Investment Strategies for Italy
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Investment Strategies for Italy
Short Term Investment Strategy - Key OpportunityItaly benefits from fantastic weather for the great majority of the year, while being within easy reach of most European Capitals. The climate is much more attractive than many European capital cities, the prices are still very low compared to countries located very close to Italy (for example Spain). However, the undeveloped regions and relatively unknown regions like Calabria gain more and more interest, prices will increase steadily and surely, therefore the early investor in Italy will see very rewarding return on investments. Currently due to the reasonably low profile of regions like Calabria, investment opportunities are ripe for the savvy investor.
Infrastructure
As one of the worlds leading economies, with one of the highest GDP’s and every indication that healthy growth is due to resume over the coming years, Italy offers the investor a secure location for investments into real estate. Contrary to many emerging markets, Italy offers the infrastructure of a developed country yet in some regions at emerging market prices.
Timescale
Investors should know that the average term of investment should be between 12 and 18 months (from reservation to resale) as the average construction time for projects in Italy is between 12 to 24 months. Generally, investors are required to pay between 20% and 40% on private contract, with one or two payments during construction the remainder being paid upon completion. A property can be held in reservation for as little as 3.000 €
While the returns on short term investment can be very appealing, the returns expected over the next five to ten years in Italy point to much higher returns.
Key Risks
One important thing when investing large quantities of money is of course considering all all of the inherent risks. The main point when dealing with properties is knowing how attractive can it be for potential buyers, because if your property is considered as magnificent or outstanding, risks will be practically inexistent. It all depends on the location, the proximity to the beach, the surrounding facilities, etc.
To determine the correct purchase, the investor should take into consideration all and any factors which will influence the demand for property within the timeframe that their strategy dictates, to be able to assess the risk associated with the development they are considering. Key factors to consider is the increase or decrease of permanent and temporary residents in the area as well as the increasing or decreasing amount of tourists visiting the region. Local infrastructure, facilities available on site and increase of employment opportunities in the region will also dictate how easily the property will be resold or rented in the interim. As always with real estate investments, holding on until the perfect time to sell is an absolute necessity.
If the property you are about to buy is located in a tourist resort, try to find out what facilities it will have and the distance to the ones it lacks. Considering that Italy is among the top five tourism destinations in the world, it is considered one of the more secure investments currently available.
Medium to Long Term Investment Strategy - Key Opportunity
While pre-release and select off-plan prices continue to remain competitive, Moroccan capital appreciation will continue its healthy growth for many years to come. While the north of Italy offer opportunities for investors with large budgets, the southern, less known regions like Calabria and Sicily are more appealing to investors with more restricted budgets.
From 2001 to 2005, the number of tourists visiting Italy continued to grow by almost 5% with Germany, the UK and the United States being the main countries of origin, accounting for almost half of the international tourism nights. Additionally, almost 84% of Italian tourist trips were internal
Safety
Italy is a modern country and compared to other comparable destinations, it is considered safe country. Statistically speaking and according to the Seventh United Nations Survey of Crime Trends and Operations of Criminal Justice Systems, there are less crimes committed per capita in Italy than either the UK, the USA, France, Germany, Finland or Denmark.
Italy, as a modern country is socially similar to other European countries with regards to etiquette and good manners, common sense should be used when in doubt.
Legal advice
As with any overseas property investment, once you have decided on the property you wish to purchase, you will require legal representation to ensure that your best interests are protected at all times. The first and foremost concern should be to carry out a full due diligence inspection of your chosen property. While IPW does our own due diligence checks on any project which we promote, including checks on the legitimacy of the project, solvency of the developer, etc, every overseas property investor should perform their own due diligence on the development of their choice, either through their legal representatives or by any other research tools they see fit.
By appointing independent legal representation, the client can be sure that all necessary paperwork is in place before signing purchase contracts. Most reputable developers have Bank Guarantees in place to protect investors’ interests.
Once the due diligence checks have returned favourably, a private contract will be prepared between the developer and the investor which will specify all of the terms and conditions including delivery date. Upon signing this contract, the investor makes a non refundable payment (an agreed percentage of the sales price minus the original reservation deposit).
The property sale process is finalised before a public Notary with the investor and a representative of the developer signing the Title Deeds. Once this document is signed, the investor receives the keys to the property and takes possession.
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