Been looking at possible purchase of either land south of Bucharest, apartments in central Bucharest (Planorama for e.g.) and also some lakeside villas south also of Bucharest in a place called Mihailesti.
Lot of positives in the brochures re the predicted growth of the country, couples with its recent entry into the EEC.
Anyone had any experience either purchasing or investigating?
Hi nagalka Yes I have recently purchased an apartment in Bucharest. A development called Platinum Towers. Its not due to complete until Sept 2008. I am very excited about Bucharest as their economy is booming and their property prices are increasing at a good pace it seems. They expect 30% growth for 2007 I bought it through Property Secrets,this offer has now closed though. It was 25% deposit and 75% on completion.
Originally posted by nagalka: Been looking at possible purchase of either land south of Bucharest, apartments in central Bucharest (Planorama for e.g.) and also some lakeside villas south also of Bucharest in a place called Mihailesti.
Lot of positives in the brochures re the predicted growth of the country, couples with its recent entry into the EEC.
Anyone had any experience either purchasing or investigating?
Thanks.
There is a company called Romanian Property Online who can give you detailed information about property in Romania. I found the contact information on their website.
Hi Yes I think the general lack of interest is because most people do not think of Romania as a holiday destination, and I don't blame them really,(having said that Transylania has a lot of potential, apparently Prince Charles has bought a property there to help promote the country) but the difference with especially Bucharest is that their continuing property price increases are not due to the British buying up huge amounts of the country but due to the aspiring locals, many who live in the old communist era blocks wanting to live in newly build desirable apartments. The city itself has extremely low unemployment, and a population that is increasing all the time as more and more Romanians move to the city. The huge benefit to me as an invester as far as I can see is that the property will remain affordable to the local when I eventually decide to sell, and I can rent it out on a long term basis instead of messing around with holiday lets. Well I'm excited anyway!!
I've posted before about the lack of attention when it comes to Romania. whether it's positive or negative, i would've expected discussion at least.
I've invested myself in an interwar period apartment in villa in the center of Bucharest. I went for renting it out short term and it's occupied an average of 22 days/month taken over all of last year.
As for Romania as a holiday destination. The mountain landscapes and ski resorts are truly beautiful, but thanks to the lack of marketing them, only known to the few. Also, a lot of short- to medium-term rental occupancy comes from expats and business people which is year round.
Anyway, I would love to hear what you decide and what your experiences are.
Originally posted by Thorr: I looked at Romainia but found the prices as high if not higher than much safer Slovenia.
HEALTH - when I ski I notice huge numbers of injuries and heart attacks occur. The Romanian health system just isnt up to the job.
I think the capital is the best place to invest as long as you employ a large international law firm based there, to ensure you are'nt conned.
Have you been to Romania and seen that the medical system is bad??? It is as good as in Slovenia.
The only problem with Romania is that the prices are already high so there is no easy money to be made by Brits investors. Otherwise it is a wonderful country and a great holiday destination.
For you guys that have invested - did you have to purchase through a limited company. I've been told overseas investors HAVE to....besides set up costs, i assume there are annual accounts to produce; corporation tax, possible dividends etc
I have purchased by setting up a limited company... it is a long-winded and relatively costly process (although saying that it shouldn't be enough to put you off). You have to get documents apostiled and stamped by a Public Notary & the F&CO then translated into Romanian etc. You then have to get the company approved by a judge in Romania by using Power of Attorney and finally open a bank account with one of the Romanian banks. Unfortunatly you do have to submit annual accounts so you need to employ a Romanian accountant. I was sent an email by my agent in Romania saying that this costs EURO 60 per month, which seems a lot as the company that doesn't actually do anything!
I have also purchased through a limited company. If there is land involved you'll have to, although you could still buy the apartment in your own name and the land in the name of your company.
Setting up the company has cost me about 450,= Euos or 300,= pounds. In my case the cost for maintaining the company are a lot less because my lawyer has made the company "inactive". This process also will cost you a small sum but after that you'll only have to pay two small charges per year for some paperwork declaring the company is still inactive.
My accountant is romanian. I knew people in Bucharest that were able to recommend me an accountant I was comfortable with. But perhaps you should ask yours about the possibility of having your company declared inactive. It can save you a lot of hassle and some money.
I was wondering how people were planning on going about the renting out part in Bucharest. Because I needed to make some money immidiately, I've only had experiences with short term rentals. Long term sounds like less hassle but I don't know how easy it is and how long it takes on average to find a tennant.
Apparently ownership of land (even the land that a property sits on) is not legal for a foreign investor to own (the bricks and mortar are OK) - there are 2 ways round it, one is to set up a limited company - and the other is set up a trust, with the land placed in the trust, and the owners as beneficiaries.
Furthermore, not sure what you think about this.....I've taken a big step forward by registering with PropertySecrets and their new offering, literally called "My Dream" - based in northern Bucharest. Not read the brochure in detail yet, but I was a bit taken back by the prices: ranging from £75877 (studio) to £138,500 (2 bed) - seems a bit steep.
What percentage of the population could afford such prices? Are these ridiculous prices for the gullible and greedy westerners?! Guess I'll have to dif out some comparisons.....
£75'877 for a studio apartment in Bucharest does seem VERY expensive - I am buying my studio for less than half that amount (and I thought that was a lot of money!).
I seriously doubt many locals would be able to afford £76k (the average salary is, so I'm led to believe, around euro 300-400 per month in Bucharest and a lot lower elsewhere in the country) and with the current trend for foriegners to always buy new-builds in Romania it could be a bit tricky to sell on later.
Mr Bungle the average salary for Romania may be E300-400 pm but not for Bucharest! The average salary for UK is £23k pa but we know London salaries are far higher even excluding the city bankers. Most of the buying frenzy in Bucharest seems to be fuelled by the locals and not overseas investors.
Nagalka the actual size of the apartments being built are very large if you actually look at the number of square meters. The flat I bought was a 1 bedroom with an internal size of 55sqm, that could easily be a 2 bedroom apartment in most city centres, and again if you work out the price per sqm it is probably below 1,500 Euro which is still very cheap
Oh and by the way I did not buy my apartment as a company, it seems you do manage to avoid paying the 17% tax by doing so but when you sell you have to pay it then, and if the apartment goes up substantially you will be paying more on the increased value. I was advised not to anyway, but this applies to apartments, don't know about land
It does seem that prices are fueled by locals more so than countries more popular with foreign investors. However....
55 sqm may be a 2 bed in most city centers but we're not talking city center here. If i'm not mistaken this project is on the edge of the city limits and 1.500 Euros/sqm is not very cheap...not even for some parts that are a lot more central.
I'm not sure what the 17% tax is. I was only aware of the 16% capital gains which you don't have to pay if you sell after 3 years and the 19% VAT...which if both buyer and seller are VAT enteties you won't have to pay either.
In any case...£75.877,= for a studio apartment seems very high to me especially for an apartment so far away from the center.
Originally posted by Johnny34567: Mr Bungle the average salary for Romania may be E300-400 pm but not for Bucharest! The average salary for UK is £23k pa but we know London salaries are far higher even excluding the city bankers. Most of the buying frenzy in Bucharest seems to be fuelled by the locals and not overseas investors.
Nagalka the actual size of the apartments being built are very large if you actually look at the number of square meters. The flat I bought was a 1 bedroom with an internal size of 55sqm, that could easily be a 2 bedroom apartment in most city centres, and again if you work out the price per sqm it is probably below 1,500 Euro which is still very cheap
You can find plenty of choice for under 1500 Euro in Bucharest.
There are many places who can give you information, for example the above mentioned Romanian Property Online.
[QUOTE]Originally posted by reader07: [QUOTE]Originally posted by Johnny34567: Mr Bungle the average salary for Romania may be E300-400 pm but not for Bucharest! The average salary for UK is £23k pa but we know London salaries are far higher even excluding the city bankers. Most of the buying frenzy in Bucharest seems to be fuelled by the locals and not overseas investors.
Euro 1500 sq m is way over the odds! You can purchase detached 2 bed villas with land from Euro 521 sq metre. Top price is 759 sq m, but that comes with an option of non status finance on 75% LTV. The development is a 25 min drive from the city centre and is within a gated community. The development is also skirting a forest, but is only 5 miles from the main ring road. Nearest town is Mihailesti which has good amenities see www.iqpropertyinvest.co.uk for more details
Originally posted by Mr Bungle: I have purchased by setting up a limited company... it is a long-winded and relatively costly process (although saying that it shouldn't be enough to put you off). You have to get documents apostiled and stamped by a Public Notary & the F&CO then translated into Romanian etc. You then have to get the company approved by a judge in Romania by using Power of Attorney and finally open a bank account with one of the Romanian banks. Unfortunatly you do have to submit annual accounts so you need to employ a Romanian accountant. I was sent an email by my agent in Romania saying that this costs EURO 60 per month, which seems a lot as the company that doesn't actually do anything!
It was a lot of hassle for me to register a company too. Power of attorney to prepare, was rejected, had to do another one... I am looking for an accountant at the moment. As I bought in Planorama, the apartment will be delivered next summer, in 2008. I explained the accountant that my company did not have any activity. Despite that, one of them wanted to charge me 200 euros per month. For not doing anything!!!!! It seems that as soon as u say that u live in the UK, they multiply their price by 5. One of the accountant I contacted suggested to register the company in inactivity. But I am still looking for an accountant. Anybody knows somebody?
Originally posted by albert hall: [QUOTE]Originally posted by reader07: [QUOTE]Originally posted by Johnny34567: Mr Bungle the average salary for Romania may be E300-400 pm but not for Bucharest! The average salary for UK is £23k pa but we know London salaries are far higher even excluding the city bankers. Most of the buying frenzy in Bucharest seems to be fuelled by the locals and not overseas investors.
Euro 1500 sq m is way over the odds! You can purchase detached 2 bed villas with land from Euro 521 sq metre. Top price is 759 sq m, but that comes with an option of non status finance on 75% LTV. The development is a 25 min drive from the city centre and is within a gated community. The development is also skirting a forest, but is only 5 miles from the main ring road. Nearest town is Mihailesti which has good amenities see www.iqpropertyinvest.co.uk for more details
Planorama that I bought cost 850 eur/m2. This a luxury complex with pool...It is a bit outside the city but they are building a highway near it, and the other tower they are building (there are 4 towers in total) will cost ...1300 euros /m2.
Originally posted by Johnny34567: Oh and by the way I did not buy my apartment as a company, it seems you do manage to avoid paying the 17% tax by doing so but when you sell you have to pay it then, and if the apartment goes up substantially you will be paying more on the increased value. I was advised not to anyway, but this applies to apartments, don't know about la
