23/08/07
An FAQ Compilation on Property Investment in Romania
1. Why Invest in Property?
The property business is a financially rewarding and exciting one (providing the right property and location are chosen!). Property can produce a sizeable lump-sum or a consistent, long-term income when purchased for Resale or Buy-to-Let, respectively. Historically, property has doubled in value every seven years. Also, unlike the stock market, property price increases can be predicted over the long term with reasonable accuracy. No wonder property investment is now seen as the best way to provide long term financial security!
2. Why does PIE mainly specialise in 'off plan' properties?
By working directly with developers, we have exclusive access to property opportunities long before they have been released to the general public. We obtain property at its lowest price and negotiate substantial and genuine discounts from current market value. During the construction phase, the value of the property continues to grow (usually from 15-35%), so not only do you benefit from the initial discount but also from the capital growth. Therefore, off-plan buying through us provides you with maximum return from your initial capital invested.
3. How do I start?
You can speak to one of our Property Consultants by calling 0207 712 1604 or you can register online using our contact form and we will call you at your specified time. Your Property Consultant will work closely with you to help build your property portfolio and keep you updated whenever a new investment opportunity meeting your requirements arises.
4. Should I view the property before I reserve?
The majority of our seasoned investors never see the properties they purchase, relying instead on the due diligence we have carried out. However, if you are a first-time overseas investor we recommend taking an inspection visit so that you can get a feel for the location, meet our staff on the ground and have an opportunity to enjoy an exciting visit to Romania.
5. How do I reserve a property?
You will need to call your Property Consultant on 020 7712 1604. A reservation deposit (typically €3,000) will be necessary to secure the property. The reservation fee can be paid by credit card with the payment processed by HIFX, one the UK 's most reputable currency converter companies.
6. When will I be required to exchange the preliminary contract?
You are usually required to exchange contracts within 28 days of your solicitor receiving the contract. Please ensure you exchange within this time frame or the developer could withdraw the plot and you may lose your reservation deposit.
7. What if I decide not to proceed with the purchase?
Unfortunately the reservation deposit is non-refundable. This is why prior to reservation we will ensure that the property is suitable for your investment needs and budget. If some unforeseen circumstance prevents you from proceeding with the purchase, we will endeavour to get your deposit returned but the result will be entirely up to the discretion of the developer.
8. Can you recommend a solicitor?
Yes, we work very closely with a number of independent, experienced and professional firms of solicitors who work at discounted rates for our clients. By using one of our recommended solicitors we can help ensure that your investment purchase is straight-forward and proceeds without delay.
9. What if I want to use my own solicitor?
You can of course use your own solicitor but please ensure that they are able to meet the 28-day exchange deadline.
10. Should I set up a company in Romania?
Setting up a Romanian company was once advisable as payment of VAT (19%) was not required for property purchases through the company. However, the law has changed since January 2008 and companies are subject to the same VAT as individuals. Therefore setting up a company no longer presents an advantage from a tax point of view. However, a company is still required if a foreigner wishes to purchase land.
11. Are Romanian mortgages available to foreigners?
Yes, Romanian banks that offer capital to foreign investors include Piraeus Bank, Volksbank, BCR Bank and the independent mortgage broker Imobilia. Note that Romanian government restrictions on borrowing mean that no loan is allowed to exceed 85% loan-to-value. However, this should not prove an issue as a property down-payment typically exceeds 15%.
12. Can I exchange contract without a mortgage offer?
Yes you can. However, we recommend that you apply for an agreement in principle (where possible) with one of the banks, so that you are aware of all the costs involved.
13. Can I sell my property prior to completion ('flipping')?
Yes, you can as long as you have agreed with the developer that your contract is 'assignable'. As this is a developer-specific issue, you will need to contact your property consultant to determine what the situation is. When you do sell your property, we can provide introductions with local sales agents or advertise the property on the PIE website.
14. What are the costs of dealing with Property Investment Expertise?
There are no costs associated with working with PIE. There are no finder's fees and all information on our developments is freely available on our website i.e. no need to register first.
15. Is now a good time to invest in property?
We believe it is always a good time to invest in providing your property has been carefully selected and you are buying at the right price in the right place. Our mission is to ensure you are consistently presented with best investment opportunities in the single most profitable overseas territory, which is currently Romania. Contact us today and let us help you secure your slice of the overseas property pie.