Holiday let in Italy- any advice?

sionie1

sionie1

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I know that a few of you on here have or have had holiday homes / rentals in Europe. I’m considering something small in Italy as a different option to BTL / holiday let here in the UK. I’d be wanting to use it on occasion but out of season in order to maximise the rental. I’m researching in the obvious places but wondered if anyone has practical experience ( agency or self managed) and any advice / pitfalls. As a comparison in parts of Snowdonia a 2 bed cottage should turnover around £22k+ with approx 29weeks being booked in advance, I’ve looked at a couple that have bookings for 49 weeks of the year. Fully managed will take 15%-20% but that includes cleaners and internet. So, any advice welcome.
 
granturismo

granturismo

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it depends what your attitude to the rentals in general is - if you only consider it as investment and run it through SPV (like limited company) where you can deduct running costs and have a good local management company then it may make sense. I wouldn't assume tho that you'll be there every year as soon enough it will get boring going back to the same place.
If you like to keep an eye on things yourself or don't have good manager locally who will not shaft you and will look after it properly then you'll be out there more often then you like to....

I did think about it, talked to couple of likeminded friends and decided to stick to BTL market in UK, as close to home as possible.
 
allandwf

allandwf

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I own a house in Sicily. I don't rent it out though. Don't underestimate Italian bureaucracy, they have made it into an art form. Some bills can be paid online, but others have to be paid in person.
 
sionie1

sionie1

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allandwf said:
I own a house in Sicily. I don't rent it out though. Don't underestimate Italian bureaucracy, they have made it into an art form. Some bills can be paid online, but others have to be paid in person.
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In person? Blimey... Sicily is on my list as my Italian tutor is from there, so I’d get a little help from the locals. I had heard about planning being particularly interesting, with fixed dates for any submissions but those dates aren’t written down anywhere.... I think it was even covered on an episode of Grand designs.
 
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cheshiremaserati

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I considered buying a holiday home a few years back and revisted it a coupme of times. I got my accountant to look at the numbers and on each occasion, the result was the same - keep your money and go for long term rentals as often as you like.
Inheritance Tax rules, taxation on rental income, swindling costs managing an overseas property by an agent, difficulty of liquidating cash, exposure to foreign exchange rate risks and uncertainty (then) around a referendum about Brexit all played a role in his recommendation. So my suggestion is to commission an accountant to appraise such an opportunity and listen carefully to an experts recommendation what to fo with your csdh and your investmeny objectives.
 
sionie1

sionie1

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cheshiremaserati said:
I considered buying a holiday home a few years back and revisted it a coupme of times. I got my accountant to look at the numbers and on each occasion, the result was the same - keep your money and go for long term rentals as often as you like.
Inheritance Tax rules, taxation on rental income, swindling costs managing an overseas property by an agent, difficulty of liquidating cash, exposure to foreign exchange rate risks and uncertainty (then) around a referendum about Brexit all played a role in his recommendation. So my suggestion is to commission an accountant to appraise such an opportunity and listen carefully to an experts recommendation what to fo with your csdh and your investmeny objectives.
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Thanks it’s interesting that once you’d crunched the numbers you got to that end result. My accountant is very good so I’d be comfortable in his advice, however it’s good to get an overview from others who’ve gone before. So far no one is renting one out as a holiday let, which perhaps says a lot.
 
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bigbob

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I guess you have a life with too little stress in it? I have friends with a rural Italian property, they have been trying to sell it for 5+ years but no interest despite it being on a Place in the Sun. Difficult market so once you have it you are in for the long term.

Like all holiday lets they sound great until the heating/electric etc packs in and you can’t find someone to clean it between midday and 2pm on a Saturday.
 
allandwf

allandwf

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sionie1 said:
In person? Blimey... Sicily is on my list as my Italian tutor is from there, so I’d get a little help from the locals. I had heard about planning being particularly interesting, with fixed dates for any submissions but those dates aren’t written down anywhere.... I think it was even covered on an episode of Grand designs.
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We bought it purely because we wanted to. Cost was probably about 1/3 of equivalent UK property, although it needed work, and rewired. Planning or more correctly a lack of is what makes it interesting. I go every couple of months, friends and family are also welcome to use it. It was not bought to return any sort of income, but purely as a bolt hole, as I am fortunate that I can be based anywhere for work. It is in Modica, south east Sicily which offers very laid back old world charm. I suppose a plus is that it offers a cushion on the exchange rate.
As a rental I do not think it would be worth the hassle, and your accountant is correct.
 
sionie1

sionie1

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bigbob said:
I guess you have a life with too little stress in it? I have friends with a rural Italian property, they have been trying to sell it for 5+ years but no interest despite it being on a Place in the Sun. Difficult market so once you have it you are in for the long term.

Like all holiday lets they sound great until the heating/electric etc packs in and you can’t find someone to clean it between midday and 2pm on a Saturday.
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That’s why a fully managed property would be the preferred route. I’ve got rentals here but they’re all newly refurbished and have various policies and cover that the tenants can use to sort an issues. More of a concern would be trying to sell for 5 years..... long term doesn’t worry me, but I’d like to have at least the option of selling it in a reasonable time if I wanted to. 5 years isn’t reasonable.
 
Scaf

Scaf

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My sister bought a dream holiday home / rental in the South of France but it became a real drag for her feeling pressure to holiday there as much as possible.
After 5 years it took 18months to sell for no more than she paid for it. A similar property investment overhere would have added 20-30% in value.
She now has a BTL here in the U.K. and rents holiday homes wherever she fancies.
 
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cheshiremaserati

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bigbob said:
I guess you have a life with too little stress in it? I have friends with a rural Italian property, they have been trying to sell it for 5+ years but no interest despite it being on a Place in the Sun. Difficult market so once you have it you are in for the long term.

Like all holiday lets they sound great until the heating/electric etc packs in and you can’t find someone to clean it between midday and 2pm on a Saturday.
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Spot on! I had a few corporate colleagues who took out a lump sum from their company (early retirement) pension pot to buy that 'dream' property in Spain, the Algarve, France etc.

10 years in, they all got out of it, citing hassle, admin, language barriers, complex legal issues on foreign assets on a first death, death tax on a first (and second) death and no concept of transferability of Nil Rate Band between spouses and tax to be paid in a tight timescale that does not allow it to be paid out of the ssle of the Estate (Spain). And none of them made a jot - losing out on currency exchange rate, management charges, equipment and furniture replacements by renters with little or no regard for someone else's property and of course, UK tax on foreign rental income and market collapse (Spain) etc.

Had they invested that money into a property in the UK it would have appreciated and been less hassle in a country where we onow how things legal financial and service providers, utilities etc. operate.

I now rent for 4 - 8 weeks in Winter in sunny climates when its dull and dreary in the UK. My colleagues renark that I chose wisely as my lump sum stayed with me and buys me many rentals in different locations!

I used both an accountant and solicitor in the Estate Planning implications of buying a foreign (2nd) property with a UK main residence. The advice from both when added together was a powerful cocktail for Estate Planning. Well worth paying for objective independent advice.
 
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lifes2short

lifes2short

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I can definitely say you're gonna get shafted somewhere along the line with a holiday home rental in Italy, unless you have family out there that can look after it
 
daverichardson

daverichardson

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I took redundancy 12 or so years ago and needed to shift the lump sum quick
So I bought a fully managed cottage in Whitby which is available 11 months in a year.
I had never stayed there myself in all that time as I wanted regular income (the capital has not increased dramatically). This year I will be staying at least twice for a weekend.
It is not a gold mine and I would say I average about £400 (after management fees etc) per month over a year. last year was mega due to the weather.
 
Needamaser

Needamaser

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Friend bought a house and some land in South of Italy.
Locals resented fact the house was lying unused when a local family could have used it.
When he wasn't there they broke in and stole whatever they could lift. They burned his lemon trees. They stole his generator and water pump. He hired local mafia to protect it. Mafia then used it for their purposes when he wasn't there.
Buying was a legal nightmare but nothing compared to trying to sell it. Friend died and family almost gave the house away because they couldn't sell it and legal hoops and costs were ridiculous. Authorities seemed to make up the rules as they went along.
 
lifes2short

lifes2short

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Needamaser said:
Friend bought a house and some land in South of Italy.
Locals resented fact the house was lying unused when a local family could have used it.
When he wasn't there they broke in and stole whatever they could lift. They burned his lemon trees. They stole his generator and water pump. He hired local mafia to protect it. Mafia then used it for their purposes when he wasn't there.
Buying was a legal nightmare but nothing compared to trying to sell it. Friend died and family almost gave the house away because they couldn't sell it and legal hoops and costs were ridiculous. Authorities seemed to make up the rules as they went along.
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that sounds about right, south of Italy and sicily bloody nightmare even for expats that still have property there, let alone green would be buyers that have never owned stuff abroad
 
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