from the airport, you’re unlikely to secure many lets; if you buy in ‘no-man’s land’ too far from the coast, ski resorts or major cities, then the likelihood is that very few people will show an interest. Buying a home to let has to be a business decision and, as such, you need to think very carefully about the location and put your own tastes to one side.

The first thing to do is to ensure that the area you are looking to buy in is not saturated with rentals, as this minimises your chances of securing a healthy number of bookings. This doesn’t mean you should pick an area which is virtually unknown–the best bet is to look at the newly-developing areas where budget flights are fairly regular.

The next thing to do is get to know the area and see what kind of amenities and infrastructure are in place. The kind of amenities you are looking for obviously depends on whether you are trying to attract short-or long-term rents. Most holiday-makers will either want the property to have a pool and large garden for barbeques, or to be near the beach, so are prepared to pay a little extra for a premium location. Proximity to the airport is a must, as most people are not prepared to travel for more than 90 minutes to reach their rental accommodation.

Long-term renters will want to be close to supermarkets, their office and possibly schools, if renting with their family. City centre apartments, close to the transport network, clubs, bars and restaurants are the prime locations.

Today it is even possible to buy newly-built property with guaranteed rental income for a fixed number of years. While this is good if it’s true, be wary of taking a developer at their word and make sure you get proof and written confirmation before entering into a purchase.

SETTING A PRICE

Firstly, you must think about whether you intend to make a living out of renting property, or if you are just trying to cover your costs. For instance, you will be able to generate more income from the ski resorts of Bulgaria than you would for a coastal house in Montenegro. Similarly, if you are letting long term, you will be making less per week, but you’ll have a guaranteed income over a longer period.

The best thing to do is find out how much other properties of a similar size and in the same area are charging, allowing you to estimate the kind of income you can expect to generate. This is important so that you don’t price yourself out of the market, and by possibly undercutting the competition, you could end up securing more rentals and thus making more in the long run.

FURNISHING THE PROPERTY

Regardless of where you buy and what the area can offer, if you don’t furnish your property properly then you are unlikely to secure large numbers of bookings, and the prospect of re-bookings will be very low. This is just as important with long-term rentals, especially as you are probably going to be looking at renting to single business people or young couples, who will want a modern look and feel from their home.

The first rule for short-term rentals is to make sure everything is clean and tidy and in working order. Ensure that all facilities, such as a television, fridge, freezer and cooker are in place and that there is fresh linen and towels–no one wants to have to bring these in their luggage. The standard of your furnishings generally dictates how much you can charge, but be prepared for breakages and wear and tear–furniture should be hard-wearing and easy to clean. Bedrooms should have comfortable beds and space for clothes to be hung, and providing a sofa bed in the living room will also allow you to up the rent charged, as you can provide accommodation for more people.

Added extras such as a washing machine or tumble dryer are always handy and it’s recommended that air conditioning is available for the hot summer months–and heating for the winter! If you can, put together an information pack on the area with details of things to do, attractions to see and the best places for food and drink. Providing dry supplies such as tea and coffee will also help make your guests feel more at home.