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5 Reasons to Hire a Property Management Company

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hand holding a house

Initially you may consider yourself a handy-person for property repairs or that you have the time to deal with what you might imagine are the possible requirements of a landlord.  Perhaps also, you live close to the investment property and feel you can respond quickly and effectively to any needs of the property, or tenants. However there are five key factors to consider before you take on this new role. If financial savings and time are valuable to you, it might be helpful to contemplate the following benefits of hiring a Property Management Company.

  1. Savings

Rental Rates

No one is better placed than a property manager to know what the right rental price is. Their deep and thorough knowledge of the area and market mean they are best equipped to find that crucial balance. The word is balance, knowing that price that maximizes monthly income, while also ensuring the property remains occupied. Through experience they are also well placed to be able to anticipate any movement in the local rental market. They also have the tools to conduct an accurate market study.

Collection of payment

Perhaps you are in a situation where your number of income properties is limited for now, perhaps you own one, meaning the payment and arrival of rental funds is crucial to your finances. Perhaps the funds are set up and organized to contribute towards mortgage payments, or similar. Managing the property independently can create in your mind moments where you need to check or might consider if the payment will arrive on time. Perhaps historically, or in sensing the quality and behavior of the tenants, you might consider that payment is not a concern. However instead of being on the frontline of this monthly deadline it might be wise to consider that a property management can take the lead here and take away that itch.

Marketing & Advertising

Huge plus value here for hiring a property management company. With today’s quick and simple use of apps and websites, it can appear an attractive option to handle marketing and the placement of any adverts. However, the elements involved, be it photography, or website choice, the use of language, key words, timing, overall presentation, and tone, might all be best placed in the hands of experts who have a deep understanding of what attracts serious prospective tenants. Long vacancies are the nightmare of any landlord. A good idea might be to know that you have put your best foot forward from the very start.

Charges

Property management companies normally set up their charge as a percentage of the monthly rental rate of your property. Typically fees run anywhere from 10-12%. Normally a contract with a property company might last 12-24 months, with opportunity to extend.

It is important to establish from the outset what services are included. It may be that some maintenance costs are included in the monthly charge, allowing for individual billing of other charges.

  1. Tenants

Finding the right tenants

Instincts are a wonderful tool and there is something to be said for the feeling that leads to a decision of selecting tenants when managing a property independently. However emotions and the like can get the better of our own judgment. A property management company can offer the same initial process as you might, but then through their handling of the screening process that can sift for the best possible tenants. Normally any screening would encompass a criminal record check, security screening, and credit checks. This method allows for the element of surprise to be limited to a much lower percentage.

Managing tenants

Once the tenants are inside the property the more savings and the value of using a property management company are discovered. Property damage, faults, accidents, repairs and all managed at this first point of contact. Management companies are also experienced and prepared to handle any conflicts that arise, as well as having a clear and sound knowledge of the law, and how it might direct any response to matters.

  1. Time

Vendor relationships

Here is another big value area for hiring a management firm. It is practically impossible to compete with a property company in this area where they have an up to date portfolio of trusted maintenance specialists, tradespersons, contractors, vendors and suppliers. Crucially many of these contractors will also prioritise their availability to property companies for obvious relationship building. Property management companies have the added ability to oversee, manage and follow up on your behalf any works. They should also keep on top of which companies can offer the highest quality and cost value in a changing market.

  1. Compliance

Owning numerous or even one investment property will mean you will require a number of calendar or reminder updates throughout the year. To stay compliant with any legal or regulation deadlines, or expiry dates, might be very taxing. Avoid lawsuits, headaches, and have peace in knowing the technical structure of a property management company enables your properties to stay fully complaint with the law.

  1. Geography

Managing your own property might restrict the geography choices you have as a property investor. Using a property management company can allow you to spread your net further. There may be the possibility of an excellent investment opportunity further afield, but the distance from your own location means you chose not to invest. Using a property management company here allows geographic freedom.

Hassles and headaches are inevitable, but using a property management company provides an excellent buffer. No property management company can take away, or eliminate the ultimate responsibility you, the landlord holds, but they can definitely lighten the weight on your shoulders and provide true value.

Can a Foreigner Own a Property in Romania

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business man and house

If you are a foreigner and you want to buy property in Romania, you need to find out what rights and obligations you have. Although the Romanian Real Estate market is flourishing, it might be tricky to have your own place, depending on your citizenship.

Starting from 2012, citizens from EU and EEA can obtain a place to live in Romania in the same way as any Romanian citizen. They can buy, receive it as a donation, make an exchange or inherit it (but not by legal will). However, regardless of how they got the property and what kind of property it is, it can only serve as a secondary residence. Also, from the beginning of 2014, EU and EEA citizens can obtain, in any way, agricultural lands, forests and forest lands.

In the case when the foreign citizen wants to buy any property in Romania without a Romanian Personal Identification Number, a Fiscal Identification Number is Necessary. The PIN can be obtained easily by the foreigners who have a residence permit in Romania, either for study, business, research or as a family member. Apart from this, there is nothing special required from a foreigner citizen for the transaction; he can buy or sell in the same way as a Romanian citizen, and he will pay the same taxes for the government, seller and notary.

For the citizens who are coming from countries outside the EU or EEA, things are more complicated. In most cases, they can only have the right to own the construction, but not the land itself. There are a few countries that have a special agreement with Romania regarding this issue, but most of them don’t.

For example, a citizen outside the above mentioned areas can not own a land and the house that is built on it. He can obtain the right to use the house and the land, but only as long as the house exists on the land. In the moment the construction is no longer there, his legal rights over the land stop. The same rule applies regardless the type of construction or land that he wants to buy.

The laws stated above only apply to natural persons. For commercial enterprises, the entire process tends to be easier. According to the law, they can obtain easily the right to own, buy, sell or use different types of properties, as long as the properties are necessary for their activity. There are, on the other hand, some risks when it comes to owning a property in Romania in the case when the activity of the enterprise stops, so a lawyer should be consulted.

Citizens of any country who want to buy a property in Romania and obtain a business Residency Permit, need to apply first for a Business Visa and to prove that they are planning to start a commercial activity on the territory of the country. They can submit their documents in their own country, at the Embassy of Romania. Once they obtain the Visa, they can apply for a Residency Permit in Romania at any Immigration Office.

Before starting a transaction with any kind of property in Romania, it is recommended to discuss with a lawyer and understand what are your rights and obligations through the entire process. Also, If you do not have a Residency Permit in Romania, make sure you follow all the legal steps to obtain a Fiscal Identification Number before you attempt to buy a property. Otherwise, any contract you sign is invalid and you can easily get trapped in a legal situation.

Necessary Documents for Buying or Selling Apartment in Romania

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stack of paper documents and files

In the past few decades, Romania has become a hub for foreigners who want to purchase a house or an apartment in the midst of the beautiful Romanian capital. However, many are afraid of the famous bureaucratic system of Romania that they will have to go through in the process of buying or selling an apartment in this country. At the same time, many are afraid of the language barrier that may exist when trying to understand what documents they need to submit in order for the transaction to be legal. In order to help you get an idea of the documents you will need and to save you a lot of time and money, we comprised a list of all the steps you must take and the documents you will need to have when buying or selling an apartment in Romania. Without further ado, here they are:

  1. Deciding on a price for the apartment

If you are selling an apartment, decide on a reasonable price to attract customers, but also make sure you make a profit. In recent years, average price for an apartment increased by 10-20 percent. The key is analyzing the market and understanding the price that others are selling their apartments for.

  1. The paperwork needed

Here comes the ”fun” part. There are many documents you will need to have with you or obtain from various Romanian institutions. Here they are, listed:

  • Your ID card, both a copy, as well as the original;
  • The marriage certificate or the divorce sentencing, both a copy as well as the original;
  • The documents that show that you own the apartment. Here we can count a contract of sale, an order from the court, a donation contract and so on;
  • The cadastral plan and the real estate registration in the real estate registry (Cadastru);
  • Real estate register excerpt that shows how many properties you have in your name, including the apartment you are currently trying to sell. This excerpt is given to you by the notary which will validate your sales contract from the Cadastral Office and it is valid for 5 days after the notary applied to receive it;
  • A fiscal certificate which is released by the Office of Local Taxes from the county or sector where your apartment is located. This certificate is valid for 30 days after it was released;
  • If your apartment is located in a block of flats, then you will also need a certificate from the association of all those living in the block of flats. This certificate essentially confirms the fact that you paid all your bills on time and that the new owner will not be forced to pay some of your previous bills;
  • The last document you will need is a document that attests the energetic performance of the building where your apartment is located. In order to do this, you must talk to an expert in this field who will then analyze the apartment and issue a document that will attest the energetic performance of the building and where he or she will also recommend various ways of improving this performance and of saving money on the bills;
  1. Settling on a price and signing the pre-contract

After you gathered all the documents listed above and after finding a buyer, you must settle on a price and sign the pre-contract. The pre-contract is basically a document signed by both parties where they agree on:

  • The money sum that will later be paid by the buyer to the seller;
  • The manner in which the money sum will be transferred from one party to the other;
  • The date when the official contract will be signed;
  • The date when the seller will leave the apartment and the buyer can move on;
  • The advance sum that the buyer must pay for the apartment;

Make sure you sign the pre-contract in the presence of a public notary and do not hand over the original papers to the buyer! Never trust a person with your original documents on the apartment. They are very hard to gather them all after that, not to mention very time consuming and expensive.

So there you have it, these are the main documents that you need to have with you if you plan to sell your apartment. Likewise, if you want to buy an apartment, makes sure you ask the seller to provide you will all of these because each document has its own purpose and you don’t want to wake up with surprises down the road.

Vivenda Residencias Project

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The real estate market in Bucharest and the rest of Romania registered an impressive growth in 2014, despite what some specialists predicted as another year of stagnation. The new optimism found in the market has led to investors reconsidering or restarting projects which were flat-lined when the financial crisis hit the country in 2008 and 2009.

The Spanish developer Hercesa for example has announced it will restart investments in the Vivenda Residencias project located in the eastern part of Bucharest. This would mark the third part of the project and will mean that work should begin on 66 apartments consisting of 2, 3 and 4 bedrooms.

The project was started back in 2007, with 420 apartments being built and sold in the meantime. The Spanish company announced a new stage in the project, with work scheduled to begin sometime between August and September 2015. This new phase would have 2, 3 or 4 bedroom apartments with no studios and will consist in 66 units.

Hercesa has already announced the price range for the new Vivenda Residencias apartments. They start at 55.400 euros without VAT for 2 roomed apartments with 46 usable square meters. A price of 83.000 euros without VAT will be asked for 3 room apartments with a surface of 74 usable square meters. The site is situated in the Eastern part of the city on Basarabia Boulevard. When completed, the Vivenda Residencias project should offer 1.400 high-end apartments, dedicated to middle and upper class income individuals.

According to market analysis, Hercesa came onto the Romanian real-estate market back in 2004. It is estimated that since then the Spanish developers have spent over 150 million euros on land and development. Hercesa sold a 13.000 square meter plot of land next to the Basarab Bridge and Carrefour Orhideea to an association of local businessmen in 2014. The Spanish developer was initially planning on starting a new residential project in the area but plans were suspended when the financial crisis started and were never picked up. The transaction value wasn’t made public, however, market specialists estimate that the total cost exceeded 5.5 million euro.

The same Spanish developers inaugurated the Cismigiu Hotel back in 2014. The hotel is set in a stunning historical building in Bucharest’s center. The total investment is estimated to be around 15 million euros with income for the first year being expected to be between 1.5 and 1.8 million euros.

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