Investors in Romania entering the property investments showed an increased interest in speculative investments, i.e. buying a piece of land, converting it from agricultural land to buildable plots with a view of selling it with big profit. This was true for a short period, but with the world economic crisis, the situation on this kind of investments deteriorated sharply. The result now is that the demand for such properties is very limited and most investments are blocked at present, and the investors are waiting for improvement of the property market in order to sell without loss.

Contrary to the above kind of investments are the proper investments with income and prospects of capital appreciation in future. For example now with the crisis, an investor can buy in a good location in Bucharest an office or shop for 1,000.000 euros with a rental giving 10-12% (or even higher) return on the investment. Investors who invested in such kind of properties even before the crisis did not suffer substantial loss, because rentals in good locations for such properties may have fallen 10-20% still giving a satisfactory return.

One who buys now, has good return, and good prospects for capital appreciation, as the property market in Romania shows signs of recovery (as happens with other sectors of Romanian economy).

 

ANDREAS KAKOFENGITIS is Chief Executive of Bestservus Group, a qualified accountant and banker with long experience in the financial sector in Cyprus, England and Romania. He is also a humorous guy with a lot of stories to share.
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