| I have to admit it. I had almost no knowledge of the | | | | Carpathian Mountain range in the fairy tale land of |
| country of Romania just five short years ago, when I | | | | Transylvania. In between is just about a little of |
| came here for the first time. What came to my mind | | | | everything else, from natural healing springs, to flatlands |
| were images of Dracula, Frankenstein, and | | | | highly suitable for agricultural use, to a host of medieval |
| under-cared for orphaned children, the kind that were | | | | and modern cities such as Sibiu, Cluj, Brasov, and |
| featured in fund-raising specials that appeared on | | | | Timisoara, which is perhaps the most Westernized of |
| television when I was a kid. At least I can say that I | | | | all Romanian cities.I spoke with a number of real estate |
| knew for sure that it existed, and so did it's province of | | | | experts about what the best speculations for the real |
| Transylvania. That's partially contrary to what I was | | | | estate investor would be, asking questions like cost of |
| taught in elementary school, by the way, when our | | | | entry, minimum length of time for investment to mature, |
| teacher assured us that Transylvania was only a | | | | etc. All seemed to agree that land, all over the country, |
| storybook land and therefore we need not be | | | | was the best bet. Only one problem though. Foreigners |
| frightened that the horrible creatures that inhabit it | | | | can't own undeveloped land without an attached |
| actually exist!Today, five years later, I have a radically | | | | dwellingHowever, I discovered a loop-hole that not only |
| different and much more well-informed | | | | allows the foreign investor to own land but also to |
| view of Romania. The things that used to come to | | | | diversify his investment portfolio, if he wishes, and |
| mind about this country, | | | | invest in the the three hottest areas of Romanian real |
| rarely do anymore. When I think back about my old | | | | estate at the same time - land, homes, and office |
| preconceptions of Romania, | | | | space. It's called a REIT- Real Estate Investment |
| it never ceases to take me aback the great | | | | Trust.A REIT is a security that sells like a stock on the |
| difference between the infamous | | | | major exchanges and invests in real estate directly, |
| legends and surprising reality about this country.Now, | | | | either through properties or mortgages.REITs receive |
| instead, I am captured by many of the same things | | | | special tax considerations, and typically offer investors |
| that ancient Roman emperors like Cesar and | | | | high yields as well as a highly liquid method of investing |
| Napoleon found so alluring about this place. (Romania | | | | in real estate. |
| was a part of the Roman Empire and takes it name | | | | The REIT concept is in action in Romania by a |
| from the Latin word for Rome.) From incredible natural | | | | reputable American firm and is designed specifically for |
| resources to majestic mountain and seaside | | | | the purpose of enabling foreign investors to have the |
| landscapes, Romania is a place that has a little of | | | | opportunity to invest in Romania's greatest real estate |
| everything you would find elsewhere and a number of | | | | opportunity (land) and to diversify their real estate |
| things you can't find anywhere else. And as for | | | | portfolio, even with minimum funds for investment. (The |
| Transylvania, my teacher was right on one point - it is | | | | usual entry investment is 25,000 Euro.) Investors should |
| a storybook land- but, on the contrary, for it's beauty | | | | be willing to hold there money in the portfolio for about |
| and that of it's people.Ultimately as concerns Romania | | | | 5 years. The yearly gains over that period of time are |
| though, the most important discovery I made in my | | | | expected to be quite significant and investors who |
| search for the truth about this land of legends, is the | | | | currently have invested in an REIT have already made |
| tremendous real estate investment potential that exists | | | | considerable returns on their investment.A more |
| here.Romania presents the investor with an | | | | explanatory overview is available for those |
| exceptional opportunity to benefit from the ascension | | | | interested.Another promising development for |
| of an eastern block country to the European | | | | Romanian real estate is created by the construction of |
| Community. The timetime line this opportunity, however, | | | | a new 2 billion EURO super-highway being realized |
| is limited. Romania is one of the last European | | | | with the financial backing of the EU. This new |
| countries in ascension talks with the EU and it is | | | | super-highway built with the technology of the |
| projected to enter in either 2007 or 2008. The | | | | American firm contracted to complete it by the year |
| expectation around this hallmark event has resulted in | | | | 2010-12 will dramatically change the face of Romania. It |
| much needed economic and government reform, | | | | will cut the travel time between Bucharest and major |
| making conditions more suitable for foreign | | | | European cities down significantly and literally create |
| investment.The pre-ascension excitement has also | | | | new major destinations in Romania, overnight. Cutting |
| given way to a dramatic increase in real estate prices | | | | through the Western portion of the providence of |
| in recent years, especially in major cities and tourist | | | | Transylvania, numerous towns and potential resort |
| areas. For example, a friend of ours bought a | | | | districts abounding in raw natural beauty with |
| 2-bedroom apartment in central Bucharest in early | | | | mountains, springs, and rivers will suddenly be centrally |
| 2002 for $25,000 USD. Today his apartment is valued | | | | located. Rather then remaining isolated, somewhat |
| at 75,000 EURO ($100,000 USD) and the amount of | | | | hard-to-reach hidden treasures, these gems of Mother |
| interested buyers is more then sufficient.So much so, | | | | Nature will now be as close as turn on the off-ramp. |
| that potential buyers have actually posted | | | | Truly, many of these locations surpass the potential |
| advertisements on the entry door to his apartment | | | | found in the current tourist areas that are easier to |
| building stating that they are eagerly looking to buy an | | | | reach. |
| apartment in the building or a nearby one. This friend of | | | | .The ability to start an inn or bed & breakfast in one of |
| ours can choose to sell his apartment today at a | | | | these areas is ripe. We even know of a top |
| significant profit or hold on to it until closer to the actual | | | | Bucharest hotel chef ready to pack his bags and |
| ascension of Romania to the EU, allowing him to | | | | commit his energy to starting a restaurant in one of |
| benefit from the greatest possible appreciation in value | | | | these new destinations for a small piece of the |
| of his property. During the mean time, he could | | | | potential profit he believes it will yield. Those who are in |
| continue to rent out the apartment at 700 EURO | | | | Romania, know the market, and have seen what has |
| ($890 USD) a month or get in on the burge oning | | | | happened thus far, have little doubt what the future will |
| short-term rental market which offers an alternative to | | | | yield and are ready to do almost anything to get in on |
| the over-priced hotel room rates in the city, and with a | | | | the action. |
| pretty good occupancy rate, rent the apartment on a | | | | For those who are looking to relocate, the |
| daily or weekly basis at 50 Euro per night.Our friend is | | | | opportunities likewise are great. This is the chance to |
| just one of countless foreign citizens and Romanians | | | | live in the best of both worlds - old and new - and |
| who have already profited greatly from investment in | | | | position yourself and your loved ones in what will be |
| the Romanian real estate market. Yet, as you will soon | | | | one of the biggest member countries of the European |
| discover in this article, there are still better deals out | | | | Union.An American friend of mine owns a beautiful |
| there to be had then the one he and others have so | | | | home in a lakeside suburban community with a |
| far benefited from. | | | | wonderful view over the lake and 2000 meters of |
| While the prices have already jumped significantly in | | | | land. This two-story home with three bedrooms cost |
| recent years, the near-certain speculation is that they | | | | him about 150,000 Euro to build. The premises also |
| will continue to rise dramatically until the time of the | | | | contain an outdoor kitchen, orchards groves and |
| ascension of Romania into the European Union. The | | | | gardens. In short, a dream home.By deciding to build his |
| certainty of this speculation is bolstered by the 10% | | | | dream home outside of the city, about 25 minutes |
| rise in cost of houses, apartments, and property in | | | | downtown Bucharest, in what Americans would |
| Bucharest over the period of December 23, 2004 and | | | | consider a nearby suburb, my friend not only saved on |
| January 5, 2005. With the amount of interested clients | | | | land costs, he also set himself up for a great growth in |
| sufficiently high this means that an investor could have | | | | value.As he put it, draw a circle around any Western |
| bought and sold a property and made a 10% profit in | | | | European city of 25 kilometers and you have the city's |
| less then 2 weeks in the Romanian real estate market | | | | suburbs. As Bucharest continues to expand this area |
| while he or she was celebrating the holidays with | | | | will become a centrally-located, well-saught-after |
| family or busy skiing.. | | | | suburb, especially with the large lake and forest that it |
| The amazing reality is that such opportunities for | | | | contains.. |
| substantial profit continue to exist, for now at least, | | | | There is still a limited amount of property available |
| here in Romania. In the capitol city of Bucharest, deals | | | | both in this and neighboring communities for |
| can still be found for investors with ready cash from | | | | construction of similar homes. The best bet seems to |
| sellers looking for quick money. Another great | | | | be the build your own home with a reputable |
| speculation is office space in Bucharest. At 1.2 Euro | | | | construction firm, according to your tastes, and pocket |
| per square meter, Bucharest is now close to the cost | | | | the savings that this effort will yield for you.A home in |
| of office space in Vienna which is currently at 1.8 Euro | | | | the suburbs, of course, is not for everyone. The true |
| per square meter. These prices continue to accelerate. | | | | romantic may be more intrigued by a "conac" the |
| Such opportunities though are only the beggining. | | | | Romanian name for a cottage of the aristocracy of |
| While the general over-evaluation of real estate in | | | | the Country at the turn of the 20th century where |
| Bucharest has caused prices to rise and made the | | | | gentry would spend their weekends and summers |
| average cost of entry higher then just several years | | | | sipping wines from the surrounding vineyards as well |
| ago, this very reality, gives clear indication that clever | | | | as the basement vaults. |
| investors can continue to benefit from this | | | | .These home often need a little fixing up, but are |
| over-evaluation of property value in the mayhem | | | | worth it as the lingering aroma of the wine harvested |
| surrounding Romania's anticipated EU entry.It is | | | | on their estates and spirit of days gone by continue to |
| generally held that prices will continue to rise sharply | | | | fill the premises with an air of magic. |
| until leveling off, or perhaps dropping slightly, after the | | | | For the cost of an acre in the Napa Valley (or |
| entry of Romania into the European Union. This has | | | | probably less) you can have a functioning |
| created a short time period in which investors can yield | | | | micro-vineyard and getaway home located in the |
| serious turnaround on their investments and those | | | | Romanian wine country, situated in the steppe to the |
| wishing to relocate can do so while getting in at a | | | | Carpathian mountains, a short drive from |
| good bargain.The best bet for investment oriented | | | | Bucharest.Another alternative would be a mountain |
| apartment-hunters in Bucharest today is high-end | | | | home or getaway which be had from anywhere from |
| luxury apartments. The potential for profit off of lower | | | | 20,000 Euro and up. A superb villa in a choice location |
| to middle end apartments has began to tweak off as | | | | would be about 100,000 Euro. Most such homes come |
| prices have already risen closer their final expected | | | | with spectacular mountain views and often with other |
| levels. A luxury apartment however, which can | | | | natural beauty close by or on the grounds of the |
| currently be had for between 120 to 200,000 Euro (2-3 | | | | property, such as fragrant pine tree forests and |
| bedrooms), will likely climb in value 10-20% a year, over | | | | meadows.Romania offers excellent services and |
| the next two years leading up to EU ascension. By | | | | conditions for expats. The general cost of living is |
| looking at the price of luxury apartments in any | | | | much less then in the European Union and allow the |
| European Union capitol city versus Bucharest, the | | | | non-European the chance afford-ably stake his claim in |
| capitol city of Romania, one can observe the great | | | | the European Union and establish a life in what will be |
| disparity in prices which still exists at the moment | | | | a flourishing European superstate. |
| between the luxury apartment market here verses in | | | | Whether one is looking for a short-term investment |
| EU capitol cities. While the investor waits for his | | | | turn-around in an European capitol city like Bucharest |
| investment to mature he can rent out his apartment | | | | or to start their own resort inn in the breathtaking wilds |
| for 1,500 to 2,000 Euro per month, further adding | | | | of Transylvania, opportunity is readily available for the |
| significantly to his overall profit. The number of | | | | serious-minded investor.This opportunity which is |
| multi-national companies present in the city makes this | | | | available in the present is akin to that which was |
| a relatively easy sum to get for such a place on a | | | | available in the Czech Republic 10-12 years ago. Many |
| rather consistent basis. | | | | speculate, based on Romania's size and natural assets, |
| . At this point it stands to mention that any real estate | | | | the future yieldings will actually end up being much |
| purchase made by a foreign individual can be financed | | | | greater.These opportunities will not last long. As the EU |
| by leasing available through only one Romanian | | | | accession gets closer and the new highway is paved, |
| company, as long as a 20-30% deposit is initially | | | | the potential for revenue-making that currently exists |
| made.While Bucharest abounds with investment | | | | will clearly subside and diminish. For those who missed |
| opportunity, the opportunities outside of the capitol are | | | | out on investment in the Czech Republic and Hungary |
| also ripe with potential for significant profit matching or | | | | and don't want to miss out again, the time is now in |
| exceeding that of Bucharest. Romania offers a | | | | Romania.Kevin Stillmock has been involved in real |
| diverse landscape ranging from a large stretch of | | | | estate investment since 2000. |
| seaside along the Black Sea Coast to the impressive | | | | |