Buying Italian property to renovate
June 22nd, 2012The current eurozone turmoil has thrown up some great opportunities in the Italian real estate sector.
On top of that, factor in the country’s timeless appeal that still attracts more than 40 million visitors a year – meaning investment property here still has optimum rental potential, especially close to historic cities such as Rome, Florence and Lucca or close to or along the coast.
One increasingly popular option for property investors is to pick up a property needing renovation, rather than one that is completely ready to move into straight away.
The obvious attraction is the lower upfront expense involved. In the lower-central and southern parts of the country, in particular – regions such as Abruzzo, Molise, Calabria, Campania and Basilicata – ruins to renovate can be bought from as little as €8,000.
Even with a typical reconstruction bill of around €500-€800 a square metre, one can completely renovate an old, 100sq m building for total costs of less than €100,000, far less than buying a similar home already completed would cost.
Many homes to restore are partly habitable, meaning that they can be lived in while work progresses. And this work can be carried out at a pace that suits you – over months or even years – allowing you to spread out costs to suit your budget. There is also the advantage that renovation allows you to build the home of your dreams to your exact specifications.
Stefania Russo, of Italian property search specialists The Property Organiser says: “The economic slowdown has seen more buyers opting for restorations.
“Restoration costs in regions such as Abruzzo are typically around the €800 per sq m mark – approximately half of what it costs in more popular northern Italian regions. And purchasers can spread the costs over months or even years, at their convenience.”
Italy’s rich history means it has tens of thousands of structures up to 500 years old, merely awaiting a bit of TLC to convert them into superb modern dwellings.
There is also a plentiful supply of farmhouses – a popular choice of foreign buyers – largely because of the exodus of swathes of country folk who, in the 19th and early 20th centuries, evacuated rural Italy for towns and cities or even a new life in unfamiliar surroundings thousands of miles from home.
Once you have chosen a property, the next step is to hire reliable professionals to turn your dreams into reality. Although some are quite content to do the legwork themselves, the most advisable route is to get a reputable geometra/surveyor (your estate agent should be able to put you in touch with one).
They will be able to take on good workmen for you as well as talk to local town halls for the needed building permission. Remember that many old Italian properties are made in stone and so work on such homes necessitates workmen experienced working in this material.
Beware of costs spiralling way above budget. Common surprises include pools (allow up to €25,000); improving access roads (budget up to €4,000 for a 100m section); and working on gardens. But your surveyor can thrash out a contract with your workmen setting budget ceilings and deadlines, with penalties kicking in if they are missed.
Although surveyors design homes to a certain extent, their knowhow is limited and it is wise to also hire an architect to oversee design. Ensure you spell out from the get-go exactly what you visualise and that you convey this to the architect. Deciding on something different once work is under way takes up valuable time, is expensive and demoralising for the rest of your team.
Also, be aware of how long the whole procedure may take. The buying process can last up to three months and sorting out the necessary work permits a further six, depending on the relevant local authority.
Finally, unless you intend being on-site more often than not, your team should also feature a independent supervisor to oversee everything and keep things to schedule. The architect or surveyor can also do this for you.
If you have enjoyed reading this article, why not browse through our selection of lakeside houses for sale in Italy? Alternatively, if you have a UK business, you may be interested in office space in London or elsewhere across the UK.