Rent to Buy Italian Real Estate

Rent to Buy is an often-misunderstood real estate term, because it means different things in different places to different people. This is apparent in Italy, where waves of non-Italian buyers have entered the real estate mar et. The ey to preempting the confusion is to remember that the term rent to buy !or rent to own" simply signifies a form of real estate possession, one that re#uires a contract between a buyer and a seller. This form of possession involves both tenancy and ownership and it has advantages and disadvantages for both buyer and seller. $oreign real estate ownership is nothing new in Italy, nor is the concept of rent to buy but these are trends that have been on the rise. Typically, the buyer and the seller agree to a purchase price which is then loc ed-in for the term of the tenancy, usually three years, during which time the new buyers ma e regular payments. These rental payments include the rental price and an e%tra fee in e%change for an e%clusive right to buy the house at the end of the lease period. This latter portion on the amount you pay monthly will be deducted on the whole property price you have previously arranged with the seller !sometimes the amount you pay monthly will be entirely deducted on the whole price, but in these cases the property price initially arranged is higher". &oreover the initial down payment is structured to include a non-refundable deposit, generally about '()*+ of the agreed-upon sale price.This provides security for the seller while buyers benefit by being able to ta e immediate possession of a property. An example ,greed price !loc ed-in for - years". 200,000 Initial down payment !)*+ of the agreed price". 20,000 &onthly payment. 600 (300 rental price / 300 deducted on the whole property price" ,mount after - years. 30,800 (20,000 down payment / 10,800 saved in years" Balance. 169,200 !mortgage with a ban you choose" The following are some general rent to buy pros and cons, for both buyers and sellers. Individual situations are uni#ue and will re#uire local professional and legal services0 the Italian system is designed to protect property values, but the bureaucracy is convoluted and it can move very slowly. 1verybody wants to avoid costly and timeconsuming false-starts. uyer Ad!anta"es 2eople can immediately live in their dream home with the possibility to have a trial period during which you could decide to sell the property to a third person. 2ostponement of all costs and ta%es related to the mortgage 3ith an affordable monthly payment you can save a good amount that at the end will be deducted on the whole property price0 2otential buyers can utili4e the tenancy period to help establish a good credit history, ma ing themselves better candidates for future conventional financing options ,s long as there are outs from the contract people can try out a property before they are ultimately committed to buying it.

uyer #$sad!anta"es ,t the end of the buy$n" process usually you spends a higher amount than a traditional buying formula0 The agreement is #uite comple%0 In case of ban ruptcy of the seller, you may run up against many problems and you may lose your initial down-payment 5bligation to purchase the property even if you have changed your mind, in any case one has to chec carefully the agreement. %eller Ad!anta"es The seller immediately receive the down payment plus the monthly payments 6aving a tenant is preferable to a vacant property, for security and maintenance reasons. The property generates monthly income for the duration of the sales process. %eller #$sad!anta"es In case of buyer default, the agreement can be contested and he ta es a long time to regain possession of his property0 The seller do not receive the whole purchase price immediately, as the property generates monthly income, so if you have to ma e an important financial transaction you cannot relay on the whole purchase price of the property. , seller may be willing to wait for payment with a rent to buy agreement, but government agencies will want immediate reconciliation of all ta%es and fees, as though the purchase agreement had been completed. Rent to buy programs are not the real estate norm, but they can provide opportunities in unconventional situations.

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