Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • 83dons
    • By 83dons 5th Apr 18, 11:12 AM
    • 57Posts
    • 1Thanks
    83dons
    Buy to Let in Italy
    • #1
    • 5th Apr 18, 11:12 AM
    Buy to Let in Italy 5th Apr 18 at 11:12 AM
    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.
Page 2
    • AnotherJoe
    • By AnotherJoe 10th Apr 18, 1:36 PM
    • 9,436 Posts
    • 10,442 Thanks
    AnotherJoe
    This is the Italian version of Rightmove - the link shows properties for sale in Tuscany but they don't show whether or not seller would accept the rent to buy scheme, should you want to go down that route.

    https://www.casa.it/vendita-residenziale/in-toscana/lista-1

    If you do browse, bear in mind my comment above about Nuda Proprieta

    If you click on Affitti it will show rentals, which can be had long term from about 450 euros per month, depending on location and size - usually if you rent then the only fees you pay to be a renter are deposit which is agreed with the owner and could be anything up to 3 months' rent, and if you rent through an agency the total you pay the agency is one month's rent which is their commission, which the owner also pays as well.
    Originally posted by D_M_E
    So for say 900 Euros (whats that, 750?) the OP can get two months a year in Italy with zero hassle, move elsewhere if he hates it, and invest his money with close to zero costs in something thats a damn sight easier and cheaper to manage in the UK and should he do well with it, use the proceeds to buy a place in Italy without a mortgage or cockamamie rent to buy scheme, if he hasn't come to his senses by then.
    • Plus
    • By Plus 10th Apr 18, 8:13 PM
    • 356 Posts
    • 279 Thanks
    Plus
    So for say 900 Euros (whats that, 750?) the OP can get two months a year in Italy with zero hassle, move elsewhere if he hates it, and invest his money with close to zero costs in something thats a damn sight easier and cheaper to manage in the UK and should he do well with it, use the proceeds to buy a place in Italy without a mortgage or cockamamie rent to buy scheme, if he hasn't come to his senses by then.
    Originally posted by AnotherJoe
    I doubt you can take a market rental for two months for EUR900 - that will likely be on a long term contract which google tells me is 3 years. There are shorter term contracts that you might get, but if you can get one for two months it may well cost more.

    OP: do you know where you want to buy? If so, find a good local lawyer. They will know more about the pitfalls there might be in buying locally.

    It's probably worth bearing in mind that idyllic rural settings are usually ones with dire housing markets: they're idyllic because nobody wants to live there because there's no work. They're cheap because there's no buyers, or the properties aren't legit.

    However, as has been said, if you can avoid peak season then making an arrangement with someone where you rent for N months of the year could work out. A lot of holiday rentals are only busy during July/August, so taking a regular rental for March/April/May (for example) might work for both parties.

    Do the sums: does N months of paying rent work out better than paying mortgage interest and maintenance? How many months would you need to let your own place to break even? What return could you get from investing your money instead of buying a property?
    • D_M_E
    • By D_M_E 10th Apr 18, 9:00 PM
    • 1,489 Posts
    • 63,488 Thanks
    D_M_E
    As I indicated in my post above, you can get a LONG TERM rental from about 450 euros a month, and no, you will not get that for a SHORT TERM rental of 2 months. As far as I know, long term rentals start at a minimum rental period of 2 years and can be extended thereafter. The usual period is what is called a 4+2 which means a 4-year rental with the option of a further 2 years at the same rent as the original 4 years, making 6 years in all.

    Rentals over 3 months or less - even in some cases up to 6 months - are usually classed as holidays and for that you MIGHT get one for about a thousand euros per month, again depending on size and location. I don't think these would be offered by an immobilliare.


    Note that in Italy, if you do go for long term rental, you may find that all you get for your money is the 4 walls, a roof, a floor and doors, nothing else. If you want a kitchen, then either you install your own or pay extra on the rent for some old decrepit thing left by the owner.
    This is also true if you buy, a lot of sellers - the vast majority - remove and take their kitchen when they sell so that they can install it in their next property.

    EDIT - a lot of sellers will also remove everything inside the property so all you get is the walls, floors, external doors and windows. Some also take the light fittings and plugs and switches - I kid you not!

    Also, for a long term rental, if anything goes wrong inside the rental then the renter is mostly responsible for fixing whatever it is, the same as if you owned the place, save for structural and roof problems which are the owner's problem.
    Last edited by D_M_E; 10-04-2018 at 9:06 PM.
    • 83dons
    • By 83dons 4th May 18, 11:29 AM
    • 57 Posts
    • 1 Thanks
    83dons
    We owned a small property in the baroque "centro storico" of a small Italian city in Puglia in the far south for 5 years from 1999-2005 and while our experience is thus out of date, and culturally and geographically very different from your "Chianti-shire" dream, some elements of our experience might be relevant.

    Capital Appreciation?
    We used it as a holiday home, and didn't plan to rent it out, and as it only cost 33,000 euros, it didn't represent much of a risk, but on the strength of that time, I'd flag up a couple of cautions.

    If you plan this as a long term investment, don't bank on values rising or you even being able to realise the value of your investment fast (i.e to sell or liquidise your asset). So if the return doesn't cover the mortgage, you might struggle to get out with your shirt.

    As you will have seen from basic research on Google (e.g. https://www.globalpropertyguide.com/Europe/italy/price-change-10-yearsn the south ) there has been negative inflation, i.e. prices have dropped over the past ten years, in Italy compared with steady growth in UK and meteoric rises in some countries (like there was in the UK in the late 20th Century). We were really lucky to sell when we did, as places used to stick on the market for years. And, having spent E5-7k on rewiring, kitchen and plumbing, in effect lost money by selling for 36,000 Euros, but, because the pound had plummeted against the Euro in that time, made a nice little profit when repatriating the money back to Sterling.

    Italy's economy is a basket case, so I can't see that position changing in years to come. In fact if the Populists, Rightists and neo-Nationalists continue their electoral success, they could even crash out of the Euro or go the way of Greece?

    Letting fees
    We did offer it to local Brit friends who were trying to start up a rental business, but in effect, we lost a few Euros on that because fees, linen, cleaning, publicity, meet and greet etc, soaked up the meagre rental income they achieved. (But then it was just a town centre one-bed apartment with no pool or grounds; presumably you plan to buy something more attractive? Although that implies lots more cost and risk?)

    The up-side?
    The process of buying was much more straightforward than in the UK; the "immobiliare" (agent) was obliged to act more professionally and accountably that UK EAs and provide translations and assurances that the title was sound, and once you committ to buy, the vendor can't back out without penalty. But maybe we got lucky.

    Local bureaucracy was a bit of a nightmare (it took months and at least six visits to "Aquadotte Pugliese" - or whatever it was called - to sign a water contract) but the Town Hall seemed wholly incapable of collecting the local eqauivalent of Council tax so we gave up trying in the end after severl fruitless attempts; maybe Toscan is more digital than Puglia.

    In summary?
    Having owned small second home and BTL flats in UK however, I would be inclined to examine what you really want to achieve however? If it's a lovely holiday in the sun; fine - but even in Puglia, it froze occasionally in winter in our inland city, and we didn't have central heating. We eventually worked out that as flight prices and car hire rates rose, and restaurant meals stayed stubbornly high in price (unlike the less touristic areas of Spain- where they tumbled in recession) it was cheaper to simply rent or take short holidays.

    If its rental income and capital appreciation, I'd feel more comforatble in UK- and even that varies by region. We pumped the 36k Euros from Italy into an (obviously much dearer) English sea-front flat in Kent; but after deciding to rent that, we found % return on capital was low because local wages and rents were so poor. So we flogged that too after 3 years, spent exactly the proceeds on a slightly cheaper BTL in south suburban London; and increased the rent return massively from 600 pcm to 900!

    Which funds quite a few European holidays and has returned 60% capital growth; I shall be pleased to pay CGT when we eventually sell; we wouldn't have got that on an overseas property, and at least I understand UK laws, fees and systems.

    Sorry that I've not really answered your "anyone done this" Q. But do the risk analysis before committing!

    Maybe go over and rent there yourself for a few weeks off season before you buy? And there might be other benefits; at least it forced me to learn a few words of Italian at part time classes to keep the grey cells active. Buona fortuna!
    Originally posted by AlexMac
    Many thanks for taking the time to write this very interesting!
    • 83dons
    • By 83dons 4th May 18, 11:31 AM
    • 57 Posts
    • 1 Thanks
    83dons
    If you can find a mproperty and get an agreement with the vendor, then using the Rent to Buy scheme COULD be the right way to go for you, but you should note that properties sold under such agreements tend to be higher priced than "normal" sales, but you would first have to find someone willing to sell to you under such a scheme.

    The Italian Rent to Buy scheme does work, but you need to negotiate very carefully with the vendor and make sure what was agreed is actually written in the contratto which both vendor and buyer sign.

    Buyer needs to negotiate deposit - which can be any agreed amount from 10% of agreed property price - and monthly rent and agreed proportion of outstanding balance at end of the term.

    The agreed amount can be split into 2 parts, part 1 is the agreed monthly payment in addition to the rent, and part 2 is the agreed final payment at the end of the term, payment 2 can be anything from zero upwards and MUST be paid to gain full ownership of the property.

    Also, you will find that the Italian government will want their share of taxes, fees and charges at the start, not at the end of the contract when the renter/buyer finally takes full ownership.

    One of the posters above mentioned water - in the cities, you have to go to the water company's offices and ask them to give you a supply if it's been turned off.

    What happens is they turn up at your property and fit a water meter then turn on the supply, usually within a couple of days.

    One interesting point is that, if you don't get nall the right permissions for renting the the Financial Police have the power to confiscate the property and sell it off, but I understand that this very rarely happens - there was a case about 5 years ago somewhere south of Florence - in Tuscany - where the estate owners were transferring property between themselves and renting out to family and basically evading taxes and charges on various rents and transfers, the FP got wind of it and eventually confiscated the entire estate, total value about 45million euros, all lost to the state.

    As regards to the weather, they have in the last month had a lot of snow in Tuscany which caused some surprise, rivers and streams are even now runnig high with all the melted snow and rain, they are not used to the stuff, they have bins on the side of the road and people just help themselves to grit from them to spread, I don't think the authorities do it like they do here in the UK.

    Back to rent to buy - if you do go for it, get a good translator and very carefully scrutinize the contract before signing to make sure there is nothing unexpected and everything is written down as agreed, and MAKE SURE you understand the penalties and consequences if either side break the contract terms.
    Originally posted by D_M_E
    Thanks for taking the time to reply.
    • 83dons
    • By 83dons 4th May 18, 11:39 AM
    • 57 Posts
    • 1 Thanks
    83dons
    Ok thanks for the variety of replies. If I am to buy or rent to buy then it is clear I need to start saving up to cover deposit and fees so that isn't a realistic short term goal anyway. I may look into regular rental for holiday purposes. I would only be able to spend a month or two a year over there myself but I wonder if its possible to sign up to some kind of monthly long term deal and when me or the family aren't using it would it be legal to sub let the place to people I know at a cost as long as I continue to cover the monthly rental costs I cant see why the owner would have too much cause for concern? There may be tax implications though and I have no clue as to local tax laws!
    • agrinnall
    • By agrinnall 4th May 18, 3:06 PM
    • 20,157 Posts
    • 15,880 Thanks
    agrinnall
    I don't know anything about Italian tenancy law but it would be very unusual in the UK to find any tenancy agreement that allows the sort of sub-letting you are talking about. And I would imagine that the owner would have major concerns about somebody that they have never vetted themselves occupying their property - would you allow that in your home?

    And that's before you consider the massive risk to yourself, if your sub-tenant trashes the property it's you that will face the bill.
    Last edited by agrinnall; 04-05-2018 at 3:09 PM.
    • 83dons
    • By 83dons 4th May 18, 3:43 PM
    • 57 Posts
    • 1 Thanks
    83dons
    I don't know anything about Italian tenancy law but it would be very unusual in the UK to find any tenancy agreement that allows the sort of sub-letting you are talking about. And I would imagine that the owner would have major concerns about somebody that they have never vetted themselves occupying their property - would you allow that in your home?

    And that's before you consider the massive risk to yourself, if your sub-tenant trashes the property it's you that will face the bill.
    Originally posted by agrinnall
    Yes it did seem kind of risky. If it was all people you knew though and you got them to sign an agreement taking responsibility for any damage then it might work. The owner is surely only worried if he A gets his monthly rent on time and in full and B that he doesn't have do much repair to the property. There may be tax issues though as I said due to money changing hands.

    I have a feeling this was the sort of arrangement that was going in New York when I stayed recently in a flat in Manhattan that I booked through AIRBNB. The person told me that I had to keep the noise down and if any neighbours asked who I was to tell them I was a friend of the family! On reflection he was probably renting his apartment and sub letting it out using AIRBNB?!
    • D_M_E
    • By D_M_E 4th May 18, 9:42 PM
    • 1,489 Posts
    • 63,488 Thanks
    D_M_E
    As far as I know, once you have signed the tenancy contratto in Italy you can do what you like, the owner is only interested in getting paid the rent.

    If you do go for long term rental, be advised that this will be for a minimum of 2 years and, if you are only going to spend a couple of months there then it's just not worth it - you will be paying rent for the other 10 months as well as the Italian equivalent of council tax, water rates, electric, gas (if any), refuse disposal and various other charges, you will need an Italian bank account for paying all these as well as the rent.

    Bank accounts - there are 2 options, one for locals with an Italian address and one for foriegners who do not have such an address.

    The local one costs about 3 to 5 euros monthly while the other one will cost you from 10 to 20 euros monthly, both depending on what bank you choose.

    As I said in a previous post, once you sign the contratto you are resposible for everything, including any repairs, inside the property and this is why a short term rental usually costs per month almost the same - or more - as a hotel room or holiday apartment would for a month.

    As in the UK, once your rental period has ended, you either negotiate a new tenancy or hand back the keys and if you hand back the keys the property must be in more or less the same condition as when you got it.

    More or less - things such as holes in the wall for fixing a kitchen would be fine but nothing major.

    What most people do if they want to move out at the end of a long term rental is don't pay the rent for the period which equates to the deposit and let the owner keep the deposit as rent for the end period.

    Renting it out - you are supposed to declare any rent you receive both to the Italian and UK tax authorities but a lot of people don't do this.

    Buying - as I said above, there are various taxes, fees and charges to pay on purchase and, as a first time buyer in Italy, allow 20% of the purchase price to cover these and you will get a bit of change out of that - the fees recently went up, I don't know what they are today, but 20% of purchase price would cover them.
    For any subsequent purchase which you may decide to make the fees will be higher.

    Some people buy at aste - like a UK auction - but you have to put down 10% to 50% deposit, usually by checque or draft drawn on an Italian bank, BEFORE you bid and if you are not the winning bidder then this is refunded in full.

    One other source of property is to look at notices in the local council offices - where you will sometimes find details of siezed properties - and notices in local bank branches, where you will occaisionally find details of mortgage repossessions, but be aware that buying at aste or through the council or bank that you could end up also paying thousands of euros extra in unpaid spese condominiale - basically what are called here in the UK maintenance and management charges for the building the property is in - which were left unpaid by the repossessed owner, but not all properties come with such encumberances, just something to bear in mind.

    Getting around in Italy - the taxis cost a fortune and you will find that, if there is a train station near where you are and where you want to go then the train will normally be cheaper than the bus but if there's no train then bus or expensive taxi it will be.
    • 83dons
    • By 83dons 8th May 18, 11:38 AM
    • 57 Posts
    • 1 Thanks
    83dons
    As far as I know, once you have signed the tenancy contratto in Italy you can do what you like, the owner is only interested in getting paid the rent.

    If you do go for long term rental, be advised that this will be for a minimum of 2 years and, if you are only going to spend a couple of months there then it's just not worth it - you will be paying rent for the other 10 months as well as the Italian equivalent of council tax, water rates, electric, gas (if any), refuse disposal and various other charges, you will need an Italian bank account for paying all these as well as the rent.

    Bank accounts - there are 2 options, one for locals with an Italian address and one for foriegners who do not have such an address.

    The local one costs about 3 to 5 euros monthly while the other one will cost you from 10 to 20 euros monthly, both depending on what bank you choose.

    As I said in a previous post, once you sign the contratto you are resposible for everything, including any repairs, inside the property and this is why a short term rental usually costs per month almost the same - or more - as a hotel room or holiday apartment would for a month.

    As in the UK, once your rental period has ended, you either negotiate a new tenancy or hand back the keys and if you hand back the keys the property must be in more or less the same condition as when you got it.

    More or less - things such as holes in the wall for fixing a kitchen would be fine but nothing major.

    What most people do if they want to move out at the end of a long term rental is don't pay the rent for the period which equates to the deposit and let the owner keep the deposit as rent for the end period.

    Renting it out - you are supposed to declare any rent you receive both to the Italian and UK tax authorities but a lot of people don't do this.

    Buying - as I said above, there are various taxes, fees and charges to pay on purchase and, as a first time buyer in Italy, allow 20% of the purchase price to cover these and you will get a bit of change out of that - the fees recently went up, I don't know what they are today, but 20% of purchase price would cover them.
    For any subsequent purchase which you may decide to make the fees will be higher.

    Some people buy at aste - like a UK auction - but you have to put down 10% to 50% deposit, usually by checque or draft drawn on an Italian bank, BEFORE you bid and if you are not the winning bidder then this is refunded in full.

    One other source of property is to look at notices in the local council offices - where you will sometimes find details of siezed properties - and notices in local bank branches, where you will occaisionally find details of mortgage repossessions, but be aware that buying at aste or through the council or bank that you could end up also paying thousands of euros extra in unpaid spese condominiale - basically what are called here in the UK maintenance and management charges for the building the property is in - which were left unpaid by the repossessed owner, but not all properties come with such encumberances, just something to bear in mind.

    Getting around in Italy - the taxis cost a fortune and you will find that, if there is a train station near where you are and where you want to go then the train will normally be cheaper than the bus but if there's no train then bus or expensive taxi it will be.
    Originally posted by D_M_E
    Thanks for taking the time to reply in such detail. Think I will get saving for a deposit to buy and also see how the political landscape shapes up in the next couple of years as property may take a nose dive depending on the state of the economy over there a la Greece. I wouldnt want to buy then for the country to go bust and lose a heap of money overnight. I will look into rental rates in areas I like in the meantime to see how they shape up. I might sound out some owners over there who are advertising long term leases about if they mind me sub letting as long as they get paid and can confirm with them the various charges I will be liable for while renting.
    • D_M_E
    • By D_M_E 8th May 18, 2:10 PM
    • 1,489 Posts
    • 63,488 Thanks
    D_M_E
    If you are going to go for a long term rental and your chosen property has spese condominiale fees, then I suggest you get your share of the fees written into the contract so that you know exactly what you are paying for these each month. Ask that your share be set at a fixed amount. This will be payable on top of the rent, usually to the managing agent.

    Also note that some owners will try and get you to sign a form at the end of your rental period - DO NOT SIGN as this is an attempt to make you pay the rent and fees until someone else has been found to rent the place.

    If you don't - the fees are usually split into owner's share and renter's share - then some owners will try and laod some or all of their share onto the renter, such as owner's insurance, cleaning charges and other maintenance charges such as roof repairs, building repairs, lift repairs (if there is one), etc.

    Ask about what various fees you will be expected to pay when you sign the contract, not when you are thinking about it - what you propose gives the owner a good chance to ask for higher rent - the only thing you need to ask about is the sub letting, all other fees and monthly charges I have detailed above.

    Also consider, once you have found somewhere and signed the contract, getting a local to keep an eye on the place when you are not there - keep it clean etc worth a few euros amonth.

    Political situation - the latest is that the largest party after the latest election cannot agree to form a government with any party so it looks like there will be an interim goverment appointed by the President and new elections taking place within the next 6 months.

    The largest party - 5 Star - have grown from nothing over the last 5 years to be the largest party today and one of their aims is to take Italy out of the euro, if they win an outright majority at the next election it's only a matter of time before they achieve this objective.

    There is also our own UK Brexit agenda - once this event occurs, expect to pay visa charges to visit Europe and probably visa charges every time you cross a border, there would I think also be decisions made to terminate flights to certain destinations, making it more costly to get to where you want to be, not to mention currency exchange rates - these could see downward pressure from Brexit and from a 5Star victory
    Last edited by D_M_E; 08-05-2018 at 2:15 PM.
    • D_M_E
    • By D_M_E 8th May 18, 8:53 PM
    • 1,489 Posts
    • 63,488 Thanks
    D_M_E
    Something else to consider - you need to register with the local comune - council - and get a residency permit.

    This will cost you anything from 30 euros to about 100 euros and you have to get it as soon as you either buy - either outright or using the rent to buy scheme - or sign a long term rental.

    There is also health insurance to consider - at present for short stays, holidays and such, the EHIC is useful.
    This means you get the same as the locals get and have to pay the same but you can reclaim anything you are charged from the NHS.
    If you are there for an extended period then either you have insurance to cover any costs or you opt for the state system and they submit a claim on your behalf to the NHS.
    What will happen after Brexit is anyone's guess, but reports are that such reciprocal arrangements will be terminated once the UK leaves Europe, leaving many people exposed to no healthcare arrangements unless they have long term insurance cover.

    Talking about insurance - contents insurance in Italy costs about 3 times what it does here in the UK and as for buildings insurance should you decide to buy this also is not cheap as it is in the UK, and that earthquake risk is often impossible to get.

    EDIT - if you do go for a long term rental then you will need to get a Codice Fiscale for this - it's just an Italian tax code but you must produce one when you buy, long term rent, apply for gas, electric, water, residency, phone, broadband, refuse collection, buy an Italian car and in most cases get an Italian mobile phone or SIM and also some shops will ask you to show it when you buy a PAYG topup. I think you also have to quote it if you take out an Italian tv licence or take the Italian driving test, which brings a whole new raft of hoops to jump through if you do one, but you can at present simply - nothing is ever simple in beurocratic Italy - change your UK one for an Italian one but, after Brexit expect to have to take the Italian test.
    Last edited by D_M_E; 08-05-2018 at 9:08 PM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

168Posts Today

1,383Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin