A huge loan designated to real estate Croatia is ahead, and coming from The World Bank Group. For the ones who don’t know The World Bank Group, it is nothing more nothing less than the world’s largest sources of funding and knowledge for developing countries. Their intention and commitment is to reduce poverty, increase shared prosperity, and promote sustainable development. And the Country now on their table is Croatia.
19.7 million euros on its way to Croatia
An incredible amount of 19.7 million euros to develop, ease and improve the Administration System Project. The advance is clearly on the days of waiting at Land Registry Offices that decreased by 75% from 46 to 12 days, for mortgages and property transactions, and also on the Cadasters Offices, decreasing by around 33% from 30 to only 8 days.
But it has been coming this way since 2016
Long ago in November 2016, a system called Joint Information System was implemented, it is easy, completely accesible and modern, so people can register online with their personal details, instead of the going through the painful experience of having to go to a public office.
With a very extended coast comes a large amount of Croatian islands. 1,800 kilometres of coastline in the entire country and nearly a third of this coast, including islands and islets, is Istrian!
The location of your villa in Marčana is central, giving you a favourable position you to explore the surrounding paradises.
Let’s start near
The closest island and National Park to your luscious investment property is called Brijuni and it is formed by 14 islands and islets.
According to the Istrian legend, God created Istria as an extension of Heaven. The devil then, out of jealousy, scattered stones around the peninsula. Angels then gathered the pieces of Heaven remaining among the scattered rocks and protected them by the sea waves. And created Brijuni.
The island was owned by an Austrian who had the intention of turning it into a resort. The eccentric taste, brought some exotic fauna and flora to Croatia.
In the early 80’s the Island was considered a National Park. Nowadays, everyone can easily reach this piece of heaven by ferry. To get from your villa to this beauty, you can drive towards to Fažana port, only 25 minutes away, and catch a ferry from the port to the island. After that, all you need to do is enjoy your day!
Planning and building an investment property in Croatia, or any other kind of project, requires good management and processes. At Candy Brick we researched and planned the project meticulously, developed solid processes, and selected very well our team. In this article we are going to present these key elements to you.
Planning and Execution
Think of a building, there are foundations and structures underneath the superficial layers of paint. Even if you can’t see them, for example the bricks, they are extremely important during the construction and ensuring the building remains stable.
Within a project team, it works the same way. Even though you might not be able to see or hear some team members, they are still fundamental to the successful project execution. It is therefore important that all team members are competent and synchronised.
What is the status of the current industry and market? This is an aspect you should definitely consider. You don’t want to make the mistake of starting in an industry that is already over-saturated. And if you do, then make sure you innovate in this industry.
We started our investment research based on the growth of real estate market in Croatia. Here we noticed increasing rents mixed with affordable property prices, and low taxes and costs compared to other countries. Which made the idea of purchasing an existent investment property in Croatia and reselling it, an appealing investment.
Know the Place
Do extensive research of the area your project is based, and adapt your research to the project needs. If your project is an investment property in Croatia, then location is key for an excellent return on investment.
If the region has abundant natural resources, take advantage of it, innovate and implement it in your project. Croatia’s 300 sunny days a year gave us the opportunity to innovate our villas by putting solar panels on them. This makes them self sufficient and increases the value of your investment property in Croatia.
Deni Tomisic, our geodesist at Candy Brick, gave us plenty of local advice that was crucial at the early stage of the project. His expertise and knowledge was able to point out fundamental aspects missing from some sites. Such as, no electricity or water and no possibility for connecting them, no usage permits, chemicals in the ground, low quality materials, and even a pending mortgage on a house.
After more in depth research on the local searching tool, http://www.katastar.hr/, more legal problems were found in relation to the sites. Purchasing terrains with issues can be a nightmare in many ways, making you spend more to fix them. If this step is missed then the whole project can fall apart.
The selection starts with defining characteristics that every member of the team must have. It is important all team members share the same fundamental characteristics in order for the group to be synchronised.
When your in a foreign country it can be hard at first to identify your desired characteristics in people. But a local references and advice can help you hugely.
At Candy Brick we choose people who are honest, loyal, driven to make the project go forward, and have a will to evolve.
From the Geodesist, responsible for selecting good and suitable terrain, and taking the right measurements to be used for later stages of the project.
To the architect that has to understand the intention of the client’s project, translating the needs into a drawing. And then has to clearly specify the materials to be used, the precise measurements, and the instructions about their drawing.
To the engineering supervisor, responsible for checking all the stages of the construction, disapproving any step that is not correct, and having the initiative to correct any mistakes.
And the Project manager responsible for controlling the project quality, budget and timing. He does this by checking everyday the construction progress, negotiating with suppliers in order to get better materials for better prices, and working on behalf of the company and not himself.
The choice of a good team of builders is also essential. Many mistakes can be done when constructing if the builders are not experienced and competent. And the fixing of these mistakes can be costly and can slow down the project if the wrong person is chosen. In Croatia there is a scarcity of workers and it can be quite difficult to find honest and qualified workers without the help of local advice.
Importantly, None of this can happen if your not legally allowed to. It is important therefore to have full legal understanding on your team, and a person who is familiar with law, contracts, rules. And not just for one country, but internationally, as laws can change from country to country.
Finally, we working internationally, communication becomes vital. It is crucial to have perfect translators in the team to avoid any error through miscommunication.
Talking about communication, marketing is extremely important for any company and team. Having a really good team and product is essential, but without really good marketing people will never get to hear about them or their achievements.
The sales person also has to understand fully the product and the companies values, and has to be able to transfer those values to the client. It is fundamental having a person who creates a connection with the client.
The administration is key to keep the internal engines of the company running smoothly, initiative and communication skills are necessary for a good administrator.
The accountant’s role may consist of primarily financial data collection, entry and report generation. The accounting structure of a company is an essential component to business operations. It is therefore essential to have an accountant that is honest and does not misrepresent the firm.
The External Team
Beyond your core team, there is also the external team to consider and the same selection process should apply for them. These are your partners and collaborators. Let’s compare them to other external factors in a construction project, such as the weather.
You have everything needed to start your construction project, like materials and constructors, but then it rains and you can’t start building. This is external factor interference.
With your partners and collaborators, it is the same and they can equally influence the progress of your project. The only difference is you can actually choose your partners and collaborators. You can’t choose the weather.
A legal partnership is a contractual relationship involving close cooperation between parties having specified and joint rights and responsibilities. Each party has an equal share of the risk as well as the reward.
A collaboration involves cooperation, parties are not necessarily bound by a contract. This is a relationship, but it is usually less formal than a legal partnership. A good collaboration can only exist when several people pool their common interests, assets and professional skills for a joint project. Importantly, organisations don’t collaborate – people collaborate.
It is better to chose partners and collaborators that are aligned with the project and will respect your goals.
For building investment property in Croatia, we chose partners and collaborators that are available, precise and responsive.
Good planning is fundamental to strategise and reach your goal
We hope that the tips given on this article help your planning and researching process, either if you are starting or already have an on going project.
Your Candy Brick investment villa is not only a luscious and high quality property but it is also self-sufficient
Considering that Croatia has around 300 sunny days per year, the potential for solar energy generation here is massive. That’s why your Candy Brick villa comes pre-installed with photovoltaics and solar thermal water heating. So your villa will generate enough energy to cover it’s electricity need.
You can classify the types of solar energy in two systems:
- Photovoltaic (PV)
- Solar thermal
PV technologies produce electricity directly from sunlight by converting solar energy into electricity. Many PV cells are linked together to make up a PV solar panel. Instead, solar thermal technologies use the solar energy to produce heat. Electricity is then generated from the heat collected.
Both systems generate direct current (DC) energy and then convert it to usable alternating current (AC) energy with the help of a power inverter. AC energy then flows through the home’s electricity panel, distributing energy accordingly.
What will these system supply electricity to?
Well, apart from providing the electricity to charge your phone, laptop, or maybe even your Rimac Concept One electric car. The solar energy systems on your investment villa will also provide the heating for your water. As a result the underlay of pipes of water placed below the flooring will provide you with spectacular underfloor heating.
These systems will also supply energy to other applications implemented in your investment villa:
- Heating and cooling for the swimming pool;
- Air conditioning for the whole property;
- Hot water for showers and general use;
Zero electricity bills maximise even more the financial return of your investment villa
The cost of electricity bills coming from old and polluting sources can be quite a burden on the pocket, as well as for the environment. Opting for an innovative and clean way to generate energy is the only way to reduce or even extinguish this cost completely.
So, thanks to these innovative systems producing enough energy for your investment villa to be completely self-sufficient, you will get the best return on your investment.
Can this get any better? Yes, it can!
Any excess electricity your solar systems produce that is not used, can be sold back to the grid to make you an extra income. Consider, in particular, the times when you will not be enjoying your investment villa or it is not rented out to guest. It will be generating you an extra income. This could be between €3-4 a day! In the future, your income could increase up to 10x should the government reintroduce feed-in-tariffs
Why is the choice of the terrain important for your villa in Croatia?
The location and ground dictates how the architecture and the project of your villa in Croatia will take shape. Your project can suffer if the choice of the terrain is poor, affecting the project’s plan and vision.
Location and terrain
The region of Marcana in Istria is constantly increasing in tourism, which is extremely beneficial for your rental income.
Some of terrains on which Candy Brick villas are being built, have a very interesting and favourable anatomy for the construction of a modern and unique villa in Croatia.
Candy Brick construction keeps showing great progress, and in only a month. As a result, each house is visibly progressed and the structure of three villas is near to be finished.
For your villa in Croatia choose Candy Brick who uses right materials.
When you invest in a property, maybe the first thought is financial return generated by an income.
But what might not come to your mind straight away, and is also extremely important, is the quality of materials that will ensure durability.
As a result of this durability, when deciding to monetise your villa in Croatia, your property will still be in exceptional conditions.
The materials also impact the performance of your property.
For example, if the works are done with poor quality materials, the heating systems will be affected making them not as efficient as they should be, resulting in more consumption.
Candy Brick not only builds high quality structure, but also implements high performance, low consumption and sustainable heating systems.
For that reason trucks arrive constantly in Matelici, filled with wood, insulation, tiles and concrete of the best quality for your villa in Croatia.
Croatia has a variety of wood eating insects that could damage your foundations, and that is why Candy Brick takes all the precautions, focusing on high quality and long term durability.
Every wood used on your villa in Croatia, is treated with special products against insects. Those products must be applied using high pressured air, making sure it covers and penetrates every wood vein and wholes.
The ground concrete slab of all properties in Matelici are completed. You can find more information about the concrete and how the weather can affect it on the link below.
The very first property you see when entering the terrain in Matelici, is property number 1
First of all, the anatomy of the first house is divided by 2 floors, ground and first.
Due to the terrain, the ground floor is divided by two levels. Lower, having the living room and kitchen and the upper having 2 bedrooms with bathrooms and storage room.
The walls for the lower ground floor and upper are completed. Windows and wholes are placed and, the next step is reinforcing the frames and passages with concrete slabs.
The floor can receives two different types of insulation:
- Hydro (bitumenized paper) prevents the passage of steam from the ground.
- Thermal, stops the water to pass and reach the concrete slab and allows any steam to evaporate, this kind of insulation also prevents noise propagation.
- Around the floor by the walls, 1cm of stiropor prevents contact between tiles and walls, this is called floating floors.
As a result the more layers of insulation materials the floor receives, the less it propagates the noise.
Heat energy is lost from buildings through their roofs, windows, walls, floors and through gaps, if the insulation is not made properly.
Having heating systems, is not enough if the insulation is done wrong.
Candy Brick foundations for the chimney on the second and first house are in place. Next step is building the first floor concrete slab and progress with the construction of the master bedroom.
Property number 2
The anatomy of the second house is similar to the previous one (lower and upper) with the similar characteristics of the first one.
Construction is progressing to the first floor leading to the top concrete slab where the master bedroom is. The master bedroom of your Candy Brick villa has a really spacious L shape terrace.
Last but definitely not least, there is house number 3
The anatomy of this property is a little particular, consequently, this property has 5 different roof levels. The three concrete slabs are completed and the roofing process already started on the lower roof.
Candy Brick is already making the next steps and contacting water and electricity companies, in order to move forward from the structure, to the next stage of the villas construction.
Candy Brick is already making the next steps and contacting water and electricity companies, in order to move forward from the structure, to the next stage of the villas construction.
Buying property in Croatia? OK, but first
If you own a holiday villa in Istria Croatia, you can rent it out to tourists (getting the bookings a year in advance!). Giving you the possibility to make a profit by selling the villa in 10-15 years, when the prices in Croatia will go up.
The problem is that when you start the procedure of buying a property in Croatia and start searching for homes for sale… you must also start dealing with sellers.
No matter if you are wealthy and respected in your home town. If you don’t have determination to analyse some aspects of the property before the purchase, the sellers will think that you are…naive. With money, but still, naive.
And that is a problem for you.
The seller’s interest is different from your interest. the sooner you are aware of it the better.
Conflict of interest between you and a no-name seller
When you are buying property in Croatia, you need to know that seller’s goal isn’t to help you and consider your concerns as an investor.
They just want your money in their bank account and never see you again.
The sellers are often no-name people, without having a brand and reputation they care about.
And what hurts more, a public opinion that the seller made a terrible job, that everyone can see, or a letter from a lawyer that only the seller and you know about?
Public shame hurts much more and motives people to make a solid job.
I’m not trying to say that you need to get a branded villa immediately.
You just need to get more information before the purchase.
Keep on reading to find out what to check, get informed and show everyone that you are not a naive foreign investor.
First step when buying property in Croatia, online research
Read and analyse real estate portals and its ads in Croatia, such as Njuškalo, Rightmove Croatia, Immobilienscout24, Immowelt, Place in the Sun Croatia, Crozilla, Real Estate Croatia and so on.
You need to keep updated on the market and what are the offers available.
Second step, meetings and viewing
When you find interesting options, organise the house viewings with the sellers or real estate agents.
Try and schedule them one after another, so that you can check as many as possible during your stay in Croatia.
The notes, if possible document with images and videos everything you see, take in consideration your feeling and first impression of the place.
Take with you a friend or acquaintance that can help you analyse the property.
It is very relevant recording somehow what is promised or said to you, so you can protect yourself against any traps.
The crucial step of buying property in Croatia: analysis of interesting options
Don’t get mistaken, no-one else can make the house analyse better than you, not an agent or seller!
If the seller tells you, that the house is 120m² , buy yourself a measuring tape and confirm 🙂
Request proven information – original and updated documents.
Anticipate and avoid serious problems after the purchase you, get enough information beforehand, anticipate and avoid serious of problems after the purchase.
The seller doesn’t want to share with you any negative aspect of the house that could lower your offer or make you give up the buy.
It’s not a matter of luck, which makes the difference on your investment return. It’s the a matter of researching, collecting information and planning.
Photos, visits and then? What else should you check to avoid any regret on your decision
Apart of seeing pictures and visiting the house, check also:
- Trends in tourism in Europe and in Croatia. If you buy a villa to rent out in a country, where tourism decreases, don’t think that its value will increase over time! If you’re buying property in Croatia, check official statistics.
- How were different construction steps made? Check who were the people involved on the construction, like geodesist, architect, builder and developer, checking those technicalities can avoid legal problems and construction problems, such as humidity.
- How the villa in Croatia, you want to buy, will be rented out? What is the marketing strategy for it? Who are the people who will do this job? Your initially helpful agent, once the villa is yours, will not be interested any more on helping you rent it out. Make written agreements with competent people before the purchase.
Don’t be naive when buying a property in Croatia, make sure you tick off the list above.
Professional analysis starts from the geodesist
From the geodesist? But, I’m not buying a land in Croatia. I’m buying a house!
Take control over the situation when buying property in Croatia, find out who was the geodesist involved in the house project and construction.
This figure is extremely important for the house and the plot. If he made errors, and you don’t do a professional analysis with a new geodesist before the purchase, you will end up paying for it.
Another case study, why should you pay extra for something that doesn’t exists?
Imagine you bought a house on a plot of 435m.
After a few years you wish to sell the house. For that you hire the geodesist to measure the plot.
You find out that the plot is of 400m! Meaning the land registry contains errors.
You have never had 435m. That means you had paid for something that never existed! And it’s only, because you did not check the size of the plot before purchasing with your own geodesist.
Now, if a new buyer surely reads this article and takes in consideration the advice, he will check your plot for sure before the purchase and will surely not pay for 435 m without checking!
Buying property in Croatia? OK, but first “coffee” with a geodesist. And you can have it right now
Deni, our geodesist works with Abaka a company based in Rovigno, Istria Croatia and has supported many successful projects with his knowledge and expertise.
His role is fundamental for any investment project in the real estate market – without him no villa could be built!
And that is why we interviewed the geodesist to share his knowledge with you.
- Why is the geodesist so important for an investor? What can the geodesist do for an investor?
- What type of problems a property investor finds if he doesn’t involve an expert geodesist in the project?
You will also learn:
- In how many projects was Deni Tomišić involved?
- What was the most difficult project that Deni Tomišić was involved in and how did he solve it?
- What are the best places to buy in Croatia? Istria, Dalmatia or maybe Zagreb zone?
- How does he imagine Istria Croatia in 10 years? What will improve until that time?
- The most important advice that Deni Tomišić can give to an investor buying an investment property in Croatia from geodesists’ point of view.