The method used more recently gives clients the possibility of renting the home for two years, with the subsequent option to buy. This solution has generated some 30 new contracts for companies in the first three months of this year. “Since the launch of the product for apartments rented with preemption rights at sale (Call-buy), from December to the end of March, there were some 30 such contracts signed for studio, and one and two-bedroom apartments,” Carmen Sandulescu, Chief Financial Officer of Impact Developer&Contractor, one of the first companies to introduce this product in its portfolio, told Business Standard.
The product gives the client the possibility to move in right away, by paying some RON 20,000 (€4,833) as collateral, and paying a monthly rent starting at RON 1,500 (€362.5) for a studio apartment. “I can tell you that this type of sale has become a trend in Spain for some time now. Spanish developers began having problems with sales one year ago, and some were forced to resort to this method,” said Alejandro Solano, General Manager of Hercesa Romania, the company developing the Vivenda Residencias project. The method has both advantages and disadvantages for the developer. Main advantages are the use of finished apartments, covering at least the maintenance expenses, as well as expenses related to property tax and insurance. “The biggest disadvantage is related to the fact that, when the apartment is leased, there is a significant cash exit in terms of VAT [value added tax], which was deductible for the duration of the construction of the apartment. This disadvantage means that the product is not available for any developer with cash-flow problems,” Sandulescu added.
