Price outside the US real estate market? Direction Europe

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This article is reproduced with permission from The escape house, a newsletter for secondary owners and those who want to be. Subscribe here. © 2021. All rights reserved.

Do you dream of buying a second home in Europe? You’re not alone. In recent years, a significant number of Americans have crossed the Atlantic in search of the vacation home of their dreams. And with the current state of the US real estate market, the European markets are beckoning more than ever.

According to the recently released Knight Frank Global Residential Cities Index, which covers the first quarter of 2021, house prices fell 4.3% in Venice, 3.8% in Lisbon and 3% in Seville. Last year. In contrast, home prices in virtually all US markets have risen over the past year.

If a villa on the Spanish coast has always seemed like a pipe dream, it doesn’t have to be. We asked American owners of European homes, real estate agents and property managers if investing in a European second home is worth it. Without hesitation, they all agreed that if you want to bask in the Tuscan sun, then do. But, they warned, it’s not worth it if you’re not prepared. We asked them everything you need to consider before owning a second home in Europe.

Refine it by geography

First of all, you need to determine where you want to be. American Emily Towe, who owns an Old World farm in a Portuguese village just outside Lisbon, recommends that you go down the coast ‘and spend at least a month in the area where you plan to settle. This way you can “really absorb and get a really good idea of ​​the country” before you decide to invest.

A good real estate agent makes all the difference

Once sure of the location, Jeff Curtis of the Barcelona and Costa Brava area of ​​Sotheby’s International Realty, says the next step is to find a real estate agent who understands the differences between the local US and European housing markets. Particularly in Barcelona and the Costa Brava, Curtis warns that local agencies do not collaborate with each other.

“If you like four different houses and they are all connected to different agencies, you have to start the process with each different agency.”

There is no multiple listing service, so local agencies will do their best to protect their rights to the sale. For someone familiar with the US real estate market, having someone who knows the local market and can provide advice is crucial.

However, Curtis pointed out two notable trends in the European real estate market that are particularly beneficial to Americans.

“[The market] is very attractive to Americans who have participated in bidding wars and lost contracts, ”he said.

Across the Atlantic, competition and the need for speed do not exist at the same level.

“Properties can be on the market for several months or even a year or more and there is nothing wrong with [the property], it simply has not found its new owner.

Second, Curtis pointed out that real estate is significantly cheaper in Europe than in popular vacation destinations in the United States. for $ 1 to $ 2 million in a “luxury type market.”

Understanding the paperwork

Once you have selected the property you intend to buy, the actual process of buying as a foreigner varies from country to country. In Portugal, Towe and her husband were able to acquire a Golden Visa, available to foreigners in several European countries. This involves obtaining residency through an investment program; the client invests in the house and does not have to live there permanently. If they choose to do so, these programs generally provide participants with the opportunity to qualify for citizenship. In France, Andy Meyers, a New York resident and owner of a hillside vacation retreat in southern France, had different options. His house, rather than being considered residential property, is technically a non-operating company, which exempts it from ordinary residential property tax. Because household expenses exceed income, he doesn’t pay a lot of business tax. It is crucial to research and seek advice on the best option in your country of interest. However, it is important to note that Curtis and Towe cautioned against slow bureaucratic processes.

“Americans think [the European market] is the same as the US market. It’s not, Curtis said. “It won’t move that fast.”

A house manager is a must

Finally, the last step is to find a great local property manager. Meyers insisted that this is one of the most important aspects of owning a home abroad.

“Absolutely, get yourself a local person who will take care of the check-in and run the house,” he said. “No one who has bought a second home for the first time is prepared for the persistence of repairs. “

Meyers, like many American owners of second homes abroad, spends most of the year away from their vacation home. When something is wrong and he’s not there, he can’t fix it, he relies on his head of house, Patrice Bertocco.

Bertocco, who works for Elite Riviera, a French property management company, explained how he manages several dozen homes from Nice to Cannes. He calls himself a “janitor” and makes sure to stay within an hour’s radius so that he can be at any house in time to resolve any issues. He said he checks each house at least once every two weeks to make sure gardeners, pool technicians and housekeepers are all working according to the owner’s wants and needs. He coordinates transportation from the airport and greets guests at their homes and keeps owners and guests up to date with recommendations for restaurants, activities and museums in the area. In worst-case scenarios like theft, Bertocco is on hand to deal with the police. Meyers made it clear that having a house manager you trust is important and said Bertocco was an invaluable resource to him.

“There is no way that I can [own this house] without a [property manager]. ”

And enjoy!

Ultimately, once everything is in order, owning a second home in Europe can be a hugely rewarding decision. The Meyers and the Towe were delighted with their experiences.

“That is offset by the sheer beauty of the place,” said Meyers, when asked how he weighed the distance. “The food is better, the views are beautiful, the hikes, the museums, everyday life is wonderful.”

Towe supported this sentiment.

“I think [living in Europe] is something everyone should be doing in their life if they can. It’s enriching. Life is a lot more fun when you don’t know exactly what’s going on, and there are so many opportunities. “

This article is reproduced with permission from The escape house, a newsletter for secondary owners and those who want to be. Subscribe here. © 2021. All rights reserved.

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