This article will help you understand how to buy multifamily buildings in Bucharest and offer you an insider’s perspective on what is needed for your next Multi-family or Residential Investment. This type of investment is a great way to build your wealth through rental income and asset appreciation.
How to get your Single Residential or a Multifamily Building in Bucharest?
Multifamily property is any residential structure where more than one family resides. It doesn’t matter how many units it is split up into. Real estate investors like multifamily homes because they enable owners to rent out their apartments. The multifamily property is seen as a relatively “secure” investment when compared to other property asset kinds. That is due to the fact that, despite the bad economic, people still need a place to live. In truth, during a recession many people are pushed to sell their homes and move into rental housing. Multifamily real estate investments may be attractive to newcomers to the market as a novel strategy to obtain capital growth.
When it comes to real estate investments, the quality of stocks is an important aspect that you have to pay attention to. Real estate development is a booming business in Bucharest. You will find many investment opportunities and it is important that you make an informed decision when you buy property in this market. You need to pay attention to the real estate development team, the project, the location, design, and finishing materials of the Multi-family Buildings.
I am pleased to introduce you to the newest investment opportunity for Multi-family Buildings in Bucharest due to the fact that I have been working with some of the top experienced developers who have brought this opportunity to life. These two Multi-family Buildings are set to be completed in 2024 and will offer a yield of a minimum of 5% for investors. With 18 exquisite residences in each building, 2 and 3 rooms, as well as spacious balconies and much more, these luxury-like boutique residential buildings are located in a prime location, are smart-ready, and offer top-quality finishing materials. The typical useable size for a two-room apartment is between 52-58 usable square meters plus terraces, while a three-room apartment is between 76-94 usable square meters plus terraces.
Tax advantages of Investing in Multi-family Residential Buildings
Real Estate assets, unlike stocks, bonds, and other financial products, are known for the multiple tax benefits they may give. These benefits, which include everything from accelerated depreciation to mortgage interest deductions and tax benefits for an investor’s heirs, can make a substantial difference in profits, especially over time. Some of the most typical tax savings in multifamily residentials are listed below.
- You can deduct the interest you pay on your company purchase mortgage. This means that your mortgage interest payments over the course of a year may be deducted from the tax your company owes.
- All refurbishment, maintenance, ongoing modernization, and other costs associated with owning real estate properties are deductible. If you use it for work, you can also deduct the condominium fee that accompanies the purchase of a house.
- Some business owners are investing in real estate to build assets that can be used after retirement.
Currently, in Romania, the income tax from renting properties is 10%. The real estate owners who rent the property have the possibility to apply for the determination of the net income in the real system, based on the accounting data which is reducing rent tax, respectively there are several expenses that are deductible.
Benefits of investing in the Multi-family Residential Buildings
Investing in apartments is a modern and trending approach among investors right now due to the additional monthly passive income and slow but steady increase. The benefits of owning an apartment as an investment are:
Greater Cash Flow:
These investments provide a new way to generate additional income from a single investment. Investors can also choose to live in one unit while borrowing another unit to make money. The apartment building can be used in different ways for retirement planning.
Blanket Insurance Policies:
Apartment houses offer more coverage options as a whole, but investors may find it easier to negotiate and purchase flat-rate insurance. Insurance companies are very familiar with the building of the apartment and the obligations that accompany it and can guide you through many options. As your portfolio grows, you may be able to consolidate everything into one policy.
More Control over Value:
Strengthen value management: The higher the value of a property, the more income you will earn. The apartment building has more units. In short, it can provide a variety of sources of revenue. As a result, these assets are usually valued higher than single-family homes, based on similar rental sales.
Property Management Suitability:
Single-family homes generally do not bring enough money to justify hiring a property management company. Apartment buildings, on the other hand, generally generate enough income for investors to employ real estate managers for their day-to-day operations and necessary maintenance. This can be a huge advantage for investors who don’t want to worry too much about rental properties.
Investors can be divided into two categories. Wealthy investors prefer to invest in shopping centers and large housing estates, while wealthy investors tend to invest in single-family homes. In such a situation, fewer investors are interested in apartment buildings, creating high-potential investment opportunities.
The overall conclusion is that Multi-family Residential Buildings are offering a realistic cash flow real estate investment in Romania. Therefore, start investing immediately by deciding how many units you want to buy, for a great price starting at 2250 Euro/sqm + VAT. Apartment houses, if done correctly, can be an excellent source of passive retirement investment. Calculating apartment building statistics gives you an immediate picture of your project rather than being influenced by external influences. Does the property indicate a good return potential for you, or should you absolutely avoid it? Knowing when to cancel a sale is just as important as knowing when to press a button.
I am at your disposal if you would like to expand your business into the Romanian real estate market and cover your business with any potential risks.
Mihaela Oroian, MRICS