Commercial real estate in Italy: what to know before buying
The real estate market has been an attractive investment option for a long time. The country has a high standard of living for its citizens, actively develops a tourist destination and fully encourages investments in the economy. Commercial real estate in Italy is a profitable solution to get high income both for local and foreign investors.
Italian market is interesting not only for individuals, but also for large global companies. An example is the State Oil Fund from Azerbaijan, which has invested in commercial properties in Milan. Russian businessmen also buy real estate in the country, now they own various health centers. tourist complexes and other projects. Recently, a Turkish businessman became the owner of the famous hotel “Aldrovandi”, which is located in Rome, and a Chinese businessman has invested in a hotel complex in Milan.
Italy is a unique place, which attracts not only with its mild climate and beautiful nature, but also with its historical heritage. Each city in the country has its own charm, so that the flow of tourists here virtually does not depend on seasonality.
Before you buy commercial real estate in Italy, you should think through all the details. First of all, you should indicate how much money you are willing to invest, and how much you intend to make profit. All this should be associated with such important factors as the forecast of real estate liquidity, the cost of maintaining the object and the probable fluctuations in the market, which may lead to a decrease in value.
There are two ways to invest in this segment:
- to acquire an object that is already on lease;
- to buy a property, and after the transaction to rent it out.
The first option should analyze how beneficial it will be. The location of the object plays a big role. Ideal if the premises are located in central areas of the city, where the cost of rent is always higher.
In addition, you should talk to the tenant, learn the scope of his business, how well he pays the agreed amount of rent. If you are satisfied with all the conditions, you can start the procedure for obtaining a loan from a bank.
If you intend to buy an empty commercial property, it is better to prepare in advance and find a potential tenant. Evaluate what kind of businessmen may be interested in the object, and whether they are ready for a long term lease agreement.
The cost of commercial real estate in Italy is growing, but at a slow pace. Much depends on the region of the country. Milan is a tourist developed center, but last year the purchase price decreased by 2.3%, but the rental rates have increased by 0.2%. On average, a square meter of commercial real estate here costs 12 thousand euros, and rent – varies from 800 to 1000 euros per square meter per year.
For a square meter in Rome it is necessary to lay out 4-5 thousand euros, and the rental rate is 480-680 euros per square meter per year.