ARCITALIA  INFORMATION ONE: FINDING A PROPERTY           home      property     what we do      contact

These notes are intended to offer general advice to clients of Arcitalia s.a.s and Belpalazzo Immobiliare, and to provide some understanding of the buying process and issues that can arise when properties are renovated.

Before you buy 

Underpinning your choice of property there may be a relatively confused body of needs and ambitions, set against an equally confusing array of different properties and locations.  Thus, when you begin your search you need to understand both your needs and the nature of the properties available.

Property can be classified as ‘finished, needing and new’.  In other words, you can buy (a) a habitable or finished property, (b) property that requires partial or extensive renovation, or (c) land which you intend to develop.  In addition, there are the rare hybrids, such as property that is partly or wholly demolished to make way from a new building. 

What happens after you buy depends on whether you have bought a ‘finished’ property, or opted to renovate or build.  However, the boundaries between the categories ‘finished, needing and new’ are blurred.  There is some overlap between habitable property and property requiring only partial or light renovation in that buyers of ‘finished’ property generally undertake some redecoration, repairs or alterations.  Similarly, the boundaries between property that requires extensive renovation and building from scratch are also blurred as both involve planning permission, contracts with professionals and builders, and the need to budget for building work. 

Nevertheless, you can identify yourself as a buyer of finished or habitable property, a serious renovator, or someone building from scratch. You can then sharpen that identity by determining whether you are primarily interested in a house or an apartment.  Then, finally you can think about where to look, and further refine the details of your search. 

Broadly, you can choose to locate in a town, suburb, village or open countryside. In coastal areas you might see that choice in terms of the coast, peripheral areas close to the coast, or the hinterland. As Belpalazzo and Arcitalia expand beyond the area around Imperia and the Italian Riviera into Piedmont and the Langhe, the choice of location is more complex in that you may choose between areas that offer different landscapes, property types, climatic conditions, and so on. You can choose between landscapes that are coastal, hilly or positively mountainous, or countryside that is pastoral or given over to olives or vines. Or you might see the choice in terms of different amenities, or the various types of property thrown up by different forms of agriculture.  

The fine grain

While you can broadly structure you choice of property around the categories of ‘finished, needing and new’, houses or apartments, and various locations, you can also focus on the details rather than the broad picture.  Factors such as size, the existence of gardens or land, proximity to shops, or public transport, are typical of the options that can influence your choice of property.  Thus, another way of refining your search is to list all the factors that may influence your decision-making.  In addition to economic considerations, some factors that might influence your choice of property are: 

size, extendibility, divisibility  ·  character, style  ·   garden, terrace, land  ·  pool  ·  shops, supporting services ·  transport  ·  orientation, views ·  walking, climbing, skiing  ·  independent, remote , peripheral, central  ·  work · income,  investment · pets                                 

Generally, clients approach us with a rough summary of their needs, an idea of the type of property and areas that might interest them, and an outline budget. As our understanding of the client’s needs develops, they are matched against what we know about both habitable properties and properties requiring renovation.

Property price and other costs

Price is a filter through which dreams must be squeezed.  There is no point in pursuing property that is beyond your budget.  It is also important that you can cover all your costs.  In the order in which they are paid, the main elements of your budget may be:

The price of a property

Legal and purchasing costs
Agency fees

And should you refurbish or build:

Design costs
Building work
Other professional fees
(Registration)  – applicable only to properties requiring re-registration with deeds office*

* The days are numbered for property that is still on the rural register in the local deeds office. All such property must now be re-registered as urban (urbano) rather than rural (rurale), and will, on conversion, be subject to property tax (ICI).  If your chosen property is rurale, then you might allow roughly Euro 2.000 for re-registration.     

Buy finished property, renovate or build

There are economic difference between (a) finished property, and (b) property that needs renovation or building from scratch.  The largest element in the budget for renovated property is not generally the price paid for the property but the cost of building work.  Where houses require complete rebuilding (with the exception of some of the external walling) building costs may be three to four times the price paid for a property. Thus, while properties for renovation are relatively inexpensive, buying costs are balanced against building costs.  Renovated property also differs from finished property in that the initial outlay is smaller and total outlay is spread over time. Moreover, part of the building costs might be paid from future income – and that may be important in a ‘rising market’. 

The choice between buying a finished property and investing in building work can also be influenced by your attitude towards the capital or ‘investment value’ of immediately habitable property as opposed to the value of a property that will result from renovation or building from scratch.  Clearly, the logic of that equation lies partly in the quality of the existing or finish building against the quality gained by renovation or a new building.

End values and renting

Having calculated all your potential costs, you might also want to take account of the fact that your property will have a capital and a rental value.  If prices rise, then you benefit from an increase in capital value.   While that increase is generally realised when you sell, immediate rental income may be drawn from habitable property at any time. The extent of rental income depends on the nature of your property and how you market it.  You may rent to friends or relatives, or rent locally, nationally, or internationally.  You can use the Internet to advertise your property, and/or use Italian or international agencies that may rent your property for a fee or a share of rental income. Should you rent, Belpalazzo will help you organise local management services. If fact, whether you rent or not, should you want, the agency can help you organise local support to handle cleaning, maintenance, the care of gardens, and so on.  You can seek support for any services, as and when you require them, and will be charged only on the basis of the time and expenses involved for the support you need.  Because the system is based on one point of contact (whether you speak English, French, German or Italian) and a network of local people, costs are kept to the minimum in a system that is both flexible and responsive.

Budgeting for apartments

When budgeting for an apartment it may be important to consider possible condominium costs. If you buy an apartment rather than a house, the costs of creating or maintaining all the common elements of the building may be shared between the occupants. The roof, external walls, stairwells, common areas and some other facilities, may be the responsibility of all owners within the building.  Thus, ownership carries both economic benefits and responsibilities.  Apartment buildings may also involved shared running costs with respect to general maintenance, cleaning, gardening and heating where there is a shared heating system.  However, the system through which costs are shared is generally well understood and unlikely to create problems – as one might expect given the extent of apartment or condominium dwelling in Italy.

The same is true for any part of a private house where a neighbour owns space above or below your property. The cost of maintaining or replacing common elements such as a roof covering may be shared.  Otherwise, shared costs may arise only with respect to party walls. Again, the systems through which costs are allotted are well established and understood, and if your property is verticale, or without neighbours above and below, it is likely to be free of any issues regarding shared costs.

Loans

Generally, it is possible to raise an Italian or foreign loan on property that you own, or intend to buy.  The amount you borrow is based on the value of the property, and loans are available for habitable or finished property, renovation projects and new buildings.  Belpalazzo can help you can secure on loan through establish contacts with banks and other lenders.

Areas and price levels

Both property prices and building costs vary broadly between regions, and even within individual areas. For example, around the area of Imperia, prices fall away from the coast.  Vague tide-lines might be drawn to represent the edges of the market area as it moves inland.  Prices in areas around the current tide-line are generally lower, and relatively more variable.  But as the tide-line moves further inland, prices may tend to move upward and there may less variability as sellers develop a common understanding of the market.  It is also important to distinguish between the price of a property and its relative capacity to increase in value. As prices increase, expensive property may yield a quantitatively higher return. But lower-priced property, or property in the hinterland, may yield a relatively higher rate of return.

In terms of economic and other criteria each area is relatively unique. Buyers balance economic considerations against their needs or ambitions. For example, in comparing coastal and hinterland areas a buyer might weight the distance from the coast against dramatic differences in house prices.  Buyers also vary in the relative value their afford to the sea or coast and the landscapes and amenities of inland areas.  In addition, as with Pieve, road developments can improve links to motorways and the coast. It also pays to consider distances and travel times from airports.  For example, although it is inland, the route to Genova from Pieve is via Albenga, so that the airports at Nice and Genova are roughly equidistant, at about 1.45 minutes drive from Pieve.      

The Cost of Building

Building costs in Italy are generally given in terms of rates per square metre (gross) for different forms of development.  For extensive renovation projects where only some of the external walling will be retained you should allow roughly 800-1.100 euro per square metre for a completed project. Note however, that is to create what is in effect a new building in that all floors, roofs internal walling, services and finishes will all be new.  If a renovation does not involve some of those elements then the estimated price can be reduced.  For example, new roofs cost roughly 140 euro per metre, so if you do not need a new roof you costs per metre will fall by that amount.

Building from scratch carries much the same costs as a ‘complete renovation’.  The difference in your overall budget will lie in the costs of land as opposed to the cost of a property requiring renovation. However, a property requiring less extensive or partial renovation may cost less that building from scratch. In comparing finished properties, it is also worth noting that a well build renovation may be on par with a new building in terms of such factors as roof insulation, double glazing, and so on. There will however be architectural differences in the character of new as opposed to renovated properties.

Apartments are generally more expensive to buy than houses for extensive renovation.  That can also reflect their location as most apartments are in town or cities and many houses requiring extensive renovation are in villages.  The difference in buying costs can vary, but a large and attractive apartment requiring relatively extensive renovation might cost in the region of twice or three time more than a rustico requiring extensive renovation.  However, to some extent that price difference is set against relatively building costs, even where an apartment requires extensive renovation.  For apartments you might allow roughly 400-800 euro per square metre for building work. There is a problem, however, in that the extent of renovation works to apartments is more variable, and there is a greater range in terms of the quality and costs of finishes.    

Area and environmental factors

The environmental structure of an area is also relatively unique.  For example, the region behind the Ligurian coast is made up of a system of valleys within which topography, altitude and orientation result in subtly different landscapes and microclimates.  Historically, these factors have determined differences in the nature of agriculture and, for example, the extent to which an area might have been given over to the production of olives, vines, or other produce. It is also important to assess any individual village or location on its own terms, and even to distinguish between a village or locality and an individual house or site – as they may not share the same environmental conditions. Temperature and hours of sunlight have more to do with the topography and orientation than with altitude. Altitude is not essentially positive or negative as it may be outweighed by other factors.  Historically, those planting olives or vines might bypass land at low altitudes, while land perhaps 600 metres above sea level might provide adequate sunlight and shelter.  Moreover, the characteristics of any location vary with the seasons - especially in terms of sunlight, the angle of the sun and subsequent over-shadowing.  Thus, in judging any location it pays to take a diurnal and seasonal view of how sunlight is determined by orientation and the typography of the surrounding landscape. It is also worth noting that environmental factors may carry different weight for different buyers; depending, for example, on whether a buyer is looking for a holiday home, to resettle, or to exercise a passion for gardening.    

Areas and social factors

For an outsider, social factors may be difficult to assess.  For the locals however, every comune, village and house is a unique social situation. There are classical ‘urban-rural’ differences, notably between coastal towns and the villages in the hinterland.  These differences are not necessarily negative or positive, and mid-sized Italian towns tend to retain the character and social structure of a large village. There are also subtle differences between villages. For example, differences between villages close to the coast and those further inland that stem in part from relatively higher ratios of foreign ownership near the coast.  However, there is not that strong sense of ‘virtual-reality’ that is the hallmark of many French and Spanish holiday areas. Villages and areas remain ‘real’, partly because of their physical nature and the continuing strength and character of the Italian presence, and partly because planning restrictions and the nature of redevelopment tend to maintain and even enhance traditional architectural characteristics. There is also a strong sense of community in all areas as evidenced by the nature of daily life, numerous feste, social and cultural events, and a general tendency towards ‘campanilismo’.  Moreover, new foreign neighbours are generally welcomed as additions to the community.  Particularly in villages, where that may translate into an opportunity to join in the thick of village life - to be a living piece of the social jigsaw.

 Summary

Given all the factors that can influence your choice of property, it is fair to assume that your decision-making will not be entirely rational.  However profound your understanding of your choices, you may feel that you must eventually jump one way or another. Ultimately, buyers come to the end of the ‘search period’ when they reach a reasonable level of certainty and security.    

    

Postscript:

In this litigious age, this document comes with all the usual disclaimers.  The information and opinions contained therein are those of the author and not of any other individual of agency.   However, this document is not offered for sale and the author bears no legal responsibility for the contents or any consequences arising thereof.

The purpose of this booklet is to offer some understanding of the issues that commonly arise in buying and developing property in our area.  It will be revised as new or neglected issues come to light.  The author welcomes all suggestions as to how the document might be expanded or improved.