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Renting a property - information for owners

In Romania, due to the lack of legislation specific to renting a property, as a landlord, you risk meeting tenants who can cause you more problems than a profitable business. At the same time, unlike other states, in Romania there is no centralized system to keep track of tenants' behavior in order to be able to locate those who raise problems, so that they could not rent a building equally easy in the future. Therefore, Astoria Imobiliare team recommends following these steps in the rental process of your real estate to reduce your risk of experiencing problems:

♦ pre-rental;
preparing the property;
cooperation with real estate specialists;
property advertising;
viewing the building;
negotiation;
completion of the transaction.

 

Before renting your property, you need to familiarize yourself with the legal and financial implications of renting a real estate and, in particular, with the responsibilities you have as a landlord. At the same time, it is important to look at the profile of the customers your rental offer is addressing. In other words, the state and facilities of the property that you plan to rent will determine the type of tenant you can attract. From our experience, the following categories of tenants are found on the Romanian market:

those casual - who are looking for hotel properties on a shorter period of time;
young people and those without their own family (for example, students) - they usually have lower claims, being oriented towards properties with an average degree of comfort at an affordable price;
families - who are usually interested in higher living conditions and as many facilities as possible in the area (shops, playgrounds, public transport etc.);
those who represent various companies - who are looking for protocol properties.

 

Therefore, your rental offer may be specifically addressed to one or more categories of tenants depending on the area, technical qualities, finishes and property features you provide to tenants. Astoria Imobiliare specialists can help you decide who would be most profitable to address your rental offer according to your long-term needs. 

 

 

Preparing the property

Prior to listing your offer on the market, your property needs to undergo general sanitation and repair where needed. Therefore, the costs of these preparations may vary depending on which repairs or extra equipment is required. This should be performed irrespective of the category of tenants that your property is addressing, however the needs of each may vary.

 

If you have a property that is suitable for hotel-type renting, which implies a very short stay, it is necessary to go through the sanitation step after each client; thus providing general cleaning, bed linen and clean towels as well as personal hygiene products.

 

If your offer is for young tenants and no family, they need basic but functional interior design. We recommend that you provide them with a desk and a library or bookshelves, and a good internet connection remains mandatory.

 

If your property is suitable for renting to a family, you should expect the relationship with them to be long term, these tenants preferring not to move too many times. Family members are interested in superior living conditions, so it is necessary to provide functional appliances as well as furniture of good quality (both technical and aesthetics).

 

If you want to rent your property as a protocol property, it has to offer luxurious conditions. Typically, the companies rent such properties on a long-term basis for image reasons, but also so as not to risk being left without such a place near major events. Of course, this type of property requires high quality equipment and finishes. However, household items’ deterioration will be limited, because the use is often limited.


Consultation with Astoria Imobiliare specialists

As explained above, when you rent your property, you are exposed to risks because of the lack of specific legislation in Romania. Therefore, Astoria Imobiliare team can help you find appropriate tenants for your property. Here are some of the reasons why you should contact our specialists:

for access to information and real estate advice;
we offer specialized assistance throughout the rental process;
we help you set the right monthly rent for your property, in correlation with what is happening in the local dynamic real estate market;
we offer a promotional and customized advertising package of your offer;
you can gain time;
for the security of the rental transaction of your property.

 

If you still want to rent your property on your own, then we recommend that you take into consideration the following issues:

you have sufficient knowledge in the real estate field, as well as about the legislation in force regarding the rental of properties;
you know how to prepare your real estate for viewing;
you know how to formulate the rental announcement of your property and you know where to promote it in order to have visibility and success;
you have to be realistic about the monthly rent you can obtain for your real estate;
you know all the contractual clauses in order to avoid surprises.

 

Advertising your rental offer

It is essential that your desire to rent a property becomes public to attract the attention of tenants. There are multiple ways to make your rental announcement public, from announcing your relatives, to investing in real estate announcements and banners, etc. and all should be taken into account. We recommend that you use the Astoria Imobiliare services to rent your property because our services include a promotional and advertising package tailored to your offer.

 

Viewing the property

Because the rental agreement can be signed even when viewing the property, this stage of the process becomes very important. Depending on the approach and attitude (of both the tenants and yourself), the negotiation and completion of the rental transaction can occur while the property is being viewed. Therefore, a real estate consultant from Astoria Imobiliare team can accompany you during your viewing and can help you obtain and deliver honest and constructive responses. We recommend that you try to make potential tenants feel at home by maintaining a relaxed and open attitude.

 

You definitely want to know some details before you alienate the property to a tenant that you have just met. As a consequence, we advise you to ask various things of interest to you (field of activity, lifestyle, payment options or future plans) so that you better know potential tenants. This can help you determine if you want to collaborate with those people.

 

Negotiation

If those who view the property want to become your tenants, then a negotiation can begin. Astoria Imobiliare specialists advise you not to be too restrictive in terms of monthly rent or payment methods, but we strongly recommend that you clearly set a warranty as well as payment terms.

 

In terms of monthly rent, you need to know that there are several types:

Fixed rent - in this case, the same amount of money will be paid monthly for the entire contractual period, not taking into account the fluctuations in the real estate market. Although there is a temptation to take advantage of the season's peak in terms of rental rates, you may have the unpleasant surprise that after a few months your tenants will leave, and you will have to resume the entire rental process.
Variable rent - it requires flexibility on your side, so as to give your tenants a different rent depending on the season. For example, in winter (utility costs are higher) and in summer (being the holiday season) you can accept a lower monthly rent.
Indexed rent - this type of rent is specific to protocol properties, the rent being indexed by currency or inflation, but usually with longer contractual periods.

 

The warranty is a precaution for you in case of un-repaired damages or unpaid expenses. We encourage you to always ask for a warranty, which also has the role of empowering tenants in terms of mandatory expenses and potential damage.  The warranty is a modest amount (usually the equivalent of 1 or 2 monthly rents) that is paid by the tenant during the signing of the lease agreement. This amount will be returned to the tenant at the end of the contractual period if no damage or liability has occurred.

 

Completion of the rental transaction

If both parties agree on the terms of the negotiation, the rental agreement may be signed. It consists of a written agreement between the owner (lessor) and tenants/tenants (lessee/lessees) stipulating the provision of the property for a limited period of time in exchange for the payment of a monthly rent. The rental agreement does not have to be authenticated by a notary public, which is why it can be signed during the viewing. The signing of the agreement by both parties remains mandatory.

 

The rental agreement contains the identification data of both parties as well as that of the property, the amounts of money representing the monthly rent and the warranty, the payment terms, but also some specific clauses that we recommend to study carefully. For the security of your transaction, Astoria Imobiliare specialists can advise you on all these terms (relating to notice, sub-rental, evacuation, periodic inspection and so on).

 

The required documents

The following documents are required to be able to prepare the rental agreement:

♦  identity document;
♦  up-to-date land registry excerpt - it certifies the legal situation and the identification data of the real estate property;
♦  energy performance certificate.

 

In order to register the rental agreement with the Financial Administration, you will need to submit the following documents:

♦  identity documents of both parties (landlord and tenant/tenants);
♦  rental agreement (3 copies);
♦  standard form Statement 200 for Income Tax (2 copies);
♦  fiscal stamp.

 

Costs

The process of renting your property involves the following costs for the owner:

♦  the fee for issuing the energy certificate;
♦  real estate agency commission;
♦  annual tax on income from the rental of real estate;
♦  mandatory house insurance - this obligation rests with any real estate owner, regardless of the intention to rent the property.

 

Compulsory insurance

Being implemented since 2010, the mandatory home insurance is a simple and affordable way to provide protection to your home in case of natural disasters. The value of insurance premiums is the same regardless of the area where the property is located, and the three risks that the mandatory insurance covers are earthquakes, floods and landslides.

 

The materials used for building your home determine its belonging to one of the two categories:

♦  type A - having the strength structure of reinforced concrete, metal or wood OR with external stone walls, burnt bricks or other materials resulting from thermal or chemical treatments;
♦  type B - with external walls of unfinished brick or other materials not subjected to thermal or chemical treatments.

 

Value of the insurance premium (with validity for 12 months):

♦  property type A - 20 Euro for 20,000 Euro insured amount;
♦  property type B - 10 Euro for 10,000 Euro insured amount;

 

Currently, the law allows owners to choose between a compulsory and optional insurance only if the optional insurance covers the three major risks: earthquakes, floods and landslides. Optional insurance gives the owner the possibility to secure his home against other risks not covered by a compulsory insurance (e.g. fires, damage caused by means of transport or electrical installations etc.). The best-selling optional insurance and also a very important one is "third-party civil liability". This entails compensation (within the limits of the insurance policy) for damages caused to neighbors in certain events such as floods or fires.