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.
One of the best investments one could do is property investing, but it can also be very difficult decision requiring research on the area the property is located and on the property itself, apart from a lot of budgeting or financing for most people. For that reason, It can be really a decision for life if that is the case as if you decide to finance you will have a couple of year of mortgage awaiting for you.
How then to make the most of your money and depending on the area even an income?
To make an income it is important to decide on a property that is located in a very attractive area or country. This way you guarantee there will be away interest from tourists to stay in your house if you decide to rent it. That is the core of buying an investment property as well as in an area. Buying an investment property has to both ways, for the investor and for the guests.
To make this comparison simpler we selected a few countries and the prices for a house in comparison to Croatia. So, here is a brief list of properties in Europe. There are requirements you can stick to when looking for an investment property abroad, on the list below the requirements were either price or number of rooms.
Croatia holidays are defined by stunning nature, magnificent weather and superb food
For excellent dishes you need top quality ingredients and products. The fresher the better. And for sure the locally grown products in Croatia meet these requirements.
The really sunny and pleasant weather makes the Istrian soil perfect for agriculture. Many tourists come to the region to taste and discover the richness of Croatia’s gastronomy.
The soil in Croatia is red (terra rossa). This type of soil is typically present in Mediterranean countries due to karstic nature. It has good drainage and neutral Ph. Together with warm and moist temperatures, makes Croatia a perfect country for growing fruits and vegetables.
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.
Don’t be mistaken. Tax in Croatia isn’t like it is in a haven such as the Cayman Islands. It can be quite high. However, this won’t be the case with your Candy Brick investment property that gives you a high return on investment.
If you purchase your villa as a natural person you will have to pay VAT which in Croatia is 25%. This would be an additional €87,500 which you wouldn’t be able to claim back.
That is why we recommend you open a private limited company in Croatia (d.o.o.).
This is more advantageous as you can claim your VAT back in 30 days! If you can’t cover this amount for the 30 days, we can offer you an interest free loan to cover it.
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.
Before you search for villa for sale in Croatia, listen to the interview with Deni Tomisic – an expert geodesist from Istria.
You really don’t want to be in a place of a real estate investor, who is buying an investment property abroad, in Croatia, without checking first the land issues!
You should get now a chill up your spine. Brrrr…
Checking aspects connected with the land seems obvious when… buying a land.
However, it doesn’t sound so self-evident, when going through houses for sale in Croatia with a fine-tooth comb.
And in fact, many investors, once they see how much they can make yearly from renting out the villa to tourists, they don’t analyse much more.
The moment when your eyes feel like 2 bling-bling dollars is time to take a breath and make a couple of questions.
Start from making sure that the geodesist, who was involved in the construction of the villa that you want to buy and let out in Croatia, is an expert, who really knows his job.
With support of an expert geodesist question marks will quickly disappear and you will be sure what is an interesting investment property and what is definitely not.
Interview with Deni Tomisic – an expert geodesist from Istria Croatia
In the first episode of Candy Brick Podcast – the first podcast about real estate investing in Croatia – you will meet Deni Tomisic (ABAKA d.o.o., Rovigno in Istria Croatia).
Deni Tomisic can’t count the number of cases that he solved successfully for real estate investors in Croatia.
In the podcast he shares most difficult cases and proves that with expertise and good preparation every goal can be met.
Technical aspects of geodesy, the reasons why every investment project in Croatia must be supported by an expert geodesist, problems of investors who search for villa for sale in Croatia, business opportunities, practical tips – all this you’ll find in this episode!
If you are interested in having a property in Croatia that you rent out to tourists and benefit from rental income, you really need to listen to interview with Deni Tomisic.
What are the topics of the podcast with Deni Tomisic?
- How did it start that Deni Tomisic became an geodesist?
- What was the most difficult project in which Deni Tomisic was involved in, as an geodesist, and how did he solve it? I only mention here, that there was one case in which he found an agreement with 50 people! This shows the importance of human relation for a top-notch geodesy project.
- What does the geodesist actually do?
- “Catastar“, land registry Croatia – what data can it give to you?
- What are the mistakes that a geodesist may do during his job? (such errors could cost you a lot of money and nerves if you search for villa for sale in Croatia)
- How to find a geodesist if you are a new investor in Croatia? Who should you avoid to work with?
- You are interested in few real estate in Croatia. Let’s say in Istria. You’re still not the owner. You are coming with them to a geodesist… What should you ask the geodesist to be sure that you actually buy, what you know to buy.
- Case study: February night… big problem with villa for sale. Actually, there were more villas for sale. 3 lawyers in Rijeka Croatia can’t solve Marta Stone’s problem. The real estate agents “seem” to put a trap on a foreign investor. Deni proved (in less than 24 hours!) that the villas priced 1,8 mln euro can be anything. But for sure not an investment! Listen to the whole story in the podcast.
- What are the best places to buy in Croatia? Istria? Dalamtia? Zagreb zone?
- Istria in 10 years – what will it become?