LAKE COMO PROPERTY INVESTMENT 

An investment is an expectation of favorable future returns. Everybody however has there own idea of an investment and what a good return should be. The following should give you some idea of the market and expectations.

Buying a property on Lake Como as an investment can be addressed in three ways;

1. As a return on investment if the property is used for rental return: "INCOME"

2. For a capital return over a period: "CAPITAL GROWTH"

3. Personal enjoyment and the value bestowed upon this by the individual.

Income and Capital growth can be calculated from historical records, but neither can be predicted completely accurately as there are too many factors involved from local weather conditions to international exchange rates and the economy. The returns however are stable and currently a good reserve against capital losses and poor interest rates. In addition Italians keep a substantial amount of their equity in buildings, not based on borrowings, but actual money. They are therefore considerate of this market and do not overuse leverage.

INCOME

Don't forget that people seldom give up their holidays even in a crisis! Lake Como is wonderfully positioned to be one of these places increasingly at the top of peoples visit and re-visit lists:

Lake Como is rapidly becoming the place to go and the reasons are obvious:

• The opportunity to use low cost airlines or budget flight to Bergamo, Linate and Malpensa provides departure points from many European cities. All are one hour drive away and serviced by trains and buses.

• Lake Como is for the discerning visitor, those with more than the average disposable income. It does not cater for cheap and cheerful or the young & noisy. There is no chance of this market developing as the infrastructure and culture will not allow it.

• Northern Italy is at the centre of Europe, easily accessible from Switzerland, Germany, Spain, France etc.

To determine what type of income you could receive from a good purchase we have produced a couple of examples below based on current properties that we handle. These are conservative figures and based on this years current bookings and projections.

A.

- 3 bedroom, well furnished apartment in Central Menaggio can expect a 50% occupancy
- Average Weekly charge EU 1,500 or EU40,000 per year, excluding management and booking fees etc.


B.

- 2 Bedroom, new build with contemporary furnishings, outstanding view and just outside Varenna can expect a 45% occupancy
- Average weekly charge EU 940 or EU22,000 excluding management and booking fees etc.


We have chosen these two properties for several reasons.

Property A.

Central Menaggio means that visitors do not necessarily need a car and they are central to the town.

Menaggio is on the central ferry routes and Varenna is just across the water, which has a train you can walk to from the  ferry. It has more restaurants and places to shop and is the link point over to Lake Lugano

Property B.

This property requires a car as it is 3 minutes up the hill from Varenna town.
-Varenna however has a train station
-Varenna is impossibly quaint and popular with visitors
-Varenna has limited dining experiences in the Winter but plenty in the summer
-The last ferry from Menaggio in the evening is about 8.00pm, winter and 9.30 summer.

As you can see the variations are endless. The second property has outstanding views across and down the lake, the former you will need to go lakeside. From this you can see each visitor has different requirements and this needs addressing in terms of income and personal requirements. We cannot also emphasise the importance of good quality furnishings and attention to detail at all times when holiday letting howeve. As people often come as families or groups, more bedrooms are preferable and mutiple bathrooms are preferred. Saying that, honeymoon couples, travellers on round the world trips or childless couples often don't need this space. Location, facilities, fixtures and furnishings and good marketing make all the difference!

CAPITAL GROWTH

Unlike many countries Italy does not continually produce statistics on house price increases and fluctuations on a
monthly basis by region. Due to the nature of house price purchasing with large deposits and strict mortgage controls,
the boom and bust scenario is not applicable.Lake Como, in addition is not typical of many Italian holiday resorts, has limited land, stunning beauty, is close to centres of commerce, skiing and Switzerland. It also steeped in history and important to wealthy Italians and international business people as a getaway!

As far as we are aware Lake Como is one of the few places in the world to have seen capital growth this year, rising 2.5-3.5% in January alone. The scarcity of properties justifies this increase and is supported by the number of people looking.

We can all be reasonably confident that these properties will continue to grow in value year on year, perhaps only in single figures, (5-10%), but this has been the trend for many years, with Lake Como being more popular than most!

Quiet simply Lake Como is one of the few places that you are likely to see a good return on investment if you buy wisely and manage the investment correctly. In the current climate with stocks falling rapidly and interest rates so low, now may be the best time to make this type of investment. You may even consider this good "Crisis Management or Crisis Resistance".