For those who are not familiar with Virtuoso, it is nothing more nothing less than a huge network of the best luxury travel agencies, with more than 17,500 advisors worldwide.
Virtuoso releases a luxury european tour report every year, in which displays what the travelers seek when looking for a perfect holiday destination. The report for this year, revealed that people are looking for pristine, unique and less-known destinations to visit.
In 2018, Croatia featured on the second place on list of top emerging destination, amongst Japan, Portugal, Cuba and Iceland.
If you think of Croatia, you instantly might think of the popular spots such as Dubrovnik, Hvar, Split and Rovinj. Although those regions are espectacular and have plenty to offer, the uniqueness and authenticity of destinations that are still not very explored and overcrowded are attracting the attention of tourists.
People coming from all parts of the world get impressed by the stunning and nearly untouched beauty of Croatia. This attributes surely bring people looking for a perfect holiday destination, in which case Croatia fulfills this requirement, but also impresses and attracts entrepreneurs and investments. Recently, around the 15th of October, The Croatian Employer’s Association organised a couple of meeting with the US delegation.
The delegation included outstanding guests
This delegation brought along Jeffory Blackard, who is the founder and Chief Executive Officer of Blackard Global, Inc. A company that is the first firm in the world to advocate for the creation of modern-day villages. Before developing moder-day villages, Blackard Global, Inc developed over two billion dollars worth of real estate of varying kinds.
Jeffory Blackard is responsible for the completion of over 30 Master Planned Communities and 15,000 single family home sites. With almost 40 years experience, during various developments, he had his first experience with the country of Croatia.
You will find that plenty of the real estate Croatia opportunities are located in the overcrowded cities. And, if you have done some initial research on real estate investment opportunities, you will most definitely have heard of Njuškalo, the main and most known portal in Croatia.
This month, Njuškalo held a conference in Zagreb which the subjects approached were tourism, being the main industry in the country, combined with real estate investing. Together they have created a market with huge potential and definitely worthy of investing in.
During the conference, Robert Pakrovac, from Estre, one of the top banks in Croatia, said “ We’re an open book on which other sectors such as tourism, and ultimately the retirement of people in Croatia, lean on”
It is common to find real estate prices in overcrowded areas higher than in other locations. Due to the simple fact that there is more demand for these real estates. This is because many of these areas are popular destinations for both tourists and first time buyers who are less knowledgeable on Croatia and the real estate market.
However, recently more and more tourist and first time buyers are looking away from these popular areas and are in search for authenticity, privacy and unique experiences. These can be found in the lesser known regions of Croatia.
If you are planning on investing in Croatia, in an specific sector, for example real estate, it is important to know beforehand, what is the investment scene of the country you are aiming for.
It is not news that the main industry and sector that receives more investments currently in Croatia is tourism, showing amazing numbers that constantly increase yearly. For that reason, plenty of investments are moving towards Croatia’s tourism. However, the country is aware of other sectors that are growing interest for large amounts of investments, for example:
DAMAC was the first real estate company from the Middle East to list on the London Stock Exchange and they raised 379 million US dollar in the form of an IPO.
Valamar, a large investment group that operates in Croatia, plans to invest 2 more billion kunas by 2020 in real estate in Croatia, being 95 mln only in 2018.
Industrial and Commercial Bank of China has set up a 11 billion dollars fund to invest in Central and Eastern Europe. If you fit this money in a room it would probably reach the ceiling.
Currently the fund invests in projects in Poland, however the fund has already contacted the Croatian government with a request of presenting them some companies to invest in or projects.
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.
When arriving to Croatia, you might wonder where to go for a classy and refined experience. Istria has many of those places but one worth the visit is Opatija.
You won’t regret sightseeing this elegant city of Rijeka, 1 hour and a half driving from your Candy Brick luscious investment property, is a must go day trip to take your family or to relax on your own. The great thing about this city is that it can be delightful during the summer but also during the winter in Croatia.
Imagine you invest and become an owner of a luxury villa holidays in Croatia, which doesn’t have the Candy Brick Full Management Guarantee.
The villa is in an attractive location in the south of Istria. In fact, the region is attracting many tourists every year and offers plenty of reasons for people to come over and visit, such as short distance from Pula and Rovinj, the sea, astonishing nature, healthy outdoor lifestyle and active lifestyle and last but definitely not least, the gastronomy.
But between so many accommodation options, how do you make your villa attractive for tourists and make them chose your villa amongst the others?
The answer to this question is not only having high-quality holiday villa, but also providing excellent and efficient service for the guests and no stress for the owner of this property.
So, what options are left when it comes to managing your holiday home?
1.) Option 1: do-it-yourself:
Advertising your house online, this step can be simple, with research on where to advertise the property it is possible to know how and where to place your advertisement.
However, making the villa available online is a whole different step. It means you would have to organise and manage the booking requests, making sure there is no double booking or overlapping days and as a busy person, you would want to avoid that.
Nowadays people, in general, are extremely busy, the last thing anyone needs is one more chore to fit in their schedule, especially if this task is another full-time job.
The goal of a smart investor is to automatise the profit, keeping his time to do what is a priority and make the capital work for itself.
2.) Option II: giving this responsibility to an agency
This solution sounds great at first, but considering it more carefully, tourist agencies may not be able to represent and show the assets of your holiday villa in the correct way. Because of their extended list of properties to manage, they might not give your property the attention it requires and deserves.
For example, if your property is worth 1.5 mln euros, it is very likely it has plenty of refined rooms, a beautiful garden, a gym, a lot of gadgets, infinity pool and to top it up, a really polished design that tourists would be willing to pay more for.
Those are the selling points to rent your property out. But unfortunately, if the agency is managing hundreds of other properties, they might not be aware of and take all the features mentioned above for granted.
As a result, they can end up following the standard procedure of taking a couple of photographs of the most common rooms. Misrepresentation can lead to a shortage of bookings, as the villa won’t be appealing for the tourists amongst the other rental properties and the rental income can decrease if the features are not displayed and justified on the rental price.
Commissions can be quite high in those agencies, amounts around 30%-40% of your income for the service. This service usually does not include cleaning, welcoming guests, an available hotline for unexpected issues, gardening and etc. You would more than likely have to pay another company to look after those tasks.
The options above are not ideal for a busy investor that wishes to maximise their financial return and doesn’t have time to dedicate on property management, it also might be the case it is not in their interest to dedicate time for this task anyway
Candy Brick Full Management Service
The Candy Brick Full Management Guarantee is amongst the other guarantees offered to investors, protecting their interest and maximising their financial return.
With the Candy Brick, Full Management Guarantee you have trusted and professional staff taking care of your holiday villa and of your guests. The services the Full Management Guarantee includes are:
- Marketing your villa holidays
- Managing bookings
- Welcoming the guests
- Cleaning the villa and doing the laundry
- Gardening and pool cleaning
- Hosting the guests
- Also, a hotline always available for the guests to call any time to solve any problem
And what is even better is that the charge is only 20% of your income, which is much less compared to other agencies, and all the services in relation to rental management are included in the price.
As a result of this service, you get the best return on your investment without the need to worry about anything or having to deal with different companies.
A professional and reliable management service is key for your investment, so the staff maintaining the villa is local and well qualified. With this guarantee, all you have to do is sit back and enjoy your €30,000 rental income every year.
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.
1,800 kilometres of coastline in the entire country, with its islands and turquoise Adriatic, makes it a perfect holiday scene
Istria is the largest Adriatic peninsula, surrounded by the sea, it has always represented the bridge that connects the Middle European continental area with the Mediterranean.
Expanding the infrastructure is extremely important to attract investments of the same kind
Croatia is home to the first ever electric super car; The Rimac Concept One. It’s a two-seat high-performance electric car designed and manufactured between January 2013–November 2014 by Rimac Automobili.
Mate Rimac, the founder of Rimac Automobili, played part recently in the electric Jaguar used by Harry and Meghan at the Royal Wedding.
Apart from being the birthplace of the first electric super car, Croatia has yet to shown much interest in adopting new sustainable, and modern mobility technology.