Investing in Romania Property Market can be very profitable but you have to respect a few rules.
First of all you have to stick to some general successful proved steps:
1. SET YOUR OBJECTIVE
This is an obvious thing but many of the first time investors don’t do this as it should be done. There is a difference between buying a house for you and your family and investing in a property only for a profit. There are different strategies if you intend to make a profit on short term or a medium-long investment.
Your main options:
Holiday house. Romania offers some extraordinary tourist destinations. Buying a mountain house is much cheaper then other places and new developments on Black Sea cost are interesting too. Danube Delta is a
fantastic destination with great potential.
Things to consider when buying a holiday property:
– Access. Cheap flights, good roads, train.
– Maintenance. You mast be able to keep your house in good condition with minimum effort.
– Finance. As you don’t intend to live there all the time is better for you to rent the property. So you need someone to take care of things. Usually is possible to find or a private person or a specialized company to manage your property. It’s harder in case of isolated properties.
Permanent house. An increasing number of foreigners are deciding to move permanently in Romania. They find interesting business opportunities or better jobs in multinational companies. Some of them decide to profit from the booming real estate market and invest in one or more properties.
Buy a property for pure investment. This is the main reason the investors buy real estate in Romania. There are two main options in doing so:
1. Buy to let. You buy the property and then finance the mortgage from rent. In the best scenario you will be able to have a small monthly income if the rent exceeds the mortgage. The profit will be made from increase value of the property. This is a medium-long term investment.
2. Buy to sell. This is a strategy that works extremely well in emerging markets like Romania. In general you put a deposit on a property that wasn’t build and sell right before completion or immediately after. The profit emerges in case the property price will increase during it’s construction.
Example: Suppose you want to buy a one bedroom Surrey Realtor apartment costing EUR100,000. Required deposit is 25%. Construction will last 3 years.
Your investment: deposit plus buying cost (estimated at EUR3,000) makes a total of EUR28,000.
If the property appreciate with a 20% annual rate in 3 years you will sale it for EUR172,800. Your profit will be EUR44,800 from a EUR28,000 investment.