Consultancy cases

How we reason, case by case.

Thirteen situations where the right choice was not the most obvious one: choosing the moment, renovating or not, selling or letting for income, weighing an offer.

First group

From our practice: six less obvious choices.

The moment to sell, splitting a flat, an inheritance made simpler, building works, a renovation to weigh up, two offers to compare: each time the answer emerged from the figures and from the owner’s goals.

Selling before the market changed

The owner was thinking of waiting, convinced that values in the area could keep rising.

Looking at the wider picture, however, one thing stood out: construction of a new residential complex was about to begin, more modern and well placed to attract the same buyers.

Our advice was therefore to bring the sale forward, so as not to end up competing with new homes just when the flat was on the market.

Once the new development started, supply in the area did increase. In this case, choosing the right moment mattered as much as setting the price.

One large flat, two homes better suited to demand

The owner had a large flat in an area where, at that time, demand was mostly for smaller homes.

Before putting it on the market, we looked at an alternative to selling it as it was: splitting it in two.

Turning it into two smaller units made it possible to reach a much wider pool of buyers and, overall, to get a better value from the property.

The most profitable solution is not always to sell what you own exactly as it is.

From an inherited flat to an investment that is easier to manage

A client had inherited a flat and was thinking of renovating it to let it out.

The flat, however, needed a significant investment, as well as time, managing the works and then the letting itself.

We compared this with an alternative: selling the flat as it was and using the capital to buy a smaller flat, already renovated and close to a university.

A solution more in line with the original goal, earning an income, but with fewer complications and an investment that is easier to manage.

Sell before the building works, or wait?

The residents’ meeting had approved major extraordinary maintenance works on the building.

The question was not only what the flat might be worth, but when it would be best to put it on the market.

So we looked at the size of the costs, the expected length of the works and the possible increase in value they would bring.

In situations like this there can be two strategies that are both sound: selling before the works start, avoiding costs and disruption, or waiting until they are finished if they can make the building noticeably more attractive.

The choice depends on the figures, the timing and the owner’s goals.

Renovating before selling does not always pay

The owner was considering a renovation of about 150,000 euros before putting the flat on the market.

Before going ahead, we compared the cost of the works with the higher price that could realistically be obtained afterwards.

The point is not how much more attractive a renovated home may look, but how much the market is really willing to pay for that investment.

When the expected increase in value does not justify the cost, time and risk of the works, it can be better to sell the flat as it is and leave buyers free to make it their own.

The highest offer is not always the best

There were two offers on the table: 1,250,000 euros subject to obtaining a mortgage, and 1,220,000 euros with no conditions attached.

Comparing the figures alone would have pointed to an apparently obvious choice.

An offer, however, must also be judged by how likely the deal is to actually reach completion.

The buyer’s solidity, conditions, available funds, timing and guarantees can be worth more than the nominal difference between two offers.

That is why we help owners weigh not only how much is offered, but the overall quality of the offer.

Second group

Choosing the best moment to sell.

A tax that will no longer be due in a few months, documents to put in order, a family’s timing: choosing the moment well, and using the time to prepare the sale, can improve the result.

Eight months that were worth € 31,000

Giulia and Marco bought a three-room flat in the south of Milan four years and four months ago, as an investment: they have never lived in it. The tenant has left and they would like to sell straight away.

The question: does it pay to put it on the market now?

What we advised: to wait. Selling within five years of purchase, the capital gain (sale price minus purchase price and purchase costs) would be taxed. We used the months of waiting to put the documents in order and prepare the sale, and set the date of the rogito (the deed of sale signed before the notary) after the five years had passed.

How it ended: sold for € 1,100,000, with the deed of sale signed the month after the five years. About € 31,000 more than selling straight away, net of the costs of waiting.

Purchase: € 900,000
Documented purchase costs: € 58,000
Value today: € 1,100,000
Tax on the capital gain, selling straight away: about € 36,900
Costs of eight months of waiting: about € 6,000

First the documents, then the sign

Mrs Neri has inherited a four-room flat in the north-east of the city. She wants to sell it quickly: she does not live in Milan and does not want any worries.

The question: can the listing go online tomorrow?

What we advised: two months of patience. Our checks showed that the cadastral floor plan did not match the actual layout: a wall had been moved and the kitchen was in another room, work done years earlier without a permit application. At the deed of sale the floor plan must be compliant, and a bank may refuse the buyer a mortgage. With a technical expert we filed an application for retrospective approval (sanatoria) and updated the land registry.

How it ended: listing published after two months, sold in seven weeks for € 1,120,000, with no last-minute discounts demanded for “problems with the documents”.

Estimated value: € 1,150,000
Penalty, technical expert and land registry: about € 4,100
Time to put things right: 2 months
Sale price: € 1,120,000

Selling and buying, without moving twice

Luca and Sara live with their two children in a 120 m² four-room flat in the west of the city. They are looking for a larger home, and their first thought is to sell straight away so as to know how much they can spend.

The question: sell first or buy first?

What we advised: not to sell straight away at any price. We did the sums: from the proceeds, after paying off the remaining mortgage, about € 800,000 is left; a € 1,400,000 home needs a mortgage of about € 630,000, with a monthly payment of around € 3,150 over 25 years, 30% of their net income. With a clear budget they looked for the new home, and meanwhile we prepared the sale, asking for the deed of sale to be deferred by six months.

How it ended: preliminary contract for the sale at € 1,050,000 with the deed in July, and the purchase of the new home in the same month. A single move once school was over, no temporary rental.

Sale: € 1,050,000
Remaining mortgage: € 250,000
New home: € 1,400,000
New mortgage, 25 years at 3.5%: € 630,000, monthly payment about € 3,150
Temporary rental avoided: about € 18,000

Third group

When it pays to renovate before selling or letting.

Work pays only if it adds more to the price or the rent than it costs, time and risks included. Often the answer is targeted work, not a full renovation.

Targeted work, not a full renovation

Paolo wants to sell his mother’s 140 m² four-room flat in the east of the city: built in the 1960s, everything original, period bathrooms, wiring that needs replacing.

The question: sell as it is or renovate first?

What we advised: we compared three paths. As it is, about € 1,020,000. With a full renovation, about € 1,300,000, but € 200,000 of work, five months and the risk of surprises. With targeted work, new bathrooms, wiring brought up to standard and repainted walls, about € 1,180,000 with € 85,000 of work and two months. The margin of the last two was similar; the risk was not. We advised the targeted work.

How it ended: work finished in nine weeks, sold for € 1,175,000 in six weeks.

As it is: about € 1,020,000
Full renovation: € 200,000 of work, value about € 1,300,000
Targeted work: € 85,000 of work, value about € 1,180,000
Sale price: € 1,175,000

The studio flat empty for a year

Anna has a 35 m² studio flat in a university area, empty for a year. A building firm has proposed a full renovation costing € 30,000 so that she can let it on better terms.

The question: does the renovation pay for itself?

What we advised: no, not that one. As it is, the studio lets for about € 750 a month; renovated, for about € 1,000. The extra € 250, after the 21% cedolare secca (the flat-rate tax on rental income), comes to about € 2,400 a year: repaying € 30,000 would take almost thirteen years. With € 9,000, new furniture, a refitted kitchen and repainted walls, the rent rises to about € 950: the outlay pays for itself in under five years.

How it ended: work done in three weeks, let at € 950 a month with a proper registered contract, shortly after the work was finished.

Rent as it is: about € 750 a month
Full renovation: € 30,000, pays for itself in almost 13 years
Light refurbishment: € 9,000, pays for itself in under 5 years
Rent achieved: € 950 a month

Fourth group

Selling or letting for income: comparing the opportunities.

If the capital is not needed straight away, or if the home will be useful again in a few years, letting it out can be worth more than a sale. The contract is chosen with timing in mind: a long lease can weigh on a future sale.

Three years abroad, and then the return

Roberto is moving abroad for work for three years. Three years ago he bought a 130 m² four-room flat in the south-west of the city as his first home. He is thinking of selling it.

The question: sell or let?

What we advised: to let. Selling within five years without buying another first home, he would have lost the prima casa (first home) tax relief: about € 33,000 between the difference in tax and the penalty. And in three years he wants to come back to Milan. We compared an open-market contract of four years plus four with a canone concordato (agreed-rent) contract of three years plus two: the open-market one yields about € 28,100 net a year, the agreed-rent one about € 27,700, thanks to the 10% cedolare secca and the reduction in the IMU (municipal property tax). Almost the same, but the agreed-rent contract ends when he returns.

How it ended: let with a three-year agreed-rent contract. The home will be free when he comes back.

Value: about € 1,100,000
Cost of selling within the five years: about € 33,000
Open market, € 3,700 a month: about € 28,100 net a year
Agreed rent, € 3,100 a month: about € 27,700 net a year

A brother, a sister and a home that may be worth more

Chiara and Davide have inherited a 120 m² three-room flat in the north of the city. Neither wants to live there, and neither needs the proceeds in the short term. Four hundred metres away a new underground station is under construction, due to open in a couple of years.

The question: sell now and divide the proceeds?

What we advised: to let and decide later. Today the home is worth about € 1,050,000. Let at € 3,300 a month with the cedolare secca, after the IMU and expenses, it yields about € 25,000 net a year. We do not promise that the price will rise when the station opens, but by waiting they lose nothing and keep the choice open. We also explained the other side: a let property usually sells for less than a vacant one, so the decision should be taken when the contract expires.

How it ended: let in three weeks with a contract of four years plus four. At the first expiry we will redo the sums with the prices of the day.

Value today: about € 1,050,000
Rent: € 3,300 a month
Net, after cedolare secca, IMU and expenses: about € 25,000 a year, to be divided in two
Next decision: when the first four years expire

Your situation

Your case is different. Let’s talk about it.

These cases are meant to show how we reason, not to give you a ready-made answer. Tax rules change and every case has its details: we work out the figures for your situation together, and when needed with the notary or the accountant.

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