Off Plan investment in Romania
September 8th, 2007
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Romania property markets offers some fantastic opportunities for investors ready to buy off plan properties.
Successful off plan investments depend on the global factors acting within the property market it self. You obviously have more chances to make a profit in a growing market. Romania emerging property market offers the right conditions for an off plan investment to prove profitable:
Economic Stability
Romania is one of the fastest growing economies in Europe, only after Estonia and Latvia. A 7.4% grow is forecasted for 2007 after a strong 7.8% in 2006.
EU integration
Romania has been admitted as a member of European Union. The country will receive €30 billion funds for the years 2007-2013, to improve local infrastructure such as roads, schools, hospitals and agriculture. This will lead to more jobs therefore more people who can afford to buy or rent properties.
Political Stability
Romania has passed through several democratic election and it’s prove itself as a functional European democracy
Language issues
There will be no problem for a foreign investor to find professionals like estate agents, lawyers, accountants with good English skills. French, German, Spanish and Italian are spoken too.
Beside these general factors, off plan investments depend on some other particular facts that you have to look for:
- Check developer’s background. This is a very important aspect. You want your apartment to be ready on time and everything in place.
- Check constructor’s background. Is crucial for the property to be delivered in good lasting conditions.
- Take a close look at the living area. This is different from the total area that you will pay (including common areas like stairs, roof, road inside the development, common garden, etc). It is possible for the real estate agent to present you the total living area of the property without telling you that the property itself will be considerably smaller. Sometimes they only mention the living area to make the apartment's price per square meters look cheaper.
- Developer’s partnership with a bank is a big plus. Some small developers rely the project’s finance only on buyers’ deposits. This can be risky and could cause unwanted delays.
- Ask both the agent and the developer if it’s possible to resell before completion. Also ask who will handle the reselling process.
- Check with the agent or the developer if is possible to rent the apartment for commercial use. Is common for small companies in Romania to have their head office in residential apartments and you don’t want to miss this lucrative rental market. From a legal point of view you need permission from wall on wall neighbors to settle office in an apartment.
- Ask about maintenance cost. In some cases maintenance is very expensive making the property hard to rent and sell. Is common for new developments to have highly monthly cost, owners paying for common areas like inside road, pool, gym etc.
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