I haven’t written for ages as I have had my hands absolutely full running the fabulous Palazzo Cairney, as well as restoring a charming property in Nardò for a family to use as a holiday home. I have decided to bow out of Palazzo Cairney (which I understand will re-open for holidays again in the spring) in order to have more time to concentrate on my own projects.
The property market in Puglia continues to boom, prices are rising and desirable properties, at the right price sell quickly. When I first moved to Nardò, prices were very low and there was a huge choice of properties. There was also only one place to eat at lunchtime and only a couple of good cafes or restaurants. Now prices have risen by around 30%, one is spoilt for choice in terms of places to eat and drink and bargains are harder to find. Prices will almost certainly continue to rise as the town featured in the English, French, German and Italian press this summer, most recently in the Times. Other Salento towns, like Tuglie and Aradeo, are up and coming, as new restaurants and cafes open and what were sleepy backwaters become livelier without losing their original charm. I plan to research other areas this winter.. (watch this space!)
All over the Salento and, to a lesser extent, the rest of Puglia, there is a huge shortage of properties which have already been well restored to contemporary standards; finally the market is ripe for buying ‘fixer uppers’, restoring them and ‘flipping’ them for a profit. The rental market, on the other hand is becoming increasingly competitive. If you want a holiday home which pays for itself, and makes a small profit from being rented out when you are not using it, that is still feasible. I would no longer see it as a business proposition however – the smart money should be on buying, restoring, and possibly renting out while the property is waiting to sell.
The best strategy, from an investment point of view, would be to choose properties which are underpriced for a quick sale or which only need cosmetic changes. At the moment I have two properties in mind.
I have written before about wanting to start up a property investment fund, but I had to give up the idea, partly due to time constraints but mainly because the legislation and red tape involved would have been really expensive and tedious to negotiate. Having done a lot of research I am opting for a fractional ownership model where a limited company is formed to buy each property and shares in the company represent shares in the property. Funds will be held in escrow until the purchase price is reached. Fractions can be sold at any time – through estate agents or property websites ( most of which now have a section for fractional ownership) and the structure works equally well for people wanting a holiday home to use, investors or a combination of both.
The idea (which has nothing to do with time share, in that people actually own the property and can vary their dates) came about because people are unlikely to use a holiday home more than 6-10 weeks a year and when empty it needs maintenance and upkeep which can be tricky to organize long distance. By owning a share of a property, with a local management company in place to look after it, owners can use the house for holidays and/or rent out their weeks if and when they can’t use them, with none of the associated hassle which normally goes with owning a second home. From an investment point of view, shares can be bought before a property is restored and resold at a profit once the property is completed, or at any other stage. Either way shares would be a sound investment as the market here continues to rise.
I am really enthusiastic about the idea – there are so many fabulous properties out there and I am constantly faced with clients who can’t quite afford what they would like. I want to start off small, but I have a selection of grander projects in mind – so if you have Palazzo or Masseria tastes and a one bedroomed apartment budget do get in touch! The trick with sharing a holiday home would be to make sure shareholders had different needs (i.e. not all tied to school holidays) and to limit the number to 6-10 owners giving 5 -10 weeks use a year. Shareholders would have little say in the finishes and décor of each property, but they would all be finished and furnished to a very high standard and there would be detailed mood boards and plans for each property at the pre-development stage.
In the immediate future I have two projects in mind, with a minimum investment of 5000 euros:
The first is time sensitive; three years ago, I paid a 15,000 deposit for an option to buy a two bedroomed flat (80sqm) in the historic centre of Nardo with the price fixed at what was the value then – 67,000. The option runs out at the end of December. It is now worth at least 85,000 as it stands; with 20 -30,000 spent on it would be worth around 120,000, possibly more.
It has been replumbed and rewired, has central heating and aircon and the 80sqm roof terrace has been landscaped. It needs cosmetic work– paintingexterior and interior walls and woodwork, new floors, kitchen and bathroom improved and a further bathroom added (plumbing already there).
I am looking to raise the 63,000 needed to complete the sale (including taxes and notary fees) in the first instance – the money for the work can be raised subsequently if necessary.
The second property I was interested in (there are others, but this one will go quickly) is a medieval house in thehistoric centre of Nardò. It is being sold by a private seller at 50,000 – 15-20,000 below market value. It is structurally sound and full of character but needs quite a lot of work. Reorganized it would provide 2 bedrooms and bathrooms, a living room with fireplace, a kitchen leading out onto a small light well (which if the stairs were moved would have room for a table and chairs, and a roof terrace with a further small room on it. Restored, at a cost of around 60,000 it would be worth maybe 120-130,000. Less dramatic margins than the first property, but it would make a lovely holiday home and would be desirable as a resale.
For anyone wanting to buy their own property, the winter is definitely the best time to look. I had said that I wasn’t going to take on any more private clients and I definitely want to concentrate on my own projects, but I have found a couple of fluent English speaking people who are happy to liaise between architects/engineers/builders and clients and I am happy to still help find and comment on properties, cast an eye over quotes for work and then hand over the project management – keeping a watching brief if required. So if you are rrady to start looking get in touch.
I am also finally starting up a series of online seminars covering the whole process of buying and restoring properties in Puglia. I will run a few free ‘trial’ seminars – email me on email@example.com for dates. I am also running a free online question and answers session on fractional ownership, and my two next projects, on November 1st at 9pm, November 2nd at 5 pm and November 3rd at 5.30 pm – email to reserve a spot. I will also be in London from the 6th-12th of November if anyone wants to meet there for a coffee or drink to discuss either their own property plans, or fractional ownership. Again, email me or WhatsApp on +39 3917982054.