PLEASE READ BEFORE POSTING
Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.Buy to Let in Italy
83dons
Posts: 86 Forumite
Hello I am looking for some advice in how to go about securing a property in Italy to use as a holiday home for a few weeks a year and to let out for the rest of the time as a holiday apartment (ie for weeks or months at a time). My problem is that I do not have the funds to buy a property outright in Italy so I was planning on looking into getting a mortgage or some form of rent to buy agreement whereby I can let out the property with the aim being to fully fund the mortgage/rent payments from the monies gathered in (or in addition to a regular monthly payment from myself). This way I can eventually pay off the property and own it and can also benefit from having a holiday home for some of the year. Can you provide some advice on the best ways to go about this please?
A little more information is that I am 41 and have a reasonably well paid job in the health service in Scotland. I already have a mortgage on my own property but have a fair bit of disposable income left each month I could be using. I do not have any savings really to use at the moment towards such a property and definitely cannot buy outright. I have much experience in marketing and web design etc so am fairly confident I could market and find interest to rent out the property once I have it for the dates we will not be using it. I have basic Italian language and currently learning it. The area I would be looking at would likely be Tuscany most likely somewhere in a small village with reasonable close access to the major tourist sites such as Pisa, Lucca, Florence etc by car or train or bus.
I virtually no knowledge of what is available for UK citizens in Italy for these purposes so would appreciate any advice on this idea.
A little more information is that I am 41 and have a reasonably well paid job in the health service in Scotland. I already have a mortgage on my own property but have a fair bit of disposable income left each month I could be using. I do not have any savings really to use at the moment towards such a property and definitely cannot buy outright. I have much experience in marketing and web design etc so am fairly confident I could market and find interest to rent out the property once I have it for the dates we will not be using it. I have basic Italian language and currently learning it. The area I would be looking at would likely be Tuscany most likely somewhere in a small village with reasonable close access to the major tourist sites such as Pisa, Lucca, Florence etc by car or train or bus.
I virtually no knowledge of what is available for UK citizens in Italy for these purposes so would appreciate any advice on this idea.
0
Comments
-
I'm going to give quite a biased view on this - because I know quite a few people who own (or owned) property in other EU countries.
Try looking at it this way...- Read the posts on this forum about all the problems people can encounter buying / selling / letting property in the UK
- Imagine if the people hitting these problems were Italian - with only a basic understanding of English, and no knowledge of UK laws
You will be in that situation in reverse...- Having to sign complex Italian legal documents - which you probably won't understand
- Having to deal with Italian property and letting laws - which may be very different from UK laws
- Having to deal with Italian estate agents, solicitors, letting agents, property management companies, repair companies, insurance companies, utility companies
And realistically, there's likely to be a queue of people who regard inexperienced foreign buyers/property owners as a 'soft-touch' - who are perfect for ripping-off.
But like I say - I'm a bit biased.0 -
This doesn't sound like a good idea to me.
You will be putting an enormous amount of money at risk (you need a big deposit for BTL mortgages) by investing in a highly leveraged investment (i.e. want to use debt to buy the investment), in a country you aren't familiar with, with no certainty that the income received will cover your running costs and costs of paying off the mortgage.
I think you are better off looking at this purely from an investment perspective. Use the money you have saved in the most efficient way possible. Try to keep the emotion / holiday home aspect out of it.0 -
I presume there might be some reputable companies out there that might help you, perhaps look online but you'll need to find some assurance that recommendations are genuine. If you can have assistance from someone who knows what they're doing it's not a bad idea, otherwise risky.0
-
Hi thanks for the feedback so far. I am aware of the difficulties involved such as language barrier, legal documents etc. I was more looking to get hold of some actual details here perhaps from people who already have gone down this path. There must be literally thousands of folk from the UK that have properties in Italy that are buy to let and financed in this way. I am interested in the detail here - what deals are available, how italian law affects the deals, what sort of costs I would be looking at etc. That way I can decide whether my own income can cover all the running costs without even the need for the rental income. If so then most of the financial risk will be accounted for. I had heard there was 2014 italian government scheme which allows rent to buy in particular as I believe it is not easy for a non italian citizen to get a basic mortgage. It is more exploring ways I can use the disposable income I have every month towards something that is useful now for me. Saving it up then buying is clearly more sensible but what is the point of buying a place in 20 years time when there is less opportunity to enjoy it. I have the money now to pay this up and once you factor in rental incomes then it should pay for itself easily in that area.0
-
You'd probably be better to look at Italian-specific forums - here we're mainly talking about UK property, and it's the location of the property which is more relevant than the nationality of the property owner.0
-
The first thing you need to buy a property in Italty is a Codice Fiscale - Italian equivalent of a UK National Insurance or tax code - without it you will not be able to purchase.
You need to check that there are no family disputes with the property and check that the person selling has authority to sell, so you need an avocato (solictor) and architect and both of these will set you back about 4000 euros or so on top of any other fees.
Mortgage - to get one in Italy I think you have to be resident there but you could possibly raise the purchase price by increasing your UK mortgage and using the excess for your Italian purchase.
Buying in Italy - expect to pay up to 20% of the property purchase price in fees, taxes and charges, for example if you buy through an immobilliare (Italian estate agent) then by law both buyer and purchaser pay them commission of 4% to 6% of purchase price, the notaire (person who registers the new owner with Italian land registry) gets about 2%, etc etc
You also have to register with the local commune (council) and get permission from them to rent, you also, when you take up residence, get a visit from the local police to make sure you are actually living in it.
You also have to register with the refuse collection office who will bill you based on the square meterage of the property, register for an electricity supply with probably ENEL, gas if the property is connected to the mains - if not then there are various laws regarding the use of bottled gas (someone blew up an apartment building some years ago while using a gas cylinder) - did I mention that you will probably only get a max electricity supply of 3Kw which is a lot less than in the UK?
Also, if the property is miles away from anywhere then you would probably need an Italian registered vehicle - you cannot take your UK one on an extended trip, you would probably invalidate your insurance if you did - and to get your name on an Italian vehicle costs a fortune, in some cases more than the cost of the vehicle.
To pay bills you would need an Italian bank account and if you are going to get one of these you should really buy your own forest in order to be able to supply the tress required to make the paper needed to print out the bank's terms and charges and also you need to practise your signature in readyness for all the paper signing needed.
That will do for now - all a little off topic but gives you some idea.0 -
My brother did this in Spain, which from a complexity POV I'd imagine was similar. A lot more complex than in the UK, you need a solicitor to manage various aspects as well as an agent, there's all sorts of taxes. It was an admin nightmare.After a lot of hassle he sold up, at best he may have broken even though i doubt it.
I can see why you'd do this if you lived there say 6-9 months of the year and let it out the rest. For a few weeks a year though, id' just rent a place, and do without all the hassle, and invest teh money i would have put into a BTL elsewhere.
You did say you were doing this as an investment, what makes you think this is the best way of investing?0 -
I forgot - don't look at buying a property advertised as Nuda Proprieta
This means that you will be buying the property BUT you will be giving the owner the property rent free for the rest of their life, you only get the property when they die and that is why it looks and is cheap, up to 70% less than similar properties.0 -
There must be literally thousands of folk from the UK that have properties in Italy that are buy to let and financed in this way.
What makes you think that? I suspect it's not the case at all, and that most people from the UK who have bought property in Italy have done so either because they live there and are on hand to deal with the inevitable issues, or they have bought without a mortgage.0 -
The first thing you need to buy a property in Italty is a Codice Fiscale - Italian equivalent of a UK National Insurance or tax code - without it you will not be able to purchase.
You need to check that there are no family disputes with the property and check that the person selling has authority to sell, so you need an avocato (solictor) and architect and both of these will set you back about 4000 euros or so on top of any other fees.
Mortgage - to get one in Italy I think you have to be resident there but you could possibly raise the purchase price by increasing your UK mortgage and using the excess for your Italian purchase.
Buying in Italy - expect to pay up to 20% of the property purchase price in fees, taxes and charges, for example if you buy through an immobilliare (Italian estate agent) then by law both buyer and purchaser pay them commission of 4% to 6% of purchase price, the notaire (person who registers the new owner with Italian land registry) gets about 2%, etc etc
You also have to register with the local commune (council) and get permission from them to rent, you also, when you take up residence, get a visit from the local police to make sure you are actually living in it.
You also have to register with the refuse collection office who will bill you based on the square meterage of the property, register for an electricity supply with probably ENEL, gas if the property is connected to the mains - if not then there are various laws regarding the use of bottled gas (someone blew up an apartment building some years ago while using a gas cylinder) - did I mention that you will probably only get a max electricity supply of 3Kw which is a lot less than in the UK?
Also, if the property is miles away from anywhere then you would probably need an Italian registered vehicle - you cannot take your UK one on an extended trip, you would probably invalidate your insurance if you did - and to get your name on an Italian vehicle costs a fortune, in some cases more than the cost of the vehicle.
To pay bills you would need an Italian bank account and if you are going to get one of these you should really buy your own forest in order to be able to supply the tress required to make the paper needed to print out the bank's terms and charges and also you need to practise your signature in readyness for all the paper signing needed.
That will do for now - all a little off topic but gives you some idea.
Hi thanks for this it is the first informative reply I have got so far!
Would the following scheme introduced by the Italian Government in 2014 provide a better option than all the red tape involved in trying to purchase direct or get a mortgage setup? It sounds like the ideal solution if a trusted agent can be used to negotiate with the selling agents initially. The max 10 year term may make this a little outside my budget but it sounds like a good idea.
I would be interested to hear from anyone that has managed to set this up as to their experiences.
http://www.italymagazine.com/featured-story/rent-buy-revolutionary-way-purchase-your-dream-home-italy
https://www.gate-away.com/news/rent-to-buy-a-house-in-italy-how-does-it-work/
https://www.bestitalianmortgage.com/italian-rent-to-buy/0
This discussion has been closed.
Categories
- All Categories
- 343.1K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.2K Work, Benefits & Business
- 607.9K Mortgages, Homes & Bills
- 173K Life & Family
- 247.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards