Posts Tagged ‘Investing In Real Estate’

The Italian Property Market

An increasing number of foreign nationals have taken to purchasing real estate in Italy over the course of the past fifteen years. The increase in real estate purchases in Italy by foreign nationals really took off following the integration of Europe into the EU. With the advent of the European Union, more and more foreign nationals began purchasing different types of real estate within Italy. This included commercial, residential and speculative investment purchases by foreign nationals.

The vast majority of foreign nationals who have taken to purchasing and owning real estate in Italy are from within one or another of the European Union nations. With that said, British investors have been particularly active in buying and investing in real estate in Italy during the past five to ten years.

The prime real estate purchases in Italy by foreign nationals in recent years have been concentrated fairly heavily in rural regions of the country

Investment Property in Italy

As with the other nations that are members of the European Union, Italy has seen a growth in the number of foreign nationals making real estate purchases within that country since the inception of the EU. The common marketplace that was formed with the development of the EU is deemed to be the primary reason as to why there is so much activity in the arena of real estate buying and selling in EU nations such as Italy.

A significant amount of the movement in regard to real estate in Italy involves the buying and selling of property for investment purposes. A significant amount of activity when it comes to investment real estate has involved two primary types of property: commercial or industrial property as well multi-family properties that are used for residential and vacation purposes.

There are no real restrictions on foreign nationals purchasing real estate in Italy beyond a bit higher purchase registration tax that will be discussed later. This holds true for investment real estate as well as other types of real property in Italy.

Residential Real Estate in Italy – Single Family Properties

The biggest rush of selling when it comes to residential property has occurred outside some of the major cities in Rome. Many foreign nationals have involved themselves in this particular buying spree. Indeed, particularly people from the EU have actively made the purchase of homes and villas in rural areas of Italy to be used as second homes.

These people maintain that they are attracted to the easy going and relaxing lifestyle of life in rural Italy. (There have been some motion pictures in recent years set in such environments that many real estate experts in Italy maintain have further spurred the sales of rural residences in the Italian countryside.)

Residential Real Estate in Italy – Apartments in Italy

When it comes to finding private residences in the larger cities in Italy, apartments remain one of the most popular types of residential property bought and sold in the 21st century. Take for example the city of Rome. Apartments remain one of the most often conveyed forms of real property within the Italian capital city. (Of course, the limited amount of living space and the ever growing population of Rome have combined to make apartments invaluable residential assets in that city.)

Many foreign nationals have invested in apartments in the more major Roman cities over the course of the past decade for two primary reasons. First, these apartments are allowing these foreign nationals a second and oftentimes more affordable residence in one or another of the Roman major cities for their own purposes. Second, many people from other nations are making the purchase of these apartments in the larger cities in Italy to then be let or rented to other individuals.

Generally speaking, these investors who are purchasing apartments in Italy are renting to people who will be in Italy for an extended period of time on business. In the alternative, they are renting these apartments to individuals and families who have elected to spend an extended period of time in Italy, in one of the major Italian cities, on holiday.

Holiday Property in Italy

Vacation real estate remains a proverbial hot property in Italy at the present time. The demand for real estate in the major resort communities in Italy have sent the costs of real estate in those communities through the roof. With that said, many of the more healed foreign nationals continue to attempt to make the purchase of nicely situated real estate in the resort communities in Italy.

One of the other areas in which vacation real estate is selling at a brisk pace is in some of the more rural spots in Italy. As mentioned previously, many foreign nationals are taking to purchasing real estate and graceful homes in rural parts of Italy to be used for their second homes. Likewise, many foreign nationals are purchasing real estate in more remote and rural areas of Italy for use on family or other types of vacations and holidays.

In addition to using these properties for their own personal holiday or vacation purposes, many of these same foreign nationals are leasing these properties to other foreign nationals during those times of the year in which these owners are not occupying the properties themselves. As a consequence, many of these foreign nationals have been able to make their vacation properties pay for themselves. Indeed, there are some foreign nationals who have gone so far as to purchase more than one residential property in different locations in Italy. These individuals will use one or another of these residences at different times during the year and let them out to others the remainder of the time. These individuals have found this type of investment to be profitable.

Specific steps to buying real estate property in Italy

The real estate sales and purchasing process in Italy is fairly streamlined and not particularly complex. For the most part, a foreign national stands in the same shoes as does an Italian citizen, with one exception. When it comes to the purchase of real property in Italy, a foreign national must pay a 11% purchase registration tax after the sale itself is consummated. An Italian citizen must only pay a 4% purchase registration tax.

In Italy, the first step towards the purchase of real estate is the initial agreement between the parties. Once the initial agreement is signed and executed, there are some primary tasks that must be completed by the parties. For example, the buyer must obtain appropriate and sufficient financing. The seller must work to make certain that title to the property is free and clear of any and all encumbrances so that it can be conveyed to the buyer.

When this initial agreement is signed, the seller will post a deposit in the amount of at least 10% of the total purchase price of the real estate being sold. It is not uncommon in Italy for deposits to run as high as 50% of the overall purchase price of the property. Deposits in Italy tend to be higher than what is seen in many other countries around the world.

Generally speaking, the deposit is not refundable if the buyer simply decides that he or she does not want to buy the property. Indeed, the only real circumstances in which a buyer can obtain a refund of the deposit — even a hefty deposit of upwards to 50% of the purchase price — is when the buyer backs out of the deal or in circumstances when clear title to the real estate cannot be obtained within the time set forth in the initial agreement between the parties.

The real estate purchase process is overseen by a notary in Italy. The notary actually has more duties than is normally associated with a notary involved in real estate transactions in other countries the world over. For example, the notary in Italy is responsible for carrying out title searches to work to make certain that the title to the property is free and clear of any obvious defects or liens.

Many real estate experts in Italy recommend that a purchaser take the time to hire what is known as a geometra. The geometra will survey the physical boundaries of the property for sale to make sure that it actually does comport with what is listed on the legal description that is subject to a contract for sale. (These experts maintain that this particularly is important when it comes to older properties in Italy.)

The real estate purchasing process can take upwards to six months to complete in Italy. For this reason, unlike in many other countries around the world, it is a commonplace occurrence for a purchaser to move into residential property after the initial agreement is signed. In most countries around the world, the purchaser does not take possession of the property until the final agreement is executed and the deed to the property is transferred from the seller to the buyer

Property Abroad always recommends using a Solicitor or Lawyer.

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Investing in Real Estate

Real estate investment is perhaps one of the most lucrative forms of investment today. But it is also equally risk bound especially when one is not well versed with the trends and nuances of the real estate market. So if you are contemplating on investing in real estate, it is best to avoid costly mistakes in real estate investment especially when you invest your hard earned money into it. Knowing the most common mistakes made by real estate investors helps one steer away from making such mistakes in the future and ensures good return on investment.

Here are the top ten mistakes made by real estate investors, according to bankrate.com. Bankrate has put together the top ten mistakes after speaking to established, full-time real estate investors and other professionals involved in real estate investment such as bankers. Read on to know them and avoid them.

1. Not planning up ahead. Lack of a proper plan is the biggest mistake made by novice investors. Finding a house after forming a proper investment strategy is the right way instead of looking for a house to fit the plan. Many make the mistake of buying a house because it seems to be a good deal and then trying to see how they can fit it into their plan. Instead of buying a house and thinking one can plan in due course, investors should rather concentrate on the numbers and try to make offers on multiple properties. This will ensure a good property that not only matches their investment model but also works out well with the numbers they had planned for.

2. To believe you can make money quickly. The second major mistake that real estate investors make is to think it is very easy to get rich in real estate. This is only a myth and the reality is that investing in real estate is a long term project.

3. Doing it single-handedly. For becoming a successful real estate investor one needs to build a team of professionals who would assist the investor in his deals. This would ideally include a real estate agent, an appraiser, a home inspector, a closing attorney and a lender.

4. Making excess payment. One another reason that investors in real estate goof up in their investment is by paying too much for the properties they buy. Paying too much and locking up all the funds in the erred property deal will leave you with no money to redeem yourself.

5. Leaving out the groundwork. Not doing your homework could be a costly mistake if you were a real estate investor. Every field of business needs sufficient amount of homework to be done, and real estate investment is no exception. Learn the fundamentals and then venture into investing in properties.

6. Throwing caution to the winds. Investors have to exercise a certain degree of caution and take earnest efforts while making a deal. New investors often fail in this regard and sign a deal without doing adequate research on the property.

7. Miscalculating money flow. Investors whose strategy is to buy, hold and rent out properties need to ensure sufficient cash flow for maintenance. Property managers could be expensive and the owner has to incur more expenses such as mortgage, taxes, insurance, advertising costs etc. Investors have to allocate their budget such that all these expenses are taken care of, or end up having their asset turn into a liability.

8. Lowering the volume. A larger volume of deals or transactions helps in increasing the profits by reducing the impacts of marginal deals.

9. Getting trapped in your own deal. Having more number of options at hand for the property you buy is a wise strategy. This helps one to be prepared for fluctuations in the real estate market. Plans to rent out the house could go awry when the rental market slumps. Having alternative plans helps you cut down losses and tackle unexpected situations.

10. Making incorrect estimates. People who plan to rehab their house need to check if they will still reap the benefits at double the time that they had estimated. This ensures they do not miscalculate and lose money on the deal.

In Southern California, especially Orange County property management is an important aspect of investing in real estate. The profitability of your property is dependent on hiring a qualified helpful and professional property management company.

Hiring the wrong management company can mean losing thousand of dollars, or more. Property owners who hire the right OC property management company however, can enjoy the benefits of a lucrative property investment.

Some of the most common, and often, detrimental mistakes a property owner makes is not doing enough research. The more research you do, the more you can avoid hiring a bad management company.

Property management companies that also sell properties, often nation wide corporations like Century 21, etc. are often a bad idea. They usually are primarily real estate agents, who also do property management because they want to manage when you choose the sell the property. A property management company like this is not a good idea because they make more money selling than managing. You would benefit more from a smaller, specialized company that deals only with property management in your area and nothing else. For example, if your property is in Huntington Beach, you should try to find a local expert Orange County property management company that has a much experience in the local area only.

Make sure you check the references of your management company’s other clients. Don’t be afraid to make a few phone calls, and get a good track record. You shouldn’t sign anything before you have a good idea that the company you’re hiring is the best at property management in Orange County and one that you can trust. On the other hand, as an owner, you shouldn’t be too demanding of references either. A good property management company will not release all of their clients’ information to you, because it is private and confidential information. The management company won’t be making an obscene amount of money managing your property, so they can always tell you to take your business elsewhere if you are being too much of a pain. You will do well with around 3 references to talk to, and get an idea of how they work with their clients.

Some other things to keep in mind: Is the company licensed in the state of California? Is the company insured? Do they have a fidelity bond to protect you in case an employee mishandles your money? Will they provide you with reports? Will they market your property? How do they deal with late charges? How do they handle tenant complaints? And so on. These are some tips for making sure you hire a good property management company that will professionally and efficiently manage your property, helping you turn your home/apartment/condo/commercial property into a steady investment.

Disclaimer: This blog or article is for information purpose only, and should not be treated a professional advise or price protection guarantee. This blog is mainly used for search engine optimization and other commercial purposes and it is advised that readers seek professional consultation in the field of interest for more information.