Full of Eastern promise: Romania to boom sooner rather than later
Full of Eastern promise: Romania to boom sooner rather than later
October 2004 Propertysecrets.net
It seems that hardly a week goes by without a flurry of excitement about another overseas destination ripe for property investment.And, without a doubt, the markets that are attracting the most attention for anyone looking for great capital growth are the countries of eastern and central Europe.
Smart investors have known for some time that there are great opportunities in what Property Secrets dubbed the Eastern Eight – those eastern European countries – all of them former communist states – which joined the EU in May this year.
But already the net has spread to include the next wave of EU entrants.
Two important factors
One of those countries, Romania, the Property Secrets team believes, holds enormously attractive prospects for the investor prepared to factor two elements into an investment.
Firstly, they will need to accept the prospect of raising capital outside the country – perhaps by remortgaging existing investment properties on their primary home - because finance is not yet available to foreigners.
This is likely to change rapidly after EU accession in January 2007, if not before. At that time the idea would then be to mortgage the investment unit in order to free up your capital.
Secondly, the real estate market – while expanding fast – is still in its infancy. This adds some complications when buying – to acquire land you need to form a Romanian registered company (buildings can be freely owned). But, again, these impediments are expected to reduce as EU accession gets nearer.
But we also have to bear in mind that Romania is a country unused as yet to doing business the western way. A transaction in Romania does not have to be a nightmare – but it’s wise to bear in mind, for example, that corruption is part of everyday life there.
