VFI Briefing:Purchasing Overseas real estate

Purchasing Italian real estate

Once a property has been located, the first step is an agreement between the buyer and the seller, known as a Proposal to Purchase. This offer contains a specific timeframe in which the seller can accept the offer. The buyer pays a minimum deposit of 10 percent of the purchase price. The deposit can be higher than this, and it is not uncommon for the deposits to run up to 50 percent, according to Property-Abroad.com. The Proposal to Purchase is legally binding, according to “Investment in International Real Estate,” a Pirola Pennuto Zei & Associati publication. If the seller accepts, the buyer is obligated to complete the transaction and the deposit will be forfeit if the buyer withdraws.

“An alternative and recommended approach is to incorporate the terms of the Proposal to Purchase directly into the purchase and sales contract ensuring to allow a period in which the buyer has the right to carry out a full due diligence on the property and/or entity(ies) holding the property and the possibility of the buyer backing out should the due diligence point to there being some legal or tax problem associated with the property,” according to the publication.

Focusing on improving one property may be wise

The Preliminary Contract of Sale formalizes the buyer’s and seller’s agreement. This document provides details about the property, the buyer, the seller, the price, and any other terms of the transaction.

The entire process is overseen by a notary. In addition to the typical duties associated with a notary, this person will conduct the title search to ensure that the property is clear of liens and other problems, according to Property-Abroad.com. The notary witnesses the closing of the sale.

Investors should, of course, carry out proper due diligence before agreeing to purchase any property. This is especially important when purchasing property in a country with unfamiliar laws and regulations.

“Italian laws are complex [and] there are important concerns that go beyond clean title,” Carroll said. “For instance, a buyer needs to be certain that prior works carried out on a property have been done with proper permits and are in compliance with zoning regulations and that rights of neighboring landowners are respected....[S]evere penalties exist for failure to fulfill the obligation to purchase once the P&S is entered in to."

After purchasing a home in Italy, investors can either try to sell for a profit, rent the property to some of the many tourists visiting Italy every year and/or use the property themselves as a vacation home. Many websites are available on which property owners can advertise foreign homes for sale or rent.

VFI Briefing:Purchasing Overseas real estate

The Italian real estate market

“After 10 years of significant run-up in prices in major markets and sought-after country properties, prices now have leveled,” according to Carroll. Properties in both rural and urban areas can prove profitable, though Property-Abroad.com states that properties in rural regions of Italy have been especially popular in recent years.

Apartments are a popular choice when purchasing property in one of the larger cities, such as Rome or Milan. Apartments in areas such as Sardinia, Venice, Sicily, Milan and Florence are all popular among foreign investors, according to Property-Abroad.com. For those looking to cash in on the tourist industry, Carroll said that areas such as Sicily, Puglia and Campania are particularly attractive for investment.

Cost varies by location. Prices in Milan range anywhere from €8,000 per square meter for a city apartment to €24,000 per square meter for a penthouse with luxuries such as a terrace and swimming pool, according to a report from real estate agents Immobiliare Terelli & Partners. In Sicily “[p]rices, which have been rising as much as 20 percent a year, still seem reasonable, especially to north Europeans but even to Italians from Milan and Turin,” according to The International Herald Tribune. “Country and town properties are available for as little as €60,000, though for a building of particular architectural interest the starting price is nearer €250,000.”

In upcoming years, “[f]ocus will be on adding value—refurbishing, renegotiation of lease contracts, etc.—to existing portfolios rather than on new investments as these will make more economic sense,” according to Carroll. Pessi, on the other hand, believes that the future of the property market is still too hard to predict in the wake of the subprime crisis. Investors would be wise to proceed with caution, keeping an eye on the market, and perhaps put more energy into upgrading and renting a few properties rather than purchasing an abundance of homes.

VFI - INCALABRIA: Italian Magazine Article (Part 2)

PERFECT PASTA

The food of Calabria, despite the abundance of fish, is primarily a diet of simple fresh pasta and homegrown vegetables cooked in fascinatingly different ways. Although pasta is important to all Italians, in Calabria it is almost treated with reverence. Each city or town has its own specialities, from chewy fusilli, to various types of lasagne.

Calabrians seem to know by instinct, the best sauce to pair with each pasta to create the most delicious dishes. Piero caused me to sample many varieties of homemade pasta, such as macaroni alla pastora (with ricotta cheese) and other sauces, fusilli (curly pasta), vermicelli in soup and tortellini in brodo. His own favourite was pollo alla cacciatore (‘hunter’s chicken’), to say nothing of uove alla purgatorio (‘eggs from purgatory’). You can imagine how I gradually became drawn into a cuisine far removed from my own by this expert young cook, backed up by total single-minded enthusiasm for his subject. With youthful exuberance I once suggested fish and chips to him and he returned to Italy with a craving even for that. It fitted the Calabrian palette perfectly – good, simple but tasty basic fare. As it happened, I visited Piero and his family on several occasions in the years that followed. His family welcomed me with incredible warmth and I felt part of that corner of Italy. We would visit Piero’s mum, who made all sorts of typical Calabrian dishes for anyone lucky enough to visit. Like highland hospitality in my own country, Calabrians regard it as a sacred duty to welcome guests and I was ushered into many a happy gathering under the gaze of Padre Pio, whose caring picture adorned the rooms. I learned that Piero also had another passion: he was an avid stamp collector and his passionate nature had an outlet here too. Lovingly organized albums of stamps surrounded him in his room. As I met the local folk I discovered the famously proud Calabrian dialect. Its weird and resonant words made me swim as I struggled to understand, equipped only with average Italian, a language I had come to love. Calabrian is an Italian dialect and a descendant of Vulgar Latin, but it has plenty of Greek influence too from the Magna Graecia period. I remember being sent home on one occasion with a bag of cuddaraci (Easter buns), one of many words of Greek origin.

I was favoured this year by being able to return to see my old friend after a gap of 25 years. In that time, with family and professional matters intervening for both of us, I had never forgotten the pull of this land. Piero welcomed me back to a country that I now think of as my second home. It was the little things that jumped out at me – zuppa Inglese ice-cream, spaghetti alla vongole, seeing the wonderful way Calabrians use their hands when they speak, young Italians going to school, walks along the beach and meeting folk I had not seen for years. If this evocation persuades you to consider a visit, you should know that I have not even mentioned the archaeological areas of Sibari and Locri Epizefiri, the towns of Gerace and Stilo, to say nothing of the forests of Sila, dubbed the Yellowstone of Calabria. All the more reason to investigate further. Unusual destination it may be but, like a real life pearl,Calabria hides its beauty.

VFI Brochure: Italian Travel Advice. Health Cover

Health Cover

Medical expenses are an important aspect of travel insurance and you shouldn’t rely on insurance provided by reciprocal health arrangements, charge and credit card companies, household policies or private medical insurance (unless it’s an international policy), none of which usually provide adequate cover, although you should take advantage of what they offer. The minimum medical insurance recommended by experts is €400,000 for Italy and the rest of Europe and €1.5 million for the rest of the world (many policies have limits of between €2.25 million and €7.5 million). If applicable, check whether pregnancy-related claims are covered and whether there are any restrictions for those over a certain age, e.g. 65 or 70 (travel insurance is becoming increasingly expensive for those aged over 65, although they don’t usually need to worry about pregnancy – particularly the men!).

VFI Brochure: Italian Travel Advice.

Holiday and travel insurance (assicurazione sul viaggio) are recommended for all who don’t wish to risk having their holiday or travel ruined by financial problems or to arrive home broke. As you probably know, anything can and often does go wrong with a holiday, sometimes before you even get started (particularly when you don’t have insurance). The following information applies equally to residents and non-residents, whether you’re travelling to or from Italy or within Italy. Nobody should visit Italy without travel (and health) insurance.

Travel insurance is available from many sources, including travel agents, insurance companies and brokers, banks, motoring organisations and transport companies (airline, rail and bus). Package holiday companies and tour operators also offer insurance policies, some of which are compulsory, overpriced and don’t provide adequate cover. You can also buy 24-hour accident and flight insurance at major airports, although it’s expensive and doesn’t offer the best cover. Before taking out travel insurance, you should carefully consider the range and level of cover you require and compare policies. Short-term holiday and travel insurance policies may include cover for holiday cancellation or interruption, missed flights, departure delay at both the start and end of a holiday (a common occurrence), delayed, lost or damaged baggage, lost belongings and money, medical expenses and accidents (including evacuation home), personal liability and legal expenses, and default or bankruptcy, e.g. a tour operator or airline going bust. You may also need cover for transport strikes in Italy!

Always check any exclusion clauses in contracts by obtaining a copy of the full policy document, as all relevant information won’t be included in an insurance leaflet. High risk sports and pursuits should be specifically covered and listed in a policy (there’s usually an additional premium). Special winter sports policies are available and more expensive than normal holiday insurance (‘dangerous’ sports are excluded from most standard policies). Third party liability cover should be €3 million in North America and €1.5 million in the rest of the world. However, this doesn’t usually cover you when you’re driving a car or other mechanically propelled vehicle.

VFI News: Southern Italy Investments defy Credit Crunch

Property in Italy is holding up in the credit crunch with experts predicting modest growth in many areas. Locations with a strong tourist market are the best to invest in and southern Italy in particular is still offering lower priced investments...

Italy hasn't experienced the same problems as the UK and Spanish property markets and the risk of a downturn is considerably lower, according to a new report from Cluttons Italy.

One reason is a significant shift in the Italian market in recent years. 'Until 10 to 15 years ago the majority of foreign buyers were middle class people looking for their storybook villa in culturally rich areas like Tuscany and the Amalfi coast,' the report says.

'Now the arrival of low cost airlines has made southern Italy much more accessible, steering a wider range of buyers to lower cost resort properties in southern regions like Puglia and Calabria.'.

Fashionable areas like Capri and the Amalfi coast are likely to see property prices continuing to rise. Cluttons predicts around 10% this year.

But Calabria in Southern Italy where prices are cheaper is set to become one of the most popular destinations in Europe, and the next Mediterranean property investment success story.

'Property prices are comparatively cheaper than other similar areas in Europe. Also the area will not be overdeveloped due to strict government planning controls. This will ensure that demand remains high for rental accommodation and resale properties,' said Roger Coombes of Cluttons Italy.

'When an area like Calabria begins to attract increasing international attention, it is all but a foregone conclusion that property prices will see sustained and rapid growth of at least 10-15 percent per year,' predicted Liam Bailey of David Stanley Redfern.

And Chris Sawyer, GEM Estates' Italy expert is also backing the area, 'It's largely the southernmost region of Calabria that's fuelling this heightened interest. As soon as the British buying public realized that chic Italy had a hidden corner which was both aesthetically stunning and highly affordable, the rush was on,' he said.

'Calabria is now jostling for attention alongside the established Côtes and Costas and ticks boxes for both lifestyle buyers after a pleasant climate and attractive coastline and investors with an eye for a profit.'
Reprinted courtesy of Propertywire.com