If it sounds to good to be true, it probably is. The promise of guarenteed rent is a great example. Who wouldn't want to buy an apartment and know that it will be rented for the next two years at 7% annual return, the standard offer made by most engaging in this practice?
In the guarenteed rent scenario you, as the buyer, are the one paying for the guaranteed rent!!! The square meter price for your apartment has been adjusted to include the guaranteed rental return for two years. What's worse, the developer or other party now has the right to rent your apartment for two years and take all of the rental income. They technically give you 7% back annually...which is essentially a refund of your money but any further profit they make is legally theirs.
If a developer or sales agent is so sure that he or she can rent your apartment out for the next two years then it would make sense that you should feel confident confident that you can hire on a commission basis an agency to handle your property for you after completion. With the guarenteed rent scenario, the only one with any guarantee is the one offering it.
Be every leary of scams when investing, especially in Eastern Europe. However, by taking some simple precaution steps you can avoid the scams that prevent so many people from making the real profit avaliable in this market.
1) Know who you are doing business with. Don't believe the offer before you believe the one making the offer. Ask for assistence in doing due dilligence before concluding any transaction.
2) Work with experienced people in the market with a track record. Make sure you are investing with people who have been in the market you are looking at investing in for a long time and have a history of success.
3) Never conclude a deal without an attorney. Use your Embassy's list of pre-approved attorneys at all times.
I've heard too many scam stories ranging from average investors to seasoned multi-million dollar investment groups who have fallen prey to cunning confidence men in Romania, from real estate agencies to attorneys that do not have the clients best interest at heart to not make a major issue of this.
If you have questions about a specific Romanian investment proposal that has been made to you, let us know and we will do some investigating.
There is great, legitimate profit to be made in Romania as it ascends to the European Union and develops into a first tier country. Make sure you don't miss your chance to reap the tremendous benefits avaliable, either due to procrastination or ill-placed trust.
Don't come to Romania to get duped in a New York minute. Be a smart investor and prosper.