Foreign Investors Attracted by Romanian Apartments

Romanian apartments are attracting overseas property investors where they can enjoy a yield of 5-7 per cent.

Romanian apartments are available at low prices compared to many other European markets, therefore making them more accessible to investors, some of whom are purchasing blocks of 10-20 apartments to rent out as investments.

According to Biris Goran law firm representatives, small investors come to stay for the long term on the market, and usually, a transaction takes around one to three months. They are also opening companies to make the purchases.

The companies founded by small overseas property investors to purchase apartments on the Romanian residential market, pay taxes like Romanian ones. Profit or turnover tax, income tax, VAT, local taxes.

Large discounts can be available for multiple purchases when made off-plan, but even on completion discounts of 5-10 per cent can be achieved.

Although most of the Romanian apartments purchased tend to be in the capital Bucharest, mountain areas such as Brasov and Poiana Brasov are also popular among buyers.

Other areas of the country generally accepted as property investment locations are Ploiesti, Constanta, Cluj, Oradea, Brasov, and Timisoara or the Transylvanian countryside which offers an alternative option for people who are looking to buy up old rustic properties at bargain prices to refurbish and transform them into tourism units.

Compared to the boom period of 2006-2008 where large foreign investors were buying up thousands of Romanian apartments at a time, this new activity is coming more from small to medium investors.

The number of residential constructions in Romania reduced by nearly a quarter in the first four months of 2018, which could create a shortage of suitable apartments on the market, causing upward pressure on both rental prices and property values.

It seems that Romania is making a comeback on the overseas property investor market, with Romanian apartments available at discounted prices offering attractive rental yields.