Buying Property Abroad: The Highs, The Lows, The Benefits, The Fun And The Profits
Italy really is a hard country to classify. It ’s a modern industrialised nation and a world leader in terms of fashion design. On a broader scale, its cultural legacy is equally impressive, with the region of Tuscany alone housing more historical monuments than any other country in the world. It ’s also a Mediterranean country. Towns and villages grind to a halt in the middle of the day for siesta, most of the land is agricultural and an emphasis on old traditions and rituals is still very much to the fore within society.
Italy, with all its striking characteristics, will always provoke a reaction and it ’s usually a positive one. Once visited, it ’s hard not to return. Holidays inspire many overseas visitors and thousands of Brits have settled permanently or have second homes here. If there is a single national characteristic to explain the attraction, it ’s the ability to enjoy life and embrace it to the full.
Italy is in fact made up of twenty different regions and its population often feels more loyalty to region than state. Areas can be quite different to one another and variations are often manifested in cuisine and dialect, dramatic changes in landscape and the huge gulf in standards of living.
The north is discovered Italy. The regions of Lombardy and Piedmont make up the richest and most cosmopolitan part of the country and its two main cities, Milan and Turin, the wealthiest. Lombardy, with its lakes and mountains, has long been tourist territory and this is where much of the British contingent now resides or owns a holiday home.
Tuscany, further south, is where we encounter the most popular image of the country. Famous for its art and rolling hills, Tuscany has been a destination for the British since the days of Queen Victoria, with the wealthiest holidaymakers staying throughout the summer season. It now has the highest concentration of British settlers in the country. The grand image of Tuscany has meant that property prices have always remained relatively high, compared with other regions. Although it is still possible to purchase an old run- down farmhouse for as little as £50,000, the opportunities are getting harder to find. The really cheap deals are in abundance in the south, where prices are considerably still less than in the UK.
The south officially begins below Rome. The capital is within the region of Lazio, which is as far as many tourists venture. Most of those who have settled any further south live in the region of Campania, or in and around the principal city of Naples. The nearby towns of Pompeii and Sorrento attract many visitors and settlers, but the land beyond this is unfamiliar territory to most.
The far south of the country has in fact never been a popular destination for tourists and has long had a reputation for being culturally impoverished, undeveloped and sparsely populated. This image is slightly misleading, as a massive channeling of funds from central government has transformed the region enormously in recent years. The southern Italy of today is far different to that of thirty years ago. Nowadays it can boast a modern system of transport and communication and many success stories within the industrial sector. A huge irrigation scheme has also made much of the land useable for crop production.
However, despite its economic progress, much of the south can still feel distant from the European north. Unemployment remains high and many southerners reluctantly move north, often to supply cheap labour. Consequently, much of the south is under-populated, making it a great unspoiled destination for those looking to escape.
The southeastern coastline, making up the heel of Italy, is the region known as Puglia. This long stretch of land is 400km from top to bottom and its coastal towns and villages principally serve tourists from the north of Italy. The region also sees a small influx of German visitors each season, but doesn’t attract large numbers of any other nationality. Parts of the coastline are stunning, with some of the finest undiscovered and unpolluted beaches in Europe.
The southern tip of Italy, the part known as the shoe, is called Calabria. This region is slightly poorer than Puglia and unemployment here is the highest in the country. However, benefits from investment are now becoming apparent and much of the infrastructure is on a par with other parts of the country. Compared to most parts of the country, this region and the south generally, still offer the best value for money. Before taking the step to buy a property in the south of Italy, it really is important to think hard about where and what to purchase. What you do with the property is also an important factor. For example, is the property going to be used as a second home and occupied solely by you and your family for large parts of the year? If so, then location is purely a matter of personal taste.
Some buyers are tempted to contemplate an area where values look set to rise at a future date, but this isn’t always easy to do. In most cases, prospective buyers are quite content to search an area they like, for a home that suits their needs. When searching purely on this basis, the buyer doesn’t have the problem of worrying about the letting market and the options become boundless. Although the property will not generate an income, it will obviously become a long-term investment and, in most cases, rise in value along with the rest of the market.
When purchasing a property as an income generator, the options become more complex and careful consideration about where you purchase and to whom you rent is necessary.
If you’re planning to buy an apartment for the holiday let market, location will play a vital part in how many bookings you receive. An isolated farmhouse, miles from the crowds, in a beautiful mountain location, might be ideal for you and the family, but will it attract much interest from other holiday-makers? Its important to purchase a property that will attract visitors on a regular basis. Bearing this in mind, locations close to more established destinations would be a more sensible option.
Perhaps the perfect property would be the one that could be let through the busy summer months, then used by the family throughout the rest of the year. It ’s worth remembering that the south of Italy is hot from April onwards, warm until late October and still pleasant throughout our cold winter months.
|There is little point in paying a fortune for a ruin in Chiantishire when there are so many bargains to be found on the other side of the Appenines. Italy’s Marches, bordered both by the mountains and theAdriatic Sea, provide an ideal rural retreat and, now that Tuscany is so expensive, with little new property on offer, a number of Britons are buying there. And access is now much easier - there used to be charter flights to Rimini only in the summer, but Ryanair now flies twice daily from Stansted to Ancona. Although the area is further from the great art centres of Florence and Siena, it has its own attractions, including an annual open-air opera festival in Macerata’s ancient Roman amphitheatre. Closer to buyers’ concerns, regulations on building swimming pools have also eased greatly. But the main pull is the cost. A family-sized farmhouse with a sizeable piece of land can be had for around £80,000. A similar property in Tuscany would cost £190,000 and another £150,000 for restoration.|
Puglia, the heel of Italy, is a popular destination for both Italians and Germans. It offers clean seas and reliable sunshine. The coastline is also seeing the emergence of a number of holiday villages.
The Gargano region, in the north of Puglia, has some of the best beaches you’ll find in the region and the lush green forest inland is more reminiscent of Austria than what you’d expect at the tip of Italy. Unlike most of Puglia, the Gargano promontory is diverse and also has lagoons and a large mountain range. As a result, it also has the highest concentration of tourists during the summer months. Many Italians have second homes here and property along the coast is the most expensive in Puglia.
Mattinata is an excellent resort, packed through late July and August, but also busy enough from June to attract plenty of visitors looking for accommodation. Out of season, the town is almost deserted and looks beautiful with its olive groves and pine forests surrounding a magnificent beach. A few miles up the coast is the resort of Pugnochiso, which lays claim to another terrific beach, though the popularity of this once-forgotten village has risen dramatically in recent years and the resort now has a vast Club Med complex. This has altered the original tranquil feel, but panoramic views of the bay are still a stunning attraction.
Further along the coast is Vieste, the holiday capital and main town of the Gargano region. Once again, Vieste has some superb beaches, the best of which is Scialmarino, 3km from the town, but easily walkable if you follow the coastline. The old part of Vieste contains some wonderful architecture and out of season has a magical atmosphere. The town is packed throughout August and much of the accommodation is booked months in advance. Like the rest of the region, Vieste has a steady stream of visitors from June onwards and would generate a healthy income over the summer months. The landscape becomes flat and generally less impressive further down the coast towards Bari. The beaches here are few and far between and less pleasant. The local towns are often just dusty backwaters, with a slow pace of life and therefore not a natural choice as holiday destinations. As the young move away in search of employment, so many of the villages become more and more deserted. With such low demand for property, the prices are low to match. Inland, an old unrestored farmhouse can be picked up for as little as £20,000. Properties on the coast are always going to cost a little more, although the prices are much less than in the Gargano. A one-bedroom apartment sells for around £50,000 and a two-bedroom from £65-70,000.
Beyond Bari and heading further south, the coast becomes more craggy, with many cliff-top villages towering high above the coves. In this particular part of Puglia, amazing ‘trulli’ houses dominate much of the landscape. These strange cylindrical, whitewashed buildings, with grey conical roofs that taper to a point, date back 3,000 years, although it ’s unlikely that any in existence today are more than a few hundred years old.
No one yet knows why they’re only found in this part of Italy, or deciphered why anyone would need to build to such strange specifications, although their coolness in the summer months could be an attraction. There has been a resurgence in interest in these properties over recent years and a large, restored one could cost over £300,000. However, smaller trullis in need of repair can still be bought for around £60,000.
Calabria is the foot of Italy and even in Puglia is regarded as the poor relation. This is also the nearest region to Sicily and links with the Mafia and the underworld have done little to improve its reputation. However, it should be noted that any signs of criminal activity are hard to detect and that the area feels very safe.
|Buying a house in Venice can provide you with an ideal retreat as well as a financial return. If you are prepared to rent out your property in the high season, you can get annual returns of 10%-15% of the purchase price, often allowing you to cover both mortgage payments and basic running costs. There are still areas where it is relatively cheap to buy. In the southern quiet residential district of Dorsoduro, one-bedroom apartments in the sought- after area between the Accademia and Peggy Guggenheim’s museum and the sunny southern promenade of the Zattere start at around £200,000. More up-and-coming is the island of Guidecca, across from Dorsoduro.
The Hotel Cipriani and Rentals in Venice can bring in as much as 15% the opening of Harry’s pa and properties are still reasonably priced. Dolci (sister to the famous Harry’s Bar) have increased the district’s cachet and it is becoming popular with artists and designers. One-bedroom apartments start at £160,000. If you are determined to live in a ‘piano nobile’ apartment on the first floor of a palazzo, then the district of Calazzo is the place to start. The least expensive options are available here, with prices starting at around £650,000, but the authorities have first refusal on historical properties and take 60 days to decide. Be aware that there is also a 7% registry tax to pay, reduced to 3% if the building is listed, and remember that taking on a wreck is a mistake, unless you are prepared to deal with the complexities of planning permission in such an historically important place and the logistics of bringing in a building team. Otherwise the signs are good: the Italian Government is dealing with the flooding problems and mortgages are easily available.
With government money pumped in to kickstart the region, many places have changed quite dramatically. New construction is underway throughout much of the area and tourism is showing early signs of development. Calabria’s combination of mountains and unspoiled coastline, often in close proximity, gives the area a powerful appeal.
The best resorts are found along the Tyrrhenian Sea, to the west of the region. The eastern side of Calabria faces the Ionian Sea and is far less interesting and developed. Here the landscape is mostly flat and monotonous, although occasionally you stumble across some superb spots. Property prices reflect the disparity between the two sides of Calabria, with the Ionian coast being up to 30% cheaper that the west coast.
The northern stretch of the Tyrrhenian coast is the most inspiring and visited (mainly by Italians) part of the region. Don’t let this deter you though. Even in the summer, it ’s still possible to find deserted stretches of coastline. As well as their great beauty, the sheer cliffs and rocky coves have prevented any real tourist industry from developing.
Maratea is the main town in this area and a landing dock for the yachting crowd. The boats bring in visitors and their money. Consequently, the area around the port is fairly smart and has some decent bars and restaurants. The whole area is surrounded by excellent sandy beaches, a number of which are still undiscovered. If you’re thinking of renting the property for part of the year then Maratea is a good spot to buy. There’s a healthy demand for accommodation during the summer season and with a constant influx of sailing boats throughout the year, an apartment in town could offer a decent return.
It ’s possible to strike a deal with the tourist office, who act as agents for a number of property owners in this area. Rooms are cheaper than hotels and so attract a lot of interest. Out of season, the town is quiet and the beaches deserted, but with a good supply of shops and facilities, it makes an excellent base for exploring the area.
Further south are the towns Praia A Mare and San Nicola Arcella, both offering some decent beaches and property prices to compare favourably with Maratea. Next, the town of Scalea, has seen a heavy concentration of holiday development, most of it unchecked, which has left this once pretty town looking something of an eyesore. An apartment here would generate an income for a few months, but I wouldn’t suggest it as an attractive holiday location for the rest of the year.
Diamante, about 15km down the coast road, is an altogether more interesting proposition. This is a chic seaside town with attractive whitewashed houses. The area around the port is particularly up-market. A one-bedroom flat will cost around £70,000, but generate a decent income throughout the summer season.
Property prices away from the coastline are considerably cheaper. As in Puglia, many of the small country towns inland are almost deserted. Much of the existing property sits unoccupied and can often be bought for next to nothing. Because there is no demand for these types of property, they are rarely advertised. If you’re looking to buy, often the only way to find information is through word of mouth. Whilst it ’s tempting to pick up a decent sized flat for under £30,000, one should always remember that famous expression ‘location, location, location’. Most inland spots attract few visitors and there is consequently little opportunity for renting.
If you’re aiming for a return on an inland investment, you should stick to the towns near to the great beauty spots. One such area is known as the Sila. Covering a wide peninsula, the Sila is a large mountain range with some of its peaks reaching up to 6,000 feet. This is an interesting part of Calabria and offers something for all seasons. Many stay here in the summer to escape the heat, but the winter also attracts skiers. Autumn and springtime also bring weekend visitors to the area, when horse riding and fishing are popular activities.
Despite some deforestation, much of the Sila range is still covered by trees. The regional government has imposed strict rules concerning tree felling and building regulations are also very tight, safeguarding its long-term future. This is comforting news for would-be investors, as many busier resorts areas have witnessed ugly new developments, which decrease the value of individual homes.
Camigliatello is one of the better-known towns within the range. It is well facilitated and fairly busy throughout the summer and winter seasons, so that accommodation is easy to rent out.
Lorica is another similar town, geared towards the tourist industry and consequently an easy place in which to let. With a number of conservation areas within the Sila range and many isolated villages en route, you might prefer to purchase a property in a quieter location.
A one bedroom apartment in Camigliatello or Lorica can be purchased for around £50-55,000, although similar properties within the Sila can be bought more cheaply, if you opt for lesser known places. As a whole, the area makes a great spot for a family home and has plenty of letting potential. It ’s worth remembering that the Sila is busy throughout the year and a property here can actually earn a greater yield than in a coastal town.
The southern Tyrrhenian coast features some excellent spots, too. None better perhaps than Tropea. This fashionable town is also one of the prettiest and although it is busy at the height of summer, it still manages to maintain an element of exclusiveness. There are good beaches all around, some stunning architecture and a wide variety of restaurants. Property here is said to be the most expensive in Calabria. A property in the town would be very easy to let during the summer season.
If you want to rent out your property, the best option is to cater for the short-term holiday market. This guarantees you an income, yet still leaves the property available for the rest of the year. With temperatures soaring well into the high 30s and crowds swarming around the beaches in July and August, it ’s perhaps wiser to use this period as an income generator. I personally prefer the region during the quieter and cooler parts of the year. I’d also advise against a long-term lease, as Italian law favours the tenant and you wouldn’t be able to use the property yourself.
It ’s worth remembering that estate agent ’s fees are high in Italy, sometimes as much as 8%. There is also the dreaded purchase tax to pay. This is called IVA and is the equivalent to our VAT. It is sometimes included in the price, sometimes not. At the end of the day, nothing is simple in Italy. Properties are bought through the notary system and the notario’s role is to check that the property is transferred legally and to validate all the documentation. Considering all the legalities and extra expense, it ’s always worth adding on 15% to the original purchase price to cover these costs. Although this might all sound like a headache, it ’s worth reminding yourself of the attractions Italy has to offer. With superb weather, fantastic cuisine, a cultural legacy second to none, wonderful architecture and some exquisite landscapes, there are few places to match it in the world.
For the time being, Calabria and Puglia are still relatively undiscovered and regions which we’d wholeheartedly recommend.
“95% of Italian men have never operated a washing machine.”