Strategy For Romania Properties - First Time Buyers

Investing in Romania Property Market can be very profitable but you have to respect a few rules.

First of all you have to stick to some general successful proved steps:

1. SET YOUR OBJECTIVE

This is an obvious thing but many of the first time investors don't do this as it should be done. There is a difference between buying a house for you and your family and investing in a property only for a profit. There are different strategies if you intend to make a profit on short term or a medium-long investment.

Your main options:

Holiday house. Romania offers some extraordinary tourist destinations. Buying a mountain house is much cheaper then other places and new developments on Black Sea cost are interesting too. Danube Delta is a
fantastic destination with great potential.

Things to consider when buying a holiday property:

- Access. Cheap flights, good roads, train.

- Maintenance. You mast be able to keep your house in good condition with minimum effort.

- Finance. As you don't intend to live there all the time is better for you to rent the property. So you need someone to take care of things. Usually is possible to find or a private person or a specialized company to manage your property. It's harder in case of isolated properties.

Permanent house. An increasing number of foreigners are deciding to move permanently in Romania. They find interesting business opportunities or better jobs in multinational companies. Some of them decide to profit from the booming real estate market and invest in one or more properties.

Buy a property for pure investment. This is the main reason the investors buy real estate in Romania. There are two main options in doing so:

1. Buy to let. You buy the property and then finance the mortgage from rent. In the best scenario you will be able to have a small monthly income if the rent exceeds the mortgage. The profit will be made from increase value of the property. This is a medium-long term investment.

2. Buy to sell. This is a strategy that works extremely well in emerging markets like Romania. In general you put a deposit on a property that wasn't build and sell right before completion or immediately after. The profit emerges in case the property price will increase during it's construction.

Example: Suppose you want to buy a one bedroom apartment costing EUR100,000. Required deposit is 25%. Construction will last 3 years.

Your investment: deposit plus buying cost (estimated at EUR3,000) makes a total of EUR28,000.

If the property appreciate with a 20% annual rate in 3 years you will sale it for EUR172,800. Your profit will be EUR44,800 from a EUR28,000 investment.

In some cases you have to arrange to finance the property before completion and then selling or just assigning the property to another buyer without paying the balance (flip the property).

Some developers will require a different payment structure: 20% down, 20% with foundation, 20% with structure, 30% with roof, 10% with completion. In such cases is possible to get a mortgage that pays out with stages, so all you will have to pay is initial deposit.

Investing off plan has some fantastic advantages but comport some risks too:

- Price will not grow, or worst, it will fall.

- Developer will have problems.

3. Buy to renovate. This can be a very profitable business but a foreigner will always have disadvantages comparing to a local businessman.

2. HOW MUCH CAN YOU SPEND

This is crucial. Real estate is a serious business and it takes money. If you're not careful with your finance you will lose big time.

You mast take a long look at all potential costs. You may be exited by a fantastic penthouse with great view, but have the budget for a two bedroom apartment.

Costs should include trip, hotel, lawyer, agent, deposit, etc. Is possible that you will not be able to finance right away all the mortgage by the rent so consider supplemental monthly costs.

After you figure out what the budget may be add a 5-10% just in case.

3. CHOSE PROPERTY TYPE AND IT'S LOCATION

Romania is a big country offering a big range of real estate opportunities. After general research try to understand what type of property is best for you. This depends much on your objective and budget.

The location of the investment is an important step to your success as real estate investor. Once you get to know more about Romania narrow your search to an area that corresponds better to your personal criteria. This e-book offers you some information to start from. You should look deeper in places that correspond to your specific interests.
You have to remember that Bucharest is offering some fantastic opportunities, but you can find really good deals in other regions of the country.

4. LOOK AT THE DOWN SIDE

There is no such thing as risk free investment. Of course, Romania has potential and you can make good profit from investing in real estate properties, but the risk is always present.

When you decide to invest your contact persons will be the state agent, the lawyer and the translator. They are all paid only if you buy. Even if they are all honest people it will be natural for them to express optimism. You are the one that should be realistic.

5. USE LEGAL ADVICE

It is important to work with a trusted lawyer. He will review the agreement, verify titles, and carry out other checks for your protection.

6. CONTACT AN ACCOUNTANT

Depending on your situation, having an accountant can be very important. If you form a company to invest in Romania properties this is a legal obligation.

Proper advice can determine the best way to invest your money. This depends on the objective, type of property (if you invest in land you'll need to form a company) and the dimension of the property.

7. FINANCE

Consider the options you have. It is possible to obtain finance in Romania, but chances are that you'll get lower loan interests in your home country.

8. GO VISIT

There is no better way to understand a property market than visiting it. The longer you can stay the better. Prepare the trip carefully. Before arriving you should already have a solid idea about the market. You should precisely know what you are looking for (property type, location, budget).

- Make a list of questions.

- Have maps with attractions in the area.

- Dictionary

- Make a glossy for every property that you visit.

- Have a camera to take shots of the property, view from the property and surrounding area.

Rental Properties Offer Owners Tax Advantages

Basic tax advantages landlords receive from their investment in real estate properties are similar to those of every homeowner. These basic tax advantages are the ability to deduct property tax expenses and mortgage interest costs from your federal tax return. Beyond these deductions, as a landlord you have the advantage of many more tax incentives. If you provide utility services such as water, heat and/or electricity at no cost to tenants, tax laws allow you to deduct these costs from the income on the property. Furthermore, all operating expenses for your rental property are tax deductible. This would include maintenance and repair costs such as the expense of repainting the property or replacing windows, gutters and floors. Fees for liability, property and rent loss insurance are also tax deductible.

Thanks to depreciation deductions, landlords are offered tax advantages by the IRS for improving their rental properties. Improvements include installation of a security system, a swimming pool, new furnace or air conditioner, any new appliances or upgrades to the kitchen. Or perhaps you want to add on another room or a porch to the rental home. These also would be considered an improvement, not an operating expense. These expenses may not be written off as operating expenses, they are written off as depreciation of improvement deductions.

Depreciation Tax Advantages are Available Even Without Improvements

Tax advantages offered by a depreciation deduction may seem confusing at first, but should prove worth your time to understand. Depreciation costs are those accumulated by the normal wear and tear of every residential property including rented buildings. Thankfully, the IRS acknowledges the fact that a building depreciates considerably over time and so permits landlords to deduct some of the cost of depreciation every year for up to 27.5 years. Much of these costs do not even require you to spend anything to get back money on your tax return. You simply have to file the cost of depreciation. The only time you will spend money for a depreciation deduction is when you make improvements to the property.

Accounting Fees are Tax Deductible

Most landlords will probably find the assistance of an accountant to be highly valuable at tax time. An accountant specializing in rental property taxes can help you take advantage of all the deductions offered to landlords. If the expense of hiring an accountant is of concern, hopefully you will find relief in knowing their fees are tax deductible. Similarly, the wages of employees hired to help keep books, care for tenants and make repairs are deductable operating expenses.

Careful Record Keeping is Necessary to Receive Full Tax Advantages

While an accountant can be very valuable at tax time, they won't be able to do much without records of your spending and income. Therefore, whether you choose to do your own taxes or use an accountant, always keep receipts for absolutely everything! And, if you want your tax filing process to go most smoothly, keep your receipts organized in one place. What should you keep receipts for? You'll want receipts for office supplies such as desk organizers and notebooks. Keep receipts for the cost of your property advertisements posted in the local newspaper. And do not forget to save receipts for gas and car upkeep if you have several rental properties that you are traveling between.

Bulgarian Properties - Good Things To Know

The Bulgarian real estate agents are very suspicious about the current events on the market in this country. The main reason for their concerns is the unfair practices of some of the real estate agents in Bulgaria, who have picked up the habit of targeting numerous investors from the United Kingdom with overseas buy-to-let schemes. The truth behind this story is a highly dangerous situation for these foreign investors, as even if the Bulgarians are guaranteeing some very attractive rents, the money that the tenants could pay is far more little. As soon as the guaranteed period gets close to an end, these naïve investors may not be able to get anywhere near the guaranteed rent. Not to speak about finding the required number of tenants to fill up their pockets. So far, the most common practice for the developers was to leave guaranteed rental properties inlet or to let them out at rather lower returns. This is the reason why the scariest moment for an investor with no rental demand is when the guarantee runs out.

Therefore, the most important things for the investors to keep in mind is that even if guaranteed return schemes look very appealing at first glance, they can easily end up worse off over the longer term, if they get stuck with property that does not sell well.

They cannot even ask for compensation, as the authorities have often warned property investors about getting involved in this kind of market. The fact is that the developers of property and buy-to-let mortgage products are not at all regulated by any authority.

The rental potential of an apartment in Bulgaria is the only advantage one can get from buying it. The idea is simple: you must only buy the place if you can get your money back from the rents. If you do not have this guarantee, then the property is useless to you.

Should you be thinking to buy an apartment with the single purpose of renting them over the summer period, your time is very short, as there is just four active months summer in Bulgaria.

Sofia, Bourgas, Varna, and Veliko Tarnovo are very large cities in Bulgaria and at the same time, the rents are much cheaper here than in any other resorts. You can even

Another good thing about Bulgaria is the fact that the prices of the land in this country are currently very cheap. You can therefore consider the idea of buying a plot of land here, as the prices are expected to go up in near future. You will then have the opportunity of building your own holiday house, near lakes or in the mountains and not spend a fortune on renting!

Significance of Historic Properties in the Real Estate Sector

The historic properties have much significance in the field of real estate. If you are planning to buy such a property, there are a few things that you should know.

The advantages associated with owning such a property makes the deal a good option for a large number of people. The most important advantage of an historical property is their potential to turn out to be a highly profitable investment. These historic properties can be made to a museum or tourist attraction. Considering the importance of tourism in today's world it would not be a bad option.

Another benefit of having such a property is that it can easily be sold to any of the preservation societies available today. The profit from the deal can be enormous. In some areas, tax benefits are provided for those who want to buy and maintain properties of historic value. Also, there are several options for those who are willing to invest in historical homes. It is possible to buy old stores or barns and convert them to good houses without having to spend a large amount of money.

The information regarding the historical homes and the various ways in which they can be used should be acquired. Professional help can be easily obtained. If you are well-versed with the industry of real estate, conducting a research on these properties would be highly helpful. You have to go through the inspectors, preservationists, historical societies, local as well as national agencies etc as part of your search.

In short, these historical properties can fetch you a good profit provided you acquire the knowledge on the various features concerned. With the availability of all the information, acquiring and maintaining historical properties would not be a difficult task.