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10 Rules to make your investment safe – your Real Estate Attorney will help!
Whenever you decide to invest in Italy on a property purchase, be aware of the several rules, which might save you from a bad purchase. Our long experience in the real estate sector helped us to find at least 10 of these most important rules to safely purchase your property in Italy:
- Get informed on the market value of a property per “square meter” in the area where you wish to buy. Even a real estate agent knows what value the properties have in a specific area. In this very initial stage you do not need to engage a surveyor, but you just need to make sure that the selling price of the property you have seen on a website is conform to the market value. If for example, a 100 square meters house costs 200,000.00 euros, you will come to the conclusion that this house costs 2,000.00 euros per square meters. Unless you know that the value per square meter is much lower, you are purchasing at the right price. On the contrary, if you know that a similar property in the same area has a value of 1,000.00 euros per square meter, do not even start negotiation as it might be a waste of time.
- Buy at auction but only if you are assisted by a real estate attorney with a long experience in the field of auction purchases. There are, in fact, some hidden risks that only an expert real estate attorney might discover.
- If your idea is investing in the real estate market – which means that you are interested to purchase a property and selling it in a near future – you need to buy a property that is attractive to future potential buyers. However it is strictly recommended to know about tax implication in case you sell the property within the following five years form the purchase. Ask your real estate and tax attorney.
- Negotiation is very important, if you show to be very interested on the property from the very early stage, you risk that the owner (or the real estate agent) understands how desperate you are in your desire to purchase that property. Never show your weaknesses and be quite rational. Even better if you let negotiation being dealt by your real estate attorney who is in the habit to deal with negotiation and those kind of transactions.
- When the property is on the market for a low price, try to understand the reason. Sometimes it might depend on the urgency of the owner to sell it. For example, he has to move to a different Country, or he has inherited the property and wants to sell it immediately as he is not interested in living or investing in this property.
However, some other times it might depend on other most relevant aspects, for example there are illegal works that have been carried out on the property, meaning that the property is not marketable. The consequences might be quite severe as you might purchase at a low price but will incurring in important legal responsibilities.
- Do an accurate due diligence before purchasing a property. If a property is on the market for a really low price, just think that “there must be a reason”. We suggest you to do some investigations, hire a real estate attorney who can make appropriate searches at the cadastral registry.
- If you have decided to invest in Italy with the aim to rent your property to tourists, you need to know in which locations you can make more profits. Look at the areas where there is the highest presence of Hotels/B&Bs/Vacation homes, but do not get the property too close where other competitors are. The fact that your property is located near the center, easily accessible by car, not too difficult to be reached from/by the airport, can be relevant and might make the difference if your intention is to rent your property to tourists.
- Buying a property to be restored could be a good purchase, however, before buying it, you need to have an estimate of the costs you are going to bear for the restructuration works. We suggest you to require a so-called “Computo Metrico” to be carefully drafted by an expert, in terms of not incurring in any unwanted surprises.
- If you are a foreigner, and you do not speak well the language of the Country where you are purchasing a property, you need to get a translator. Nevertheless, the deed of sale is usually drafted with a very technical language that you might not understand even with the help of a translator, reason why many foreigners prefer to be assisted by a real estate attorney during the signature of the final deed.
- Last but not least, if you and the vendor have already decided to sign a preliminary contract, but you have not hired a real estate attorney yet, ask to add a clause in the preliminary where you reserve your right not to purchase in case of a negative feedback of the due diligence. Then, once you hire your attorney, he/she will carry the due diligence for you.