Invest in Real Estate, Buy or Rent a Flat in Batumi, Georgia

We have been living 3 years in Georgia, first in Tbilisi and after that in Batumi on the Black Sea coast. Georgia has one of the best immigration policies in the world allowing stays up to 12 months without visa-runs. However, finding an apartment is not that easy. We have checked over fifty old and new flats, rented three and did not buy anything, although the prices were tempting. The purpose of this blog post is to share our experiences in the real estate market and perhaps help you to avoid some of the most common pitfalls.

A new tourist flat or a local apartment from an old building?

The first thing you need to choose is whether to go for a new or an old building. New flats are usually built for tourists and they are made quickly and cheaply. Furniture, appliances, and interior design are not made to last nor please the eye, and the kitchens are small or non-existent. The flats themselves are also small, typically under under 50m2. As tourist flats are empty most of the time and not heated, there can be plenty of mold in the furniture, fabrics, structures, and AC units. If you are asthmatic or allergic, you might want to take that in account. In local flats, you can sometimes find much better deals. They are more spacious and made for year-round living.

Another big difference between tourist flats and local flats is seasonal pricing. Tourist flats are rented for holiday-makers and priced accordingly. Even though most of them are empty around the year, the daily rent during the summer can be the same as a monthly rent during the winter. Owners have two different rents depending on the time of the year. Local flats, on the other hand, have fixed monthly rents that remain the same around the year. We have paid, for example, US $200/month for a 2-room local flat with a proper kitchen and US $300/month for a small, illegal mansard with a seaview.

Utilities in tourist flats are more expensive than in local flats. A monthly electricity bill in a condo can be 100 GEL (35 USD/32 EUR) even if you don't use any electricity, while in a local flat you pay according to your usage (measured with an electricity meter) directly to the electricity company. Our bill has been less than 10 GEL per month (3,50 USD/3,20 EUR). Tourist flats rely on electricity for shower, cooking and heating, while local flats use cheaper and more ecological gas. Gas cuts are rare compared to electricity brownouts, and announced beforehand. Our gas bill has been up to 80 GEL (28 USD/26 EUR) during the coldest winter months, while in the summer it has been around 10 GEL (3,50 USD/3,20 EUR). Especially in new condos, there can also be various other costs such as administration, lightning of the common areas, front desk, guards, and cleaning fees. There are no limits when it comes to inventing new fees.

Investing in real estate in Batumi, Georgia

New "profitable apartments" are built and sold to clueless tourists by promising them a monthly rent income of a thousand dollars, easy bank loan, and fantasies about Batumi becoming the next Dubai. Today, the town doesn't look anything like the Gulf tourist hub, but marketers are convinced that the dilapidated former Soviet port can prosper by offering prostitutes, drugs and gambling for Muslims. However, another and perhaps more plausible reason for the current overproduction could be money-laundering and corruption as suggested by The New Yorker. Otherwise it makes no sense to build so many apartments simply to rot.

There are currently more than ten thousand flats either empty or under construction and most of them are incredibly cheap condos built for tourists. There's plenty to choose from, but it also means that the market is flooded and getting rid of the flat can be difficult. A notary told us that in 2017, there were only 700 notarised apartment sales. If the number is accurate, condos are practically unsellable in Batumi. If you hope to profit from your real estate investment by selling it, do a reality check and bear in mind that it is very challenging if not impossible to find any accurate statistics in Georgia. Even historical figures such as past tourist arrivals keep changing all the time.

Regarding rental income, it is worth taking into account the current travel ban for Russian tourists (the largest group of tourists travelling to Georgia), the coronavirus hysteria, and the ongoing war with Russia. Although there is a ceasefire, no permanent peace was made and Georgian nationalism is feeding the conflict and inciting racism against Russians as invaders. Also AirBnB is a lost cause for rental income in Georgia.

If you're planning to live in the flat full-time or part-time yourself, there are still a few things to consider. Real estate business and marketing doesn't appear to be regulated in Georgia. Consumers are not protected and there are no strict building standards like in Europe. Everything is made using the cheapest and lowest quality materials, and ultimately the buyer carries the risks and the costs. In apartment buildings, there are no shared or communal responsibilities so nobody cares about damaging other properties or disturbing their neighbours. Even elevators work with coins because that's the only way to collect money to pay for the maintenance. If you buy a condo from a building that will never be finished, you will lose your money. That has happened to some locals we have talked with.

Many new condos that we checked -- even the fanciest and the most expensive ones -- had cracks in supporting structures. On top of construction issues, Batumi is in the earthquake zone. Any stronger quake can level wobbly high-rises. For example in 1905, Batumi was hit by a 7.3 magnitude earthquake.

• New buildings may never be finished in which case you lose everything you have paid.
• There is no consumer protection in Georgia. You are on your own.
• Check support structures and pillars for visible cracks.
• Check that the whole structure is not tilted. (Yes, you see these in Batumi. It's a miracle they have not fallen!)
• New flats are sold as black frames (empty, just concrete), which means endless noise when your neighbours start finalising their flats one by one before moving in. Are you OK with that?
• All buildings -- old and new -- have significant risk of water, electricity, telecommunications, and gas supply interruptions and traffic congestion. Much of the current public infrastructure was built during the Soviet era and it will not be fixed before it breaks completely. That infrastructure cannot handle more people than those who are already living in Batumi. If even a small fraction of the newly built condos are sold, Batumi's infrastructure will fail.
• There is no shared responsibility in any building. Your neightbours and the constructor have no obligations to help you or fix any problems even if it's their fault. After you have paid, you carry all the responsibility.

We decided to rent rather than buy, which means more security and flexibility for us. There have been rumours that the immigration rules might change to a maximum 3-month stay in every 6 months to promote residence permits that require substantial real estate investment. If that happens, we will leave rather than waste money in Batumi real estate.

Renting can be tedious in Batumi

When renting, we met many real estate agents and apartment owners. Some were nice, ordinary people but if you're like us and don't speak any Georgian or Russian, they might be afraid of dealing with a foreigner and not answer your messages. The ones who do answer include unreliable and arrogant scammers who try to rip you off because you're a bloody tourist who deserves that. The local business culture is challenging to say the least. Most of the time you can't trust anything the agents or owners tell you, and they can be so moody that even getting to see flats may be difficult, and once you get there, the prices they ask are outrageous. Who would pay US $500–$800 for a tiny flat in a former Soviet town when you can get something decent in Berlin with the same money? They seem to think that if they ask for a sane rent and get their flat rented, then the value of the flat decreases so it's better to ask a sky high rent and have the flat empty!

One peculiar feature of the Batumi real estate market is that the same flats are often handled by many agents, and prices and conditions vary. The real number of flats available is always less than it seems to be, but on the other hand there are a lot more flats for sale or for rent than listed, and thousands more are being constructed. A local friend is the only viable option to find a flat outside tourist/holiday/short-term market, but finding one can be equally challenging.

When you rent a flat, you pay the first and the last month's rent when signing the agreement. If you leave prematurely, you lose the last month's rent which is the deposit. Otherwise you will not pay the rent for the last month. Many flats in Batumi are illegally rented, so if you want to leave earlier, you may use that for your advantage. Take into account that landlords never have money, especially when it comes to returning your money to you, or fixing something in the flat, so you may need to take the deposit back by staying an extra month, or you risk losing your money.

The rent and the possible deposit are always paid to the owner, never to an agent. The owner pays a one-month rent to the agent as a commission and the agent works for the owner, not for you. If there are multiple agents, then the agents split the commission by themselves. If you have any problems, the owner is the only one who is responsible. The agents will lose their interest after receiving their share. And one more very important thing. Don't believe the mantra "summer months are more expensive", if you are really going to settle down for a longer time. There are plenty of empty flats during the winter and the summer. The difference is barely noticeable.

• When you rent, you usually pay 2 months' rent in advance, the first and the last month.
• If your landlord uses an agent, they pay one months' rent to the agent as a commission.
• In condos, there are often extra fees for electricity, communal facilities, guards etc. These can be very expensive. Remember to ask about them beforehand.
• When something breaks, it's almost always your fault and you need to pay or buy the replacement, even if the thing was already broken before you moved in.
• Many flats are not registered for rental use and rented illegally.
• In Batumi, there is a tradition to build extra floors called mansards on top of existing buildings. These unsafe constructs were never taken into account when calculating the strengths of materials and safety marginals, and they may have been added illegally.
• Many landlords treat their flats as badly as they treat their tenants. Nothing is really fixed before it breaks completely. If you want to get something done properly, you need to buy and have it installed by yourself. Don't expect any help or compensation.

To put things into perspective, renting in Batumi was much easier than for example renting a flat in Kenya. Take your time, check the available options and be patient with agents and owners, and eventually you will find someone and something acceptable. And if you don't, you can always move to Tbilisi which is much less touristy.

If you didn't find what you were looking for in this blog post, leave us a comment and we'll do our best to help you. Take a look at these ghost apartments and hyperbuilding photos in Batumi and good luck with house hunting!