Foreigners investing in Romanian property versus investing in your home country

Experienced investment experts believe that the key wealth-building strategy in real estate is leverage (i.e., using mortgages), and for foreigners with income outside Romania, or non-resident Romanians, this is harder to apply in Romania due to the difficulty of obtaining credit. However, there are still several major benefits to buying real estate in Romania, even without easy access to local financing:

Benefits include:

1. Low Entry Cost

Romanian real estate prices are still relatively low compared to Western Europe.  Cities like Bucharest, Brasov, Cluj-Napoca, Oradea, Timisoara or even Constanta offer good infrastructure, vibrant communities, and tourist appeal at a fraction of the cost of similar properties in Western Europe.

2. Rental Yields Can Be Attractive

In areas with strong tourism or student populations, gross yields of 5–9% (or higher for short-term rentals) are possible, whereas the typical long-term residential yield in Bucharest is 6%, while commercial is 8-10%.  In cities like Bucharest, Cluj, Timisoara, and Brasov, long-term rental demand remains stable due to universities and IT sector jobs.

3. Low Property Taxes

Property taxes and transaction fees in Romania are very low by European standards. Annual property taxes are minimal, often less than €100 for an apartment.

4. Appreciation Potential

While past performance isn’t a guarantee of future growth, real estate prices have shown steady growth over the past decade.

EU funding, infrastructure improvements, and tourism growth suggest room for further price appreciation, especially in central and western Romania.

5. Relocation or EU Residency 

Buying property in Romania can be a step toward residency, especially for EU citizens or digital nomads.

For non-EU citizens, owning a property can support a long-stay visa application, though it's not a guarantee on its own.

6. Personal Use & Lifestyle

If you're planning to spend part of the year in Romania, having a home base (especially in scenic places like Sibiu, Brasov, Oradea or near the Black Sea) is both convenient and cost-effective.

7. Diversification

Holding real estate in Romania can be a hedge against inflation or currency risk and offers geographic diversification in your portfolio.

Limitations to Consider

Harder to obtain a mortgage = reduced leverage = slower compounding, unless you have income in Romania from which to obtain mortgage finance.

Legal and bureaucratic complexity may require local representation or legal help, but there are many quality, affordable providers of such services.

Liquidity: resale can take time depending on the market and location, but in a key location, this can be done very quickly indeed.

Property management may be required to manage rentals from abroad unless you hire local services, but White Mountain Property is one of your options for this in Bucharest and Brasov, for example..

Summary

If your main objective is capital growth through leverage, and you cannot obtain Romanian mortgages at local market rates, Romania may not be ideal. But if you're looking for a combination of growth, diversification, lifestyle, stable income, and long-term value, it is still a very smart investment—especially if you choose locations wisely.

Contact damian.galvin@whitemountain.ro for more information if required.

 

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