Investment: Buying a piece of land – based on our own experience, land was and is still the best performing investment in Romania. As well as the golden rule – “never buy land in the middle of nowhere” – is respected, investing in land could bring good rewards for the well prepared investor.
As Romania is a fairly large country, with plenty of potentially great investment areas, it is difficult to consider which areas are the best. A safe bet would have been the capital, Bucharest, but lately the land availability is on a strong decline and also, after a few years of increased prices, the profits would’ve already been made by the earlier shrewder investors.
Land by the sea (please bear in mind that the summer holiday season lasts only 4 – 5 months) or land in other major cities could also be a potentially lucrative deal however, after careful consideration we consider that land in the main ski resorts in proximity of Bucharest – Valea Prahovei – in general, and in the beautifully historic city of Brasov located nearby in particular, would be a great investment opportunity.
The main principle we have applied to for our own land investments was to buy mainly land located near an impending development, in an up-and-coming area.
Intravilan land (land already designated for building)
Exit strategy 1 (short to medium term) for intravilan land: To buy larger plots (wholesale) of land, holding it for about 6 months – 1 year and then dividing into smaller plots and then subsequently selling the individual plots (retail). The main target market in this case is local people, who would love to build their own houses (to live in or to use as a holiday home);
Exit strategy 2 (medium term) for intravilan land: Buy a large plot, obtain PUZ (Zonal Urbanistic Plan), PUD (Detailed Urbanistic Plan) & relevant building authorizations and then either sell to a developer or build on it yourself – for a substantial profit.
Agricultural land (land currently designated for agricultural purposes)
Exit strategy 1 (medium to long term): buy agricultural land and convert into building land – the process has greatly simplified recently and it should not take more than 6 months, depending on the area. The follow the above steps for intravilan land;
Exit strategy 2 (long term): buy agricultural land and resell in 3 – 5 years time without changing the use of the land.
Please note that in order to own land in Romania you are required to either be a resident in Romania or set up a Romanian company.