Italy Buying Guide Monthly Newsletter
January/February 2010

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In This Months Issue You'll Find:

January Message from Gianna

Rusticating in a rustico!

Transferring Money Internationally for Dummies by Charles Purdy

Who is Joe Goodwin and why should you care?

2009 – The Dark Age of Property by Kim Brown

Getting good deals on flights overseas by Carol Dunning – OGC Writer

Do you have the Guide yet?

Ciao for now…

Hello again!

I was all set to complain about the terrible weather in Italy this past month – constant rain, two days of snow, temperatures down to just above zero or just below – until I saw Italian national TV news reports about the weather in the UK! A satellite picture of Great Britain was shown to the Italian public, along with stories of trains not working, schools closed, people trapped in the Channel Tunnel, accidents. So I really can’t complain about the rain we’ve been having, though it has been tough here too.

The two days of snow we had a week before Christmas left me stranded in my house with no water supply and no way of getting out until the snow melted on the third day. On Christmas Eve, after over 400mm of rain had fallen in a week – enough to wash away the snow and more than our annual rainfall some years – my German neighbours’ lane collapsed and slid down the hill until it hit my lane.

This landslide, the size of a Jeep, stranded me in my house for the second time in a fortnight. As it was Christmas, I had to wait until the day after Boxing Day for a man with a digger to come save me. I waited till Christmas was over to write to the Germans and tell them the bad news that they can’t drive up to their house any more, unless they’re on a scooter.

With the new year comes Il Sole 24 Ore’s annual list of best and worst cities in Italy to live in. Actually, it is a list of best and worst ‘provinces’ which, simply put, are the 107 larger cities and their general surrounding area. Provinces are judged according to such criteria as number of crimes per capita, income per capita, number of schools, cultural events, restaurants, hospitals, births, deaths, unemployment rates etc.

This year, Trieste has been declared the best city or provincia to live in, thanks to the fact that it was judged as offering the best quality of life and the best healthcare. The second best city to live in was awarded to Belluno (which has the lowest crime rate), followed by Sondrio. All northern cities. The worst city to live in, according to Il Sole 24 Ore is Agrigento, in Sicily, and the second worst city was judged as Naples. All the worst cities are in the south. Florence made it to 14th place, Siena is 9th and Lucca is 37th. Rome has improved four places since last year and was placed 24th.

As usual, the list is food for thought, but I would offer this caveat: the best place to live in as a resident is not always the best place to have a holiday home. Sondrio may have the third lowest crime rate in Italy and be the 4th most employed and entrepreneurial city, but I wouldn’t dream of having a holiday home there. Agrigento may have the second worst services and health care in the nation, but it is a beautiful medieval city, with a fantastic climate, beaches and the Valle dei Templi, which as well as being an impressive archaeological site, also hosts spectacular concerts in the summer.

Venice was placed way down the list at 43rd place, but who wouldn’t jump at the chance of living in gorgeous, glorious Venice? If you’d like to read in detail how each province was judged in each category (the statistics are quite precise) you can click on the name of the city that you’re interested in on this webpage:
http://www.ilsole24ore.com/speciali/qvita_2009/qvita_2009_settori_classifica_finale.shtml

Enjoy this month’s newsletter – this month’s feature tackles the thorny subject of renovating rusticos, a truly inexhaustible subject! I hope the information provided will be useful to you. There is also a bit about the ins and outs of transferring money abroad made easy and I introduce you to Joe of the OGC Resource Centre plus I and chat about booking your trips through Opodo before signing off for another month.

Best wishes and a happy month ahead,

Gianna

Gianna Williams
Italy Buying Guide
The Overseas Guides Company
Italy@OverseasGuidesCompany.com
Phone 0207 898 0549

Rusticating in a rustico!

During this year of crisis, the only properties that seem to generate interest at the moment are very cheap, very rundown rusticos. It’s not a bad idea after all: spend a really tiny amount on buying a ruin, and use it as a plot of land to camp on until you have enough money in the future to renovate it. If the rustico is a total ruin – in my own area 8,000 euros will get you what is little more than a pile of stones and some land – you can camp on it until you’re ready to spend money on it. If you invest a little more and get a rustico that is structurally sound, you can at least have a rough-and-ready holiday home, until you are ready to throw money at it and turn it into the luxury pad of your dreams. Your options boil down to the following:

Rustico 1 – Cheap, a couple of perimeter walls, no roof, basically a charming pile of stones.

This option is clearly the cheapest way to purchase a property in Italy, but it does mean that the only way to ever make this liveable will be to go the whole hog in terms of planning permission, geologists’ surveys, architectural plans, before you ever get near to building anything. This could be the longest option in terms of the amount of time it takes to end up with a liveable home, and it could also turn out to be the most expensive in the long run. There is also the danger that having bought the rustico because you don’t have much cash, you may never have enough cash to do anything with it. If you are ever going to make anything out of this property you will need, at some point:

1. A good geometra/architect.
   
   
2. A good construction company – which must be legally registered with the Italian Chamber of Commerce.

Many people buy such a property and then think of bringing over a builder cousin and doing it all themselves but this is simply not an option. Not only is it legally essential that the construction company be registered with the Chamber of Commerce, (the geometra will name this company when applying for planning permission) but you must also keep all receipts because if you are forced to sell at any time within the next five years, you can offset the cost of the renovation against any Capital Gains Tax you could owe. If the property appreciates in value – just planning permission will increase its value – you will want those receipts.

Rustico 2 – Structurally sound but with no facilities.

This option costs more initially, as the value of the property is higher, but it may save you money in the long term and at least you can use it as a holiday home until such a time as you are ready to renovate it to a higher standard.

If you want to put in a simple electricity supply, you need only apply to Enel, the electricity company, and the cost of getting electricity will vary according to how far away the property is from the nearest electricity pole. Give the property a lick of paint, put in an eco-friendly sawdust toilet, put in a wood-burning stove and Bob’s your uncle. You have a charming, useable holiday home for the time being.

The great thing about the sawdust toilet option is that it avoids you having to get planning permission just to put in a sewage system and IMHOFF approved septic tank. Best to wait until you want to take on the whole renovation and make a septic tank part of the planning permission/renovation request. For information on how to construct one, you can visit:
http://www.weblife.org/humanure/chapter8_2.html

It takes some serious thinking to choose which of these options you can afford, because it may well be that the end sum you pay out will be the same, and the only difference is that the worse off the rustico, the more staggered your costs will be.  However it is worth being realistic because plenty of rusticos go on the market in the same state they were bought in years before, because the owner has never either financially or mentally been ready to take on such a big project, and if a rustico is sold in the same state as it was bought in, at least where I live, you will pretty much simply cover your purchase costs, so not such a great investment after all.

If you need any further information on this or you would like to chat about it or indeed if you require the names of reputable property people who can help you in Italy, please just call 0207 898 0549 and the OGC Resource Team will be delighted to help you.  Remember, you are under no obligation to use the people we suggest and it will cost you nothing.

If you are interested in help finding a property … fill out the following property form: http://www.ItalyBuyingGuide.com/property.htm

Transferring Money Internationally for Dummies by Charles Purdy

When I was 27 my mother purchased me ‘Cooking for Dummies,’ and at first I took it as a bit of insult [especially as I wouldn’t say her cooking was “cordon bleu”].  Okay my cooking wasn’t great but I was still alive after ten years away from home. After flipping through the book, I actually learned quite a bit. Without it I would still be wrestling to peel hard boiled eggs – rather than painstakingly picking the peel off, if you run cold water over them for a few minutes (after boiling them), the shells slide right off with almost no effort! 

As for international payments…making money transfers from one bank to another bank overseas isn’t exactly rocket science. There are, however, many ways to do it ineffectively and lose quite a bit of money in the process. The standard manner to send money to or from the UK is to visit a bank, request that a certain amount of sterling or euros are converted and then instruct the bank on where to send them.  During this process there are three main areas where people go wrong. They include: getting poor exchange rates, paying unnecessary fees and finally failing to order currency at a good rate now for purchase in the future. Let’s look at each one of these individually.

Getting Bad Exchange Rates
Similar to buying produce in a tourist location abroad rather than a village shop, buying currency from a bank is more expensive than buying it from a currency specialist. A bad exchange rate is simply paying more for the currency than you can get it elsewhere. You wouldn’t go buy vegetables in one shop if you knew that you could save €5 by getting them elsewhere! The issue with currency is that you won’t simply save €5 – you could save €1,000’s by shopping around. For example, some currency organisations save clients up to 4% over using the bank. This means that an instant saving of €4,000 can be made when moving a large sum of €100,000 by using a specialist rather than a bank.

Paying Unnecessary Fees
Everyone knows that the banks like to charge fees – overseas you might get charged for withdrawing money or writing a cheque.  Many banks even charge when you deposit money. Again, by using a specialist currency organisation, fees can be eliminated or reduced. Specialists know how the systems work and they know the most cost-effective way to move money. Many expats abroad move their pensions from the UK overseas every month or quarterly. Fees in the UK can amount to £25 for each transfer (that’s £300/year in fees alone!) – why pay that fee if you don’t have to?

Order Currency Now for Use Later
There is one product – called a Forward Contract – that can assist people massively.  Imagine receiving your pension or a regular payment overseas every month and then imagine that every month the value of it decreasing due to sterling weakening against the euro. This is precisely what has happened over the past year and it’s totally avoidable. Currency specialists can help their clients to reserve the rate today and purchase it in the future – this means that if you get €1500 from your UK pension in month one, you can continue to get that same amount for the course of the year! Those that didn’t purchase Forward Contracts last year sadly watched their pension values decrease by over 20%.

Transferring money internationally is not a difficult process; however it’s easy to get lost and led astray by figures and doing things the ‘traditional’ way. There are choices available and substantial amounts of money can be saved by enquiring about alternatives to the bank. Currency specialists are regulated by and must be registered with Customs & Excise. Due to the fact that specialists buy large amounts of currency each day from their bank, the bank passes significant savings on to them that they fail to pass on to their own clients. By using a specialist you’re still effectively using the regulated banking system but getting a much better service and, often, a substantial saving.

Why not claim your FREE report from www.RegularPaymentReport.com on how to save money on payments to and from the UK?

Dear All,

Thank you for your speedy transfer to my bank account abroad, it was done the day after I sent funds to you.

I must say you provide an excellent service and would recommend it to my friends. Not only did you inform me by e-mail about the state of the currency market on a weekly basis, your regular phone update proved very useful. It’s not often that one comes across such an efficient company that does exactly what it promises and on time too. I will definitely use you again for future foreign currency transactions,

Sincerely

Ralph Long   15/01/10

To get an update on the Euro exchange rate, request a quote at Smart:
www.SmartCurrencyExchange.com/quote.aspx

Who is Joe Goodwin and why should you care?

Joe is one of the friendliest people in the Overseas Guides Company office, with a thirst for knowledge and an enthusiasm for his job that is utterly infectious.

Joe has a passion for music and started playing drums in various bands at High School, hoping to become a drummer in a professional rock band, earn mega bucks and have crowds of young ladies screaming his name!  It took him until the final year of university to realise that this was not going to pay the bills, so he moved closer to his next goal:  that of owning property around the world, including north Finland (Luosto perhaps?), Northern France, Southern Spain, Nuremberg Germany…

And how better to do this than to live vicariously and help Overseas Guides readers to achieve their property goals?  Arming himself with a BA Hons. in Business Management and Entrepreneurship acquired at Staffordshire University – “a great Uni but one that lacked a buzzing nightlife scene” to quote Joe, off he set to big, bad London and the bright lights to talk to people about their property hopes and dreams.

“Working in a sector that you are passionate about really helps when working late and going the extra mile to find solutions to our readers’ problems” grins Joe and adds:” Of course it will all help for when my dream of owning property abroad myself becomes reality!”

Joe loves building relationships for potential property buyers throughout the buying journey and is always enthusiastic about receiving updates:  “It’s essential to keep up-to-date and to expand our knowledge of the most recent developments and to learn of others experiences - that’s the way I can keep on helping buyers.”

So...why don’t you give Joe a ring and update him on how YOU are doing?  He will drum up all the help and support you need to make your property dreams come true this year!

To speak to a member of the OGC team, please ring Mon-Fri, 9am to 6pm on 0207 898 0549.  The OGC Resource Centre are available to you – free of charge – to offer recommendations, assistance and at the very least help to point readers in the right direction.

2009 – The Dark Age of Property by Kim Brown

Kim Brown, OGC Director, has a column in the UK publication Overseas Living and I thought I would include an article she wrote for their special supplement.

Last year will go down in history as being a dark and bleak year for the overseas property industry.  The ninth year of this new millennium started with a weak pound, greatly reduced lending facilities and a world wide panic regarding the future collapse of world economies.  In January, I vividly remember the discussion my business partner and I had – all our plans for expansion and growth were thrown out as we agreed our only plan of action was to avoid redundancies and survive the year.

The early months of 2009 brought unfortunate stories about British overseas property buyers having to find an extra £20,000 to £50,000 to pay for their dream property.  Many buyers started their dream purchase in 2007/2008 with a favourable exchange rate.  Sterling was over 1.25 to the euro and over 1.90 to the US Dollar but by January 2009 they decreased by 16% and 22%   respectively.  This meant that those that did not secure or fix a rate of exchange spent month after month watching the cost of their property increase in cost.

Emails and phone calls flowed into The Overseas Guides Company pleading for help.  Many buyers couldn’t raise the necessary funds and not only lost their dream property but also their deposit money too.  The sad aspect of the whole situation is that property buyers could have fixed a rate of exchange in 2008 even if they didn’t need to buy or use the money until 2009.  Hindsight can be a depressing thing.

Aside from the weak pound, the banking world was thrown into total chaos and loaning facilities were drastically altered or removed altogether.  For example, many buyers in Cyprus purchased a property assuming they’d get a loan for 80 – 90% of the value of the property, yet the loan to values changed to 60/40 (60% loan to 40% cash).  Imagine dealing with an exchange rate that has increased the value of the property by 20% and then having to find an extra 20 to 30% to meet the requirements of the mortgage?  Could things get any worse?

To compound problems even further, estate agents and developers started to go under talking client deposits and their dreams with them.  Many overseas property ‘professionals’ failed to carry insurance with the result that some property buyers found themselves left high and dry.  Some were left with debt, others with a part-built property and some discovered that ownership of their new home had been transferred to the banks to pay off the developer’s liability. 

Some Brits found themselves in the unfortunate position of being between house sales – they couldn’t sell their UK property and couldn’t meet their obligation of paying for the overseas property.  Those that made the sale of their UK property a condition of the purchase agreement were okay but those who didn’t were forced to completely on the sale.

Yes – 2009 will be remembered as the dark age of property.  The good news, however, is that positive signs have been report and analysts remark that the worst seems to be over.  

If you haven’t purchased overseas yet, you’re in a very fortunate position to learn from history and safeguard yourself.  What should we take from 2009?  Once you buy a property overseas, make sure to secure an exchange rate immediately so that the value of the property does not increase in value (Check out: Smart Currency Exchange Ltd the second you decide to buy overseas).  Regarding mortgages – get the facts.  Know that an offer in principle can and will change.  Find a way to secure the amount needed so that changes in loan to values will not affect you.  When selecting a developer or agent, research what happens if they go bust.  Will you get all your money back?  Finally, if you need to sell a property in the UK to buy one overseas, make the overseas contract conditional on the sale of your UK property to safeguard yourself.

If you want to read the article’s Kim writes for Overseas Living then go to:
http://www.overseasliving.co.uk/news/expert-opinion/

Getting good deals on flights overseas by Carol Dunning – OGC Writer

I have just returned from New York.  When I decided in June of last year to spend Christmas in the States I must confess I was in a bit of a quandary:  Did I book early in the year in the hope of getting a secure reservation over this busy season or did I wait until the last moment, hope to get a seriously rebated seat and risk not getting a booking at all? But then…what if, in these uncertain times, my airline of choice had strikes or, even worse, went under in the intervening months?

Well, the holiday was too important to take a chance on: did I really want to spend Christmas alone in London? So I turned to my old and faithful friend, Opodo.  Ever wondered what the name means, by the way?  Well, its based on "OPportunity tO DO” – I’m a veritable mine of information aren’t I!

Let’s face it, there are endless sites on the Internet where you can book all your travel arrangements, but I prefer to go with tried and tested companies – ones that I have used often before and been happy with – so I went ahead and booked. I did take the precaution of getting a few comparison airfares in advance, but none beat Opodo. 

All went well – I was surprised and delighted to get a reminder text from them the day before I left with date, time AND weather update for the following day – that’s what I call really good service. Fortunately I didn’t have to use the insurance policy I purchased through them but I did phone in with a few queries about it before my departure. Calls were taken personally – none of those endless, aggravating telephonic messages – and emails were promptly responded to and, all in all, I was a very happy travel bunny.

Why don’t you give them a try on:

Italy Property Buying Guide

If you haven't already purchased our excellent FULL Guide...why not get a copy today?

The completely educational guide covers the start to finish process of buying a property in Italy. Every step is outlined starting with the initial idea to buy in Italy all the way through to areas, how to buy land, investment options and many top tips. This guide is for anyone thinking about or currently in the process of buying property or land in Italy.

To get your copy go to: http://www.ItalyBuyingGuide.com/guide.htm

Ciao for now…

Here’s hoping the weather is clearing for you and that you are not too chilly where you are.  Do keep in touch – we love hearing about your Italian plans.

Gianna

Gianna Williams
Italy Buying Guide
The Overseas Guides Company
Italy@OverseasGuidesCompany.com
Phone 0207 898 0549