October 12, 2018 – While most real estate is based on the coast and Zagreb, an increasing number of foreigners are taking advantage of the excellent value on offer in rural Croatia. In the latest in our series on foreign entrepreneurs in Croatia, meet Paul Fischer, owner of Rural Property Croatia in the northern city of Varazdin.
1. First and foremost, why Croatia?
Pure accident, I was wandering the world and came upon Varazdin whilst attempting to avoid motorways on my travels. I stayed for a few days….. I’m still here after 13 years. I enjoy the space, the slower pace of life, the 4-season climate with mostly blue skies, lower cost of living, very low property prices, the beautiful city of Varazdin and its rich cultural lifestyle – there’s always something happening here. I wasn’t looking for anything specific, but I found it.
INTRO YOUR BUSINESS, what is it you do?
We’re a small group who live in the region, mostly residents in the city of Varaždin. A mix of Croatian and English (one) nationals. We all speak English and Croatian. We have between us, the right balance of experience and knowledge to enable us to understand and work in the field of property sales, property management and all the details and processes required to buy, sell, manage, maintain, repair and renovate homes and properties in this region. We have been doing this, with an ever increasing involvement, since our start in 2008. All of our customers are foreign buyers although we are thinking about joining the domestic scene.
2. Tell us about some of the differences of your expectations of running a business in Croatia and the reality.
I was the owner/operator of a hydraulics supply firm in the UK so I had a set of experiences, many of which I had to throw out! The biggest change was accepting that official documents are not reliable sources of facts. In property matters, establishing ownership, legal status of buildings, debts… you have to investigate everything yourself and understand what the reality is. I’ve learnt having a Croatian partner is necessary and finding the right person is the key to most things. Lesson No. 2: “60 days to pay” means never!
3. What (if any) bureaucratic issues have you encountered and how did you overcome them (i.e. any advice to the would-be entrepreneur?)
Never be in a hurry and understand the first thought in the mind of most officials is to not make a mistake and endure subsequent criticism. Going from office to office to get a stamp, a biljek, a signature – each requiring some form of original documentation as evidence. If things go wrong, you’ll never find anyone responsible for it. Sitting in a house with a Notary public with a lawyer and a couple of local senior residents and deciding who on the official property owners list is dead or alive – just to establish who owns a small plot of dirt. It can be surreal at times. HEP is an administrative disgrace yet the people in the tax office in Varazdin are brilliant, efficient, flexible and helpful. Why so different?
(Paul Fischer)
4. How is your product or business perceived in the Croatian market?
Interesting. We get little or no contact from local agents but we get feedback from lawyers that we are the subject of much discussion. Most sellers believe foreigners will pay more for property and we have to disabuse people of that view. The truth is, local banks won’t give mortgages so it’s mostly foreigners have the cash to buy at all. When you are told “clean papers”, trust – but verify. In fact, verify the hell out of it.
(Sanja Hruskac, who has now taken over the running of the business, allowing Paul to rest his weary bones a little)
5. What were the opinions of your friends and community, were they supportive of your idea, or…?
We are regarded as estate agents, which is only a small part of what we do. Agents have a poor reputation, probably deserved, so we do suffer from that. We’ve had to work hard to show we play with a straight bat but you can’t win over everyone. We do get more sellers approaching us from social contacts so we take that as a positive sign. Nobody was overtly supportive but that probably more to do with a general hatred of estate agents rather than anything connected with Hrvatska.
6. What are some of the greatest challenges you have faced in business in Croatia?
Probably the same as for everyone else. So many people work cash-in-hand that our services are seen as over priced in comparison. The costs of employing people is huge, nearly 50% more than their salary. The top problem is the time we spend running around with bits of paper, it robs us of so much time we could spend on productive work. Even when we learn the process from a previous job, it’s never the same for next one.
7. If you knew then, what you know now, would you have come?
Yes – but I doubt I would have tried a start-up business. However, I am pushing 70 years old so perhaps a younger person would find the necessary stamina. In non business terms, it has been a good move for me.
8. What are 3 things you love about Croatia?
A near total absence of street crime – A clear 4 season climate with a long warm summer – space/greenery/absence of traffic jams/lovely Varazdin…. Sorry, can’t keep it to three.
9. What are 3 things you would like to see improved in the business climate in Croatia?
Taxation is too high, it forces too many to operate on the dark side and that makes legitimate businesses unable to compete. Too many rules which protect nobody but require a public official to have a ‘job’ – where there is no job. Get the courts to work so that disputes get resolved quickly, there’s no point entering into a contract if either side can break it in the sure knowledge it will be years, if ever, to get a decision.
10. How is it working with Croatians in terms of a business mentality?
The culture is not yet mature enough for SMEs and start-ups. People give quotes but don’t accept the risk they may not get the contract. Too much short term thinking, make a killing now but have no view to building a customer base for the future. Why do people say they can do something when the truth is… they cannot? A little openness would help but there seems to be a high sense of status getting in the way.
11. Advice for foreign entrepreneurs thinking of coming to Croatia?
Learn patience, forget the norms you be used to elsewhere. Learn quickly. Most of all, find a Croatian partner but choose with great care, a trustworthy local person can bring great advantages but be aware of the enormous social pressures to which they will be subjected by their peers – just because you are foreign.
12. Tell us more about these great properties you are selling – give us a taster.
Three places, one cheap, one middling/suburban, one higher/countryside…..
Summer house located on a pretty hillside near Beretinec in Varaždin county. €30,000 negotiable.
Much more than a wine house, having several rooms, this summer/vacation house has a lot going for it in the context of a holiday retreat and is large enough for full time living. The very keen price means plenty of affordable possibilities exist for updating and improving to whatever you wish.
A solidly built brick and block small detached house sitting on a good sized plot of land, a former vineyard, enjoying nice rural views and a quiet location on a very lightly used asphalted country lane on a hill top. Nearby (1.7km) is the village of Beretinec, the city of Varaždin is 9Km away. Built around 1982, it is surrounded by mature trees (hence it is difficult to photograph) and is part of a community of mixed weekend properties and full-time occupancy dwellings.
Very large and imposing suburban detached house in Varaždin, north Croatia.
A very large detached house located on a blind street in a suburb of Varaždin. Originally built as a maisonette (duplex) but which now has an internal staircase connecting the two levels resulting in a multi-room expansive residence. Showing its 1980s heritage both inside and out, it was constructed for a wealthy owner in that the materials, finishes and structure are sturdy and imposing, quality – if a little faded, best describes it. It has been empty for a few years and has suffered as a result but only cosmetically. There is a rear hard standing, garage, workshop and other external buildings, the garden is currently block paved. The entire property sits within the local residential zone hence foreign buyers do not need a Croatian company to own it.
The house is sold with all the fixtures, fittings and furniture as shown below. It has full gas fired central heating with hot water radiators in every room except the kitchen. All the windows are of wood construction having twin glass panes (not modern double glazing) and most casements are of the tilt-or-open style and are fitted with integral roller blinds.
A very large two-storey suburban detached house with additional outbuildings, basement and roof space. Viewed from the street, the main house has four large windows facing south, the glass and brick wall (right) is an extension which contains two staircases, one internal to connect the ground and first floors, the other is external and connects the side entrance to the first floor thus making the property configured for either single occupation or two self contained apartments (maisonette/duplex). To the left are twin (red) doors leading to the driveway and garage. The white building at extreme left is also part of this extensive property in which is a workshop, utility room and basement.
A splendid country house in Vugrišinec in the Croatian county of Međjimurje. €125,000 negotiable.
Extended and re-built in 2000, this hilltop residence sits on what can best be described as its own park. Sitting high amid rolling hills, lovely views are all around. Originally a small cottage, a full modernisation project which included a two-storey extension, has produced a fine residence of nine rooms, all are in very good and modern condition yet retain the original country-style feel. Features include full mains gas central heating, full thermal cladding, modern double glazing, rich parquet and ceramic floors, new electrical and water systems and all decorated in a calm and tasteful fashion. The surrounding land plot is both large and beautifully laid out with lawns, meadow, mature trees, a very nice terrace and exterior lighting.
The original cottage is the single storey building to the left, the double height extension is to the right. This view is from the rear garden and shows the main entrance, roofed terrace area and first floor sun deck (extreme right) behind which is the pathway leading down to the adjacent country lane and the double garage.
To learn more about the real estate market in rural Croatia, visit Paul’s website.
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