Italy 101: Understanding the Housing Market
The housing market in Italy is very different from other markets and many aspects of it often surprise foreigners relocating here. In order to fully understand how it works, and to avoid any unpleasant surprises, let’s take a look at the most important things to know:
1. Landlord’s Market – Italy, for the most part, is a landlord’s market – therefore landlords are not very willing to negotiate very much when it comes to lowering the rent or adding add-ons to the property like A/C or a new kitchen. This is especially true in the main markets like Milan and Rome where most types of properties are very in demand. Given the fact that quite often, property owners own multiple properties, and given that they don’t have any mortgages to pay, they simply don’t see why they have to negotiate beyond a certain point – after all, getting the rent is not a case of make or break.
2. Properties Not Seen As Investments – Many property owners, unfortunately, do not see their properties, even high-end ones, as investments, therefore they don’t always spend a lot of money in upgrading them or adding new bathrooms or kitchens. In Rome, for example, even in properties of €8.000 per month, it is not uncommon for the apartment to have a bathroom from the 80s! High-end, modern apartments are extremely rare, and when available, command top rents. Should there be an influx of workers from the UK after Brexit, this situation will only be exacerbated.
3. Hard To Find Requests – Certain requests that some people have are very challenging and/or impossible to find and these include; four or more bedroom apartments (many 5 bedroom apartments at some point were sold as two separate apartments), large gardens (especially in the city), private garages, A/C in each room, walk-in showers, and laundry rooms. Occasionally, a property that consists of these aspects may turn up, but in a different area from where the client would like to live, so a certain flexibility is required if these are must-haves.
4. Dynamic Housing Market – The housing market moves very fast, therefore, when one finds a property that one likes, it is highly advisable to make an offer as soon as possible to avoid losing it.
5. Country Homes – Houses that are located in areas outside major cities like Milan, Florence, and Rome, quite often, were constructed well over one hundred years ago, if not longer. They were built by city folk who wanted to escape the heat of the city during the summer months, and were generally left empty for the remainder of the year. Therefore, suitable heating systems, very often, were not installed in these houses. In addition, very often, these areas are prone to intense humidity, which leads to a myriad of other property issues such as running walls, thus making the property unlivable at times. These properties have also been in the same family for generations and instead of being seen as a valuable piece of real estate, are instead, seen only as burdens that need to be passed onto the next generation. As such, these properties are often not in the best shape possible.
6. Pre-Screening – This is almost impossible to carry out, as both realtors and owners are not willing to open up their properties for this purpose, unless they are confident that they can rent the property after the pre-screening.
7. Real Estate Websites – Such websites in Italy are normally updated in a very sporadic and imprecise manner, therefore, links that are found on the internet, more often than not, are out-of-date.
8. Unfurnished Properties – Unfurnished means that the property has nothing in it – not even the light bulbs!
9. Lease Contracts – The average Italian lease contract is either 4 + 4 (four years with the chance to renew for another four) or 3 + 2 (three years with the chance to renew for another two). When possible, a diplomatic clause of three months can be negotiated. The law actually requires a six-month notice period.
10. Payments – Security deposit, first month’s rent, realtor commission, and lease registration costs must be made at the signing of the contract. Most landlords will not allow you to move into their property until they have received the relevant payments. Please note that the realtor’s fee is also paid by the tenant and can be one to two month’s rent or 10 – to 18% of the annual rent.
The housing market in Italy can be quite complicated for foreigners at times, so if you have any questions, please feel free to contact me.
Article by Damien O’Farrell Coaching Services
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