Thank you David! You are very precise in what you say.
To give the people visiting this website only one example of what Transylvania Investment could achieve so they may form an opinion on the opportunities offered by the Romanian market.
Last summer we got a client who bought with us a flat in the Old Quarter of Brasov for 105k. The place was not in the best of condition so he renovated it, which cost him about 15k (including new furniture and not cheap Ikea standard). In the middle of the renovation he decided to resell since he found a better deal and teamed up with a friend to buy in Cluj. So we resold the flat three months later for 150k to a fellow who will probably resell it in 2 years for minimum 200k and in mean while we rented the flat enabling him to cash a very nice rent that covers the mortgage he got in order to buy it. The man, who bought the apartment for 105k, got a cute commercial in Cluj and now cashes a lovely 10%annual rental return, which is more than okay and keeps both owners and tenants satisfied and in a long term business relation. So our man, not only that he hadn’t lost a penny, but also made a profit of about 4k after paying taxes and notary (giving the fact that he put 15k in the renovation). Had he started a company in order to buy this transaction would have been meaningless as it would have cost him 52,5k.
The morals:
Anybody shouldn't feel or end up in the situation of making a loss if they want to get out of a deal for various reasons, regardless they need to get rid of what they bought the next day or in 3 years time. Anything you buy today you should be able to resell tomorrow and for a higher price than the purchase price.
I also very much doubt there is such thing as 15% rental return on residential properties in Romania, particularly for the newly built, outside town properties, so good luck to all who placed their money into off-plan developments under this illusion.
Anyone imagining money can be done "bang!" in a second, should not cry when loss appears instead of the desired gain. Investment is not the National Lottery!
Quote:
Originally Posted by David howe
Unfortunately a lot of pople do not look into investment. Your figure of a return of 150 on 105 in 3 years is not appealing to speculators. Why would they buy of you at this and only return around 40% when they can buy from a certian well known company that says they will get them 40% a year and puts them up in a flash hotel and ferries them around in flash cars.
To a true or semi educated investor this represents a realistic return and one which you state with confidence. In addition and with all due respect you have also failed to mention this person will also get an additional 15% rental return in this period which brings your return up to 55% which in my or any informed persons opinion is very desirable. Put 40% deposit down se rental return to pay mortgage and you have just given people a return of over 30% per year on their money and you did not have to lie or deceive anyone.
Unfortunately many of those you speak of are not as knowledgeable as we are and rely on the information suppied by an agent who even on some occasions actually believe what they are saying as they have been taught this as fact to be more convincing to the speculator.
The reality is people are being deceived and that is sad regardless. What is sader is the people who you mention that are slatting Romania and the opportunity here when this market offers such potential. This makes us all guilty by association and hence the need for people like us to make people more aware, espeially to the fact that this has nothing to do with Romania, but sheer greed by unsrcupulos agents who on so many occasions are not Romanian, but can be found in a cheap suit, fake rolex and flash motor and is imediately the investors new found best friend.
Hopefully at least one person reading this will take stock and look at alternative investments/agents with effect some of these agents will be denied their huge profits that are so often extracted through deceit.
What people need to realise is, when people get something that is to good to be true, it rarely is true! Therefore anyone considering buying an investment property anywhere should take the time to examine it in the same way they would a second hand car. Speak to an independant expert or carry out their own due dilligence, those few extra hours work will reward you well. I currently have 8 people who bought in a development in Bucharest through a company that holds themselves out to be property professionals and what that company did to these people is criminal when there was so much opportunity in the market.
For anyone wishing to buy in Romania I would ask that they be not desuaded from buying due to the negativity that is occuring in this thread. The potential is here the same way as there is in buying a 2nd hand car from a reputable dealer or friend as apposed to buying the luvely motor from the Arthur Daly character.
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