Real Estate investment in Italy
The real estate market has always been the most coveted sector by investors, who usually consider it to be quite stable and solid. In fact, thanks to its nature as a real asset, the related investments are characterized by low correlations with equity markets and stable cash-flows overtime, unlike stocks and bonds.
Investing in a real estate does not only refer to a simple purchase of a property to realize gains through rents income or capital appreciation, but also to indirect and different approaches, that have grown thanks to the enlarging internationalization and globalization of markets; in fact, more sophisticated and specialized investment products are taking place for further diversified portfolios. This type of investment in portfolio dynamics and real estate evaluation require a high knowledge of the real estate market. Not professional and offhand approaches to this world can lead to several risks, hence it’s essential to know the territory where you are going to operate, since the real estate market is affected by several local circumstances and the state of affairs may radically change depending on each district of each city.
Why investing in Italy?
In recent years Italy has performed very well in the real estate market, both residential and commercial. The recent reforms, in fact, had renewed the related discipline, improving and simplifying the fiscal and commercial Italian environment, bringing more and more foreign investments.
Nevertheless, investing in real estate in Italy, and in a foreign country in general, certainly exposes the investor to multiple legal and tax issues of Italian and international law; the investor should always seek competent legal assistance before embarking in any real estate investment project. An international law firm is the best strategic choice to properly advise and guide the foreign investor so that all issues arising from the interaction of the two different legal systems are effectively addressed.
What sort of property you should go for?
Before buying a property approaching an investment, it is important to understand the difference between the several kinds of real estate. Is buying house the correct option to consider? Alternatively, might it be better to invest in a commercial property? Let’s have a look:
- Residential property: including properties such as houses, holiday properties, townhouses and apartments, the residential ones are the most desirable type of investment, thanks to their diversity and flexibility. They can be rented both for a short term (e.g. seasonal agreements, bed & breakfast, etc.) or the whole year, depending on the investor’s needs.
- Multi-family residential property: a valid alternative to single houses, multi-family properties have several units in one building, meaning several rent payers and more vacancy coverage possibilities for the investor.
- Commercial property: including offices and industrial buildings, commercial properties have different challenges and benefits than residential ones. The tenants, in fact, are going to be businesses and rental agreements can involve multi-year leases. This can lead to stable cash flow, but it can also expose the investor to any risks, such as lower lease rates and bankruptcy due to any market fluctuation.
There are many options and possibilities to take into consideration based on your needs (industrial, retail, mixed-use real estates etc.).
The investor should also be aware of the Italian property taxes. Therefore, it is highly recommended to seek advice by experts specialised on the required field who will be able to analyse the investment area and to provide the most suitable solution for your specific matter.
Since the investment procedures require a complete competence in the legal framework, approaching to the investment with the sole assistance of a real estate agent can be risky. Specifically, VGS lawyers will coordinate with the local notary and he will interact with the local buyers/sellers, the real estate agent and the bank for an eventual mortgage, taking also care of the related activities.