One crucial thing in real estate investments is a GOOD EXIT. Yes, you can find a beautiful property, yes it can be cheap, but to make a profit you have to sell it. Have this in mind since the very beginning.
When buying for investment, ask yourself who is going to buy form you. Is it going to be another investor? Is it going to be a local buyer in search for a house to live in? Well, if the answer is another investor you’re probably in the wrong place. A solid investment market is sustained buy natural demand and not buy speculative investments.
Romania Property Market is sustained by local demand.
This is undoubtebly the strong argument for investing in Romania: there is a strong need for houses. According to official data the market is 1,000,000 units short and there is a new middle class that can afford to buy new properties.
There are 4 types of buyers on the market, with the middle class counting for 75% of the sells.
1. Middle class buyers. They are the new developing class in Romanian society, profiting from economical revival in last years. They have access to high incomes, mortgages and own properties (mainly from family) that they can sell. They will look for new, better properties to correspond to their new social and economical status. This category is actually counting for 75% of the market.
2. Small Investors. They count for 15% of the market. They buy in order to rent the property and to make a profit from increasing prices in the Romania property market.
3. Rich buyer. In past years a new social class has emerged. With access to big resources, this buyer will need to buy luxurious properties in top of the class location. Old renovated villas in Bucharest north area, new luxurious apartments close to Herastrau Park, big houses in green suburbs like Corbeanca, this buyer will pay anything from €1mil to 4 mill. For some super-rich the limit for a property goes beyond €10 mil. This category accounts for 7% of the market.
4. Multinationals and Embassies. These institutions own a permanent portfolio of luxurious properties used by their foreign staff or as offices. They count for 3% of the market.