1 Euro Italian Properties, Great Deal or Renovation Nightmare?
Southern Italy has really started booming lately. Tourists who are tired of the Italian Trifecta (Rome, Florence and Venice) are discovering a whole new Italy, or should I say an old Italy where Italian traditions are still intact and the local mom and pop establishments have not sold out to Starbuck’s and believe it or not, Dominos Pizza.
Southern Italy is a charmer and is luring more and more people looking to retire or to purchase a dream home to run away to when life gets to be too much.
And, if you are savvy, you can make a great purchase, find exactly what you want and not break the bank.
So that brings up the question, What about those 1 Euro houses that are all the rage in Southern Italy and especially Sicily? It sounds like a fabulous deal!
Having purchased several properties in Calabria and having discovered honest real estate agents, architects and builders, I can see at a glance several problem areas with what I have researched on these 1 euro homes.
Why are they selling these homes for so cheap?
To answer that questions I have to delve a bit into Southern Italian history.
Back in the late 1800’s and early 1900’s, much of Southern Italy survived mostly on hunting, agriculture and fishing. Southern Italy is also known as the Mezzogiorno region which means “midday” in Italian. The name evokes images of intense heat and sun in the Summer months creating an environment that can burn plants right out of the ground and starve grazing animals when conditions turn inhospitable.
Life in Southern Italy was hard to say the least. For that reason, when news came that America was the land of opportunity and where survival was not nearly as difficult, a huge number of Southern Italians jumped on boats and headed over. Many simply abandoned their houses. Some had the idea of returning but never did, so once the family died out, the houses were, again abandoned.
Every village in Southern Italy has abandoned properties and the villages who have not reinvented themselves and drawn people to them are, in fact, dying out.
Clever mayors are looking for ways to attract new people to these villages and to create new life and a future for their beloved paese. The Italian government having recently handled a huge Mafia problem in our area is now giving grants to the hill towns of Southern Italy to help them promote themselves and new marketing campaigns are rolling out touting the beauty and products of Calabria.
And one of the methods of stoking interest is to offer these abandoned properties for so cheap that you simply must come over and check them out.
That said, there are some things you need to know about this “deal”.
Houses in Italian Historical Centers are way older than any house in the US and some give new meaning to the term “crumbling ruin”
Many of these villages are medieval and some even pre-medieval. This means that these houses are several hundred years old. Most often abandoned properties have been abandoned since the Italian Diaspora in the late 1800’s to early 1900’s. This means they can have been standing vacant and neglected for over a hundred years. This also means that roofs may have fallen in and once that occurs, water gets into the ancient walls created out of stones, ceramic roof tiles an any flotsam and jetsam that is lying around, and they start to crumble taking the entire structure with them.
And finally this means that although you are purchasing a “house”, you may end up taking it down and completely rebuilding it.
Most of these deals come with conditions
One of the condition is that you have to agree to renovate within a certain period. In addition to that there may be conditions on who you can use in your village as far as work goes. I know that certain villages frown on you bringing workers in from somewhere else to do your work and this can cause friction in a village. You might end up renovating your dream home and living with the fact that you have inadvertently created antagonism with your fellow villagers.
On the other hand, the renovation contracts accompanying these “deals”may be ridiculously expensive for the area or even in general making it a very bad deal indeed.
Sometimes the locals put up the prices for foreigners
Pete and I were discussing where to purchase finishes and supplies for the renovation of our BNB. Our close friend insisted that our builder accompany us to make the purchase because she knew that the vendor might put the prices up when they saw us. Our builder came with us and was able to negotiate a fair price for everything we needed.
Recently Pete and I also received an estimate for the refinishing of some stucco on our rental apartment and it was over 8,000 euros. Obviously that was way too much. We will use someone we trust instead.
Renovation costs can be huge
I recently read interviews with people who had purchased a ruin for a euro and then spent over 250,000 Euros to renovate it.
With housing prices as they are, they could have purchased a completely new or renovated mansion for 250K. I cannot imagine paying that for renovations for a house or apartment of 1,000 or even 2,000 square feet when you can buy one completely done up for less than $100,000. It makes zero sense and if you had to sell for whatever reason you would lose a ton of cash.
Renovation in the Historic Centers is also difficult. Many times there is no road leading to your new house or apartment so the supplies might have to be brought up stairs or ramps in wheelbarrows. Giant scaffolds may be required because many of these villages are in hill towns. All of these things drive up the costs of renovating.
Property purchases in Italy are not legally the same as they are in the states
Recently in our village there was a situation where our builder was frankly, ripped off. I asked him why he didn’t sue and the fact was that despite the gorgeous work he did on the house in question, the real estate market simply did not support a price that would make lawyer fees sensible. Lawyers in Europe are as expensive as they are here. Getting into a legal battle takes forever and will cost you way more than you ever thought.
It is best to avoid resorting to legal remedies in Italy if at all possible. Get everything in writing, ask all the questions you need to ask and don’t be afraid to walk away from a purchase if your gut tells you it’s not right.
So with all that said, does it still make sense to purchase an ancient house in Italy?
The answer is yes but only if you are smart about it,
Every hilltop village in our area has properties available in various stages of construction or deconstruction. The prices in Southern Italy are the lowest I have seen in 10 years. I believe that this is because of the uncertainty in the political and economic situations in the EU and the UK.
Many English and Europeans are hunkering down and sitting tight to see what will happen.
Others are up and selling because they are scared. The prices dropped to almost half of what we saw when we first purchased our house in Santa Domenica Talao.
With this going on, there is a fantastic opportunity to buy your dream home in Italy, especially in the South.
If you are dreaming of a home in Italy here is how I recommend you proceed.
Decide where you want to be
This may be a multi trip project. Go to Italy, find some villages and stay awhile in the ones you find attractive. What are the people like? Each village has a character and it must match yours to some degree if you are to be happy there.
Decide what your ideal scene is with regard to your property
Every property purchase comes with a list of must haves, wants and things you don’t want. Make a list of all of these and assign priorities to each item. Understand that you may completely toss your list if you find a place you fall in love with but at least you will have considered everything.
Get to know your architect and builder if you are planning on renovating
In small villages there is normally one builder and one architect. Be sure you are comfortable with them before doing anything with them. If you aren’t, get something that is already renovated.
If you are planning on renovating, get the prices for EVERYTHING before you make an offer
Sit down and tot up the cost of the house, closing costs, architect costs, and renovation costs down to the last toilet. Get this all in writing and see if the deal makes sense. If not, offer what does make sense. You may do this more than once before you settle on the right house and situation.
If the house needs a new roof, you may want to put on a roof terrace. A roof terrace adds so much to your lifestyle that any place that needs a new roof should be evaluated for a roof terrace, but that is my own personal preference.
Do not over renovate for the area
The property values in any given area are what they are. Putting in $2500,00 in renovations in a house that will maybe sell for $80,000 is fine if you really want it, have the money to support it and don’t plan on recouping all of it if you ever sell.
If you have all of the above covered, go nuts. If not, consider carefully how you plan to renovate.
Understand that you may not be equipped to do the work yourself
Ancient houses are NOT the same as houses here in the US. See our Super Savvy Travelers Youtube video below where I describe them. Any improvements you might make yourself will come with a learning curve. If you are ok with that, proceed.
Budget for more than what you think it will cost
In any renovation, you never know what the final cost will be. Things turn up when moving walls or fixing plumbing, especially in an ancient village. Be prepared.
Purchase something that does not require any structural repairs
New walls, new ceilings and floors are expensive. Avoid all that and get something that is in good shape structurally but just needs some cosmetics. Prices are so low in Southern Italy now that you will be amazed at what you can get.
If you are hell bent on a renovation project CONTACT ME!
Pete and I have a ton of experience purchasing and renovating properties in Calabria. We have discovered and vetted reliable estate agents, property managers, builders and architects. In short we have put the infrastructure there for you to enter into a renovation project eyes wide open. We can walk you through the process.
If you are planning to come to Italy to look at property or to just have a great vacation, we can help you put together a fabulous trip. Send us an email at email@example.com