Pros & Cons of Investing In Romania

05
Oct
2014
Posted by: Michael  /   Category: Real Estate   /   No Comments

The Romanian market has seen its share of fluctuation due to the recent financial crisis; however, the country still is pretty much untapped and has one of the biggest investment potentials in the region. It may not be a fiscal paradise, nor does it come with a 100 percent guarantee of profit yet it still is an incredibly attractive market that has its own share of unique pros and cons.

One of the biggest pros when it comes to investing in Romania is the low labor cost across all employment fields. Whether it is the construction field, IT or any other potential business, employing highly skilled workers comes at a fraction of costs in neighboring countries, let alone Western European countries or the United States.

One of the biggest cons on the other hand when it comes to investing in this Eastern European country is the high number of taxes. In fact, Romania is one of the most taxed countries in the European Union with little room for change considering the unstable global situation. Along with a lot of taxes there also comes a pretty high level of bureaucracy with the whole tax collecting process being both incredibly difficult and numbingly slow.

According to Bucharestapartment.net, growing demand for residences is one of the major pros in Romania, as a lot of people are moving to its major cities for better jobs, healthcare and schools. This drives demand for new housing making Romania extremely attractive for real estate developers. Major cities like the country’s capital Bucharest or Cluj, Timisoara, Constanta and Brasov have seen a huge increase in new residential spaces.

A con that has to do with the same real estate field is that these new buildings come at reasonably high prices when compared to the local purchasing power. This makes the entire transaction process a slow one, particularly in smaller cities that don’t offer the same job diversity and stability.

A pro is that rent is some of the cheapest out of all European Union member countries with even luxurious flats or large studios barely crossing a two to three hundred euro price tag. For example a short term rental in Bucharest, Romania’s capital and largest city is less than half what it would be in cities like Berlin, Prague or Budapest. This makes even the best, most centrally located and luxurious of properties extremely affordable for any tourists or business that come to the country and provides a strong alternative to owning a home.

Infrastructure has long been one of the country’s major problems and it still is one of the biggest reasons why some companies or individual investors don’t choose Romania as a home for their investments. The lack of a proper highway system and an outdated railway infrastructure makes moving goods in and out of the country a challenge.

Another pro for potential investors is the agricultural potential of the country. With large regions of rich soil the country has an immense potential for growing anything from grain to fruit and since the 1st of January 2014, foreigners can purchase land in Romania under the same terms and conditions as locals.

No Comments