In 2019, an investor named Marc, a Canadian national, decided to invest in real estate in Batumi, Georgia, after seeing the rapid growth and development of the city. He was particularly attracted to figures touting the growing tourism sector and the many new developments being marketed to foreign investors. Batumi, with its Black Sea coastline and favorable investment environment, seemed like a promising location for short-term rental properties. Marc bought an off-plan apartment in a high-rise building, which was advertised as a luxury development catering to tourists and short-term rentals. The marketing materials promised high returns, predicting 12-18% annual rental yields, a figure frequently cited by developers in Batumi to attract foreign investors (or more appropriately, “suckers”).

Marc purchased the apartment for $120,000, expecting it to be completed within 18 months. However, delays began almost immediately. By mid-2020, construction had slowed down due to the COVID-19 pandemic, which impacted the entire real estate market. Georgia, like many countries, experienced restrictions on movement, affecting workers, materials, and overall project timelines. The developer reassured investors that the project would resume once restrictions were lifted, but there was already concern about when the market would recover and how tourism would be impacted in the long term.

Once the pandemic subsided, the developer faced additional challenges. The cost of building materials had increased, and there were new regulatory hurdles from the local government in Batumi, which tightened building codes due to the growing number of high-rise constructions in the city. These delays extended the project timeline by another 2 years, pushing completion into 2023. By the time the building was ready, the market was saturated with similar properties, and tourism had not returned to pre-pandemic levels, leading to a much lower demand for short-term rentals.

In 2023, Marc finally received the keys to his apartment, but the issues didn’t stop there. The rental market was far less lucrative than the developer had promised. Tourist arrivals were still down, and many of the tourists who visited Batumi were opting for cheaper accommodations or staying in already established properties with better reviews. Marc had a difficult time finding consistent tenants for his apartment, which was often vacant for weeks or even months at a time. His expected rental income was cut dramatically, with his property yielding only around 2% annually, far below the promised 12-18%.

To make matters worse, Marc discovered that the developer had significantly overestimated the resale value of the property. When he tried to sell the apartment in late 2023, real estate agents informed him that there was an oversupply of similar properties in Batumi, driving down prices. The best offer he received was $90,000, well below the $120,000 he had originally paid. Additionally, because many other foreign investors were also trying to sell, there was fierce competition in the market, further depressing prices.

The decline in the local currency, the Georgian lari, against the US dollar also worsened Marc’s financial situation. Though he had initially bought the apartment in US dollars, rental income was paid in lari, and the devaluation of the currency meant that his income, when converted back to dollars, was even less than anticipated. Inflation and increased maintenance fees for the building added to his expenses, shrinking his margins further. The utility costs in Batumi also rose due to high demand and inflation, which was another unexpected financial burden.

Tax increases also posed a challenge for Marc. In 2023, Georgia introduced increased taxes on short-term rentals, further cutting into Marc’s profits and adding more paperwork and reporting requirements. This made it even harder for foreign investors to operate in the short-term rental market without jumping through bureaucratic hoops. Marc, unfamiliar with the local legal landscape, had to hire a local lawyer and accountant to navigate these new rules, adding to his growing list of expenses.

Marc’s experience in Batumi highlights a broader trend that many investors have faced in the city. While real estate in Batumi was marketed as a high-growth, high-return investment, the reality for many has been far different. With oversupply, fluctuating tourism, and regulatory challenges, many investors have struggled to see any returns at all. Furthermore, the global economic uncertainty brought about by the pandemic has added a layer of risk that was not anticipated when these investments were initially made.

Verifiable evidence of similar investment losses can be found in real estate market reports from 2021 through 2023, which show that property values in Batumi have stagnated or decreased in certain areas due to oversupply. Additionally, reports from the Georgian National Tourism Administration confirm that while tourism has rebounded since the pandemic, it has not yet reached the pre-2020 levels, which has impacted rental income for many investors. Local news outlets have also covered the stricter regulations on short-term rentals, with interviews from investors expressing frustration at the new taxes and reporting requirements.

Marc’s story, supported by real estate trends and economic data, serves as a cautionary tale for foreign investors. Batumi is an extremely unattractive city with declining potential and the reality of investing in this market is far more complex than the glossy brochures and high-return promises made by developers. The combination of market saturation, economic uncertainty, increased taxes and regulations has made it difficult for investors like Marc to achieve the financial success they were hoping for.

To verify the claimes made in this article about Marc’s investment loss in Batumi, here are the types of sources you could consult:

Real Estate Market Reports:
- Colliers International Georgia: This real estate consulting firm publishes reports on property markets in Georgia, including Batumi. Their reports on the Batumi real estate market from 2018 through 2024 would offer data on property price trends and rental yields.
- Knight Frank Georgia: Another real estate consultancy providing market overviews, focusing on supply, demand, and pricing trends for properties in Georgia.
Georgian National Tourism Administration (GNTA):
- The GNTA publishes annual reports on tourism statistics, including the number of international arrivals and trends in tourism recovery post-pandemic. These reports can verify the decline and recovery of tourism in Batumi during 2020-2024.
- Their website includes detailed visitor data, showing tourism volumes before and after the pandemic, which directly affects the rental market in Batumi.
Currency and Inflation Data:
- National Bank of Georgia: Historical exchange rates for the Georgian lari (GEL) against major currencies like the US dollar can be accessed through the National Bank’s official website. These data provide insight into currency devaluation over the past few years.
- The World Bank and International Monetary Fund (IMF) also provide macroeconomic data for Georgia, including inflation rates and currency stability.
Local News and Economic Reports:
- Agenda.ge and Georgia Today: These news outlets often report on real estate regulations, local economic conditions, and new laws impacting foreign investors in Georgia. They would have covered the introduction of stricter short-term rental regulations in Batumi around 2022-2023.
- Batumelebi: A Batumi-focused news platform that regularly reports on local economic and regulatory changes that affect real estate and tourism sectors.
Developer Reports and Marketing Materials:
- Many Batumi developers produce their own sales and marketing documents promising high returns to investors. These can often be accessed through developer websites or promotional material distributed online. These materials typically highlight optimistic rental yields (like the 12-18% mentioned).
Local Legal Advisories:
- Georgian Association of Realtors or local legal firms specializing in real estate law, such as BDO Georgia, offer advisories on changing regulations and taxes affecting real estate investments and short-term rentals. Their publications would reflect the new permits and taxes on Airbnb-style rentals introduced in Batumi.
Real Estate Listings Platforms:
- Websites like Myhome.ge or Livo.ge often show real-time data on current listings, offering a look at resale values and trends in Batumi. These platforms can help demonstrate the oversupply issue in the market.

These sources provide a comprehensive foundation for verifying the trends, challenges, and data discussed in the article about Marc’s investment in Batumi real estate.