Albania Property
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Investing in Albania property is the latest, and probably last, opportunity to really make the most of an emerging market in the former Eastern Bloc, and like many before it it’s certainly becoming a popular choice for investors.

So why is Albania property becoming such a popular investment?

As we’ve seen with several other former Eastern bloc countries that’ve been accepted into the EU, their popularity has soared virtually overnight. Albania will be joining the EU in 2014 and further stability has been guaranteed with the country’s membership into NATO this year.

What this means is that investors are already pouring millions of Euros into Albania and the economy is beginning to rise.

As with many of its predecessors, the main two opportunities for investment in Albania property are on the coast and in the cities. But, it shouldn’t be assumed that these two markets are one and the same, as, on the contrary, they are very different and hence I’m going to share the pros and cons of both of them.

The pros and cons

A big advantage with Albania’s coast is the size of it. A coastline of over 225 miles (362km) which is relatively unspoilt and features natural beauty and great beaches, which means the potential for a tourism boom here is amazing.

Coastal developments are popping up here, there and everywhere and more and more apartments are being sold off-plan.

This all sounds great in principal, but there’s far more that needs to be considered before making a commitment.

First of all it's the coastal infrastructure. And let me tell you this is currently pretty poor.

Some improvements are already taking place, but you can bet that the new apartment complexes are going to be built far quicker than the roads which link them. Buyers are going to want to see facilities and services too, which are currently lacking (at least to Western European standards).

So should you invest in Albania property on the coast?

I would say probably not – not at this stage anyway. My advice would be to wait until the economy catches up a bit as this is when more Albanians will be in a position to afford these properties. Currently, this market is being driven only by foreign investment.

The pros and cons of investing in the city

If you want to invest in Albania property, the capital city, Tirana, gives you the best opportunities right now. You can expect rental yields of around 6%, plus a whole host of other advantages – a small investment (properties are around €550 per square metre), no VAT or transfer taxes to pay and no capital gains tax!

But there is still a certain amount of risk involved here too, especially for short term investments…

The main buyers here will be Albanians, but as this is still a newly expanding economy, the idea of mortgages hasn’t quite taken off yet meaning you won’t have a huge domestic market to sell to.

But, if you’re looking for a longer term investment, this could be it. First you’ll benefit from good monthly rentals and second you’ll benefit from strong capital growth, sometimes up to 30% on new builds. Even the average of 15% capital growth is excellent.

So to summarise, investors looking for Albania real estate for short term investments will be taking the biggest risks, but those happy to stay in for perhaps a couple of years should find their investment really pays off. The cities present the best opportunities, but coastal areas too could also pay off if the infrastructures are improved.

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