Property Management in Romania, Property Management in Bucharest or for that matter, Property management in Brasov, the same rules apply…….
In this article I will attempt to enlighten owners a little on what to look out for when administering or managing privately owned Romanian property.
Romania has seen its fair share of foreign investors in Romanian property in the past decade since 2001. Some people have done very well indeed, but a great many more have not. People bought through companies such as Property Secrets, Anglo-Romanian Developments, MRI & many others. Some companies have been fair, others not so fair. I won’t discuss here who I think is in which category. They know who they are & so do their clients.
In turn, some of those companies appointed, on the basis of a kick-back very expensive law firms, notaries, accountants, advisors and so on. Some have come out well, some even, & some have lost significantly. I have seen prices foreign clients are asked to pay here for hourly rates that would make a Londoner cringe. Some help, granted is worth almost any price if its good & saves the client money or significant pain, but others, not so.
Ministry of misinformation….
However, on the flip side, my greatest frustration is the unending availability of free, useless & inaccurate advice. Just about every complex transaction I have ever been involved in, from drafting an all empowering POA to selling land after re-division, from opening a company to reducing the number of administrators, from general accounting to tax efficiency, on every single occasion any advice I gleaned was soon contradicted by an equally experienced professional. It is so bad that I cannot even publish the advice on this site as it will be contradicted almost immediately.
Recently I sold a house that involved payment of VAT on the income from the sale. I sought out the advice of a trusted, educated & experienced VAT inspector. I ran the advice by a well informed local lawyer, who totally refuted all that the inspector had said; claiming he regularly saw the tax authority beaten in court on such advice as I was given. When I got the 2 of them together, a 3rd solution emerged!
So, if the advice is good & to the point, ok, it’s worth paying for. I have personally seen an email from a UK client for her Tampa Garden’s flat asking her lawyer to confirm why it was late & how late it would be. The lawyers reply was to confirm the question, thus ‘you would like us to confirm if there is a delay & its cause & duration?’ & attached was an invoice of 300e for the hour spent digesting the email.
It is an endemic disease here. Few practices are really established or adhered to in the western sense. Romanian property management is no exception. A few of my competitors do a fair job from what I can see. I would say I think we offer better value for money, but I am biased of course. Comparison is the only fair tool & I always encourage clients to cross check us with our competition. But the good few to one side, there are some totally shocking so called ‘Romanian property managers’ or ‘Bucharest Property managers’.
To give you an idea of the sort of things a PM needs to deal with, beyond the obvious tasks of collecting the rent & banking, which is the smallest part of the job, below are tasks I or my team have performed in the past few days.
• Cleaning after a tenant moved out
• Readings for a tenant moving in
• Reference checking with a tenants employer & accountant
• Visit the notary to obtain a POA for PM
• Meeting a client in Bucharest to tour IKEA & agree a furniture style & budget
• Call out to an electrical fire in an old town Brasov garsoniera
• Organising a qualified, registered electrician to fix the same
• Organising a roofer to re-tile the problem area causing the fire (rainwater in lighting circuit)
• Organising a floor renovator to fix damaged parquet flooring prior to tenant moving in to an old town apartment
• Designing a kitchen in a new Avant Garden apartment
• Choosing lighting for the same apartment
• Buying, fitting & then adjusting curtains for an old town rental apartment
• Buying a black-out blind for a ground floor Avant Garden 3 apartment to suit a new tenant request for bedroom privacy.
• Meeting a locally based elderly mother of a UK based Romanian owner to take over PM of her property while she works abroad for a few years
• Visit architect to obtain plans to improve an owners apartment
• Visit Staer, Tekzen, Casa Rusu & Carrefour to purchase various furniture items for various owners rental apartments
• Visit tax office to register a rental contract for tax
• Organise spilt paint clean up after a worker repaired damp damage to a new apartment & left paint in the floor.
• Meeting insurance representative to renew all policies due to expire next month, in July.
• Organise carpenter to build a balcony.
• Organise a fireplace builder to create a fireplace
• Negotiate with UK owner to insulate his exterior walls on his Brasov apartment as tenants complain of dampness affecting young children.
• On agreement, organise execution of that work.
• Tomorrow, I have a pile of Gas circuit inspections in the coming 8 weeks, to keep owners compliant.
As you can see, collecting the rent is a tiny part of the role of Property Management in Romania. Higher up the list of priorities is:
a/ renting it for the highest achievable, consistent return
b/ keeping the tenants happy, safe, secure
c/ keeping the owner legally compliant, taxes paid, systems checked as safe & certified
d/ keeping the property in tip top shape to remain marketable
e/ keeping the property insured
f/ keeping the property monitored for signs of abuse/ misuse
g/ keeping all accountancy, fiscal & administrative matters in check.
Of course, anyone with a yellow pages can do all those things, but are they done as economically as possible? are the workers/ service providers checked out prior to using them? are the workers qualified to do this work legally? If you find a Property Manager capable of doing all these things, keep hold of them as they are a rare breed indeed & slipage of any single point above leads to snowballed problems. A lost tenant for just 6 weeks will cost you more than excellent quality property management for a whole 12 months,
Get proper help, do the job right, sleep soundly, watch your investment grow & the rent roll in.