Investing in Property Shares

Prices of real estates in Bulgaria during the past years go up vastly. At first sight it looks very difficult for some people to take advantage of this. The purchase even of just an apartment doesn`t fit everybody`s pocket and it is impossible to think of something bigger. Besides that the following maintenance of the property takes time and knowledge. Though if you have certain finance that you want to invest in real estates, you could think of buying stocks in some of the forty stock holdings with special investment purpose- SHSIP.

investment property
These are special type of companies that gain their finance from the stock exchange and invest them in different projects – residential and administrative buildings, commercial and office terrains, holiday villages, agricultural land and etc. As long as the projects are very different, the profit could come from rent, resell of already built properties or offices. The common here is that this profit is not obliged with taxes which defines the interest of making such collective schemes. Buying stock you actually buy shares of the projects of SHSIP. That way if the projects are successful you win too through your right of profit from the fact that the stocks get more expensive.
The stocks of SHSIP are being offered on the bottom of the stock exchange together with the other public associations. In order to buy stocks you need the services of an investment mediator. But before you do that you better get aware of the projects of all the companies, that you like and their experience till now. The main document is the prospect of offering securities, which represent you, before they go on the stock exchange. Just like all public companies they present a three month financial reports, and in the annual report you`ll get to get aware of what the management`s expectations for the company are. All this data you can find on the website of the Bulgarian stock exchange ( Part of SHSIP display information on their websites and for some you can read about in the media.
Despite the short 3 year history part of the older SHSIP began to win. For 2006 11 of them have given dividends and the expectations are that their number will get bigger. In 2006 the property funds were just 11 but in 2007 they already are 40 and they run actives of 820 mln levs and the market capitalization is close to 1 mlrd levs. In reality the choice is much smaller because some of them are created by groups connected to shareholders with the purpose of using the tax preference. With them basically there is no trade/business and respectively there is no opportunity to gain any stocks.
Properties are known as secure investment but of course there is risk too. It is normal to get periods when prices go down and these periods can be long. There is risk in any project that even on a stable market can turn into a losing one. There is always a thread from inexperienced management or even frauds even though the holdings are legal and they are under the control of the Commission for financial supervision. Anyway we shouldn`t forget that this type of investments are long-term investments and during this time the projects of the company should grow and gain profit. So the lack of dividends are not a definite signal that there is something wrong.

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