This is a guest article shared with us by Chris Ellis Sobolev.
The world is on fire with excitement about the 1 euro Italian houses. People ask me all the time "why is Italy selling houses for a Euro" or "can foreigners buy a 1 Euro house in Italy". Read on to the answer to both those questions.
I have to say that whoever came up with this idea to repatriate towns and villages in Italy is a flat out genius.
It just goes to show how many people have a secret or not-so-secret dream to purchase a home in Italy and to live among Italians, be part of a beautiful community with all its loves and losses and to enjoy La Bella Vita to the fullest.
Suddenly your dream is within reach and there are many, many reasons to take the plunge right now. But are these 1 euro houses a dream come true or a nightmare about to happen?
Back in the late 1800’s and early 1900’s many Italians left Italy and came to America. They came from all over Italy but especially from the Mezzogiorno region down south where the sun blazes in Summer making it difficult to eke out a living no matter how hard you work.
America proved to be a dream come true for many Calabrians who went with the idea that they might some day return but then never did. As a result, the houses they grew up in ultimately were abandoned as the remaining villagers began to die out and their children left for better opportunities elsewhere.
Many of these properties were in the ancient city centers so it is not at all unusual and mostly the norm to walk through these city centers and see many abandoned buildings that are starting to crumble with age.
And sadly, many of these villages are starting to look a little ghostly. The people who love them desperately want to repatriate them and give them a new life. In the years that my husband and I have had our place in Calabria, there have been many enticements for foreigners to purchase homes and renovate them in the city centers. The mayor of Grisolia, for example, provided a respite from property tax for ten years if you purchased a property in his town.
So when these 1 euro Italian houses started to pop up all over, many towns and villages jumped on the bandwagon.
Foreigners can buy property in Italy.
But, before you take the leap read our article.
Is there some better way to go about it? Let’s take a closer look at these deals.
Most of the houses I have seen selling for 1 euro are in the historic city centers. These have been abandoned for over 100 years and they truly are crumbling. Many need new roofs, new ceilings and even new walls and floors and I am not talking about tile or carpet, I am talking about the actual floor structure as many of them are too dangerous to walk on, you could fall through.
In our village someone bought a ruin and was then surprised that there was no running water. In addition the walls were crumbling and had to be taken down and rebuilt. Had she done her research, or purchased something already done, she could have avoided costly renovations.
Understand that the way of life back when these houses were abandoned did not include many of the things we take for granted today. Also realize that with these honeycomb houses in the historic centers, the rooms can be small and the whole layout can be much like a rabbit warren.
Here is a tip for finding a house that flows: Many of the grand historic houses have been turned into separate apartments. These tend to have wider hallways and bigger rooms which lend themselves more to an American style open plan layout. If that is what you want, look for one of these houses.
Here is another tip when looking for ruins to purchase and renovate: If the roof has fallen in some time back, chances are that the walls are not structurally sound as water gets into them and as they are created from bricks, sand and anything they could find to build walls out of, they crumble. If you purchase a property, make sure the roof has not been off for a long time and that the walls are structurally sound before purchasing.
If walls have to be reconstructed get an estimate before making an offer on your house, then adjust the offer price accordingly based on what the property market will bear for the finished product.
Bear in mind that many of the prices put up by the sellers have zero to do with the market conditions. I recently watched the property market in Calabria and saw apartments that had been on the market for a year and had not sold for 60K euros be adjusted UP to 65K euros!
Who knows what this was based on? In real estate if something sits on the market for months, you reduce the price. I have no idea what these agents and sellers are thinking So do your own research and see what actually sells and for how much before dumping a huge amount of money into a property.
Also make sure that you get a detailed estimate of repairs in writing BEFORE you purchase the home.
Of the deals that I have seen for these houses, most of them come with the condition that you agree to renovate them within a certain time frame. In some cases it is five years. And in many towns and villages, you do not get a choice of who does your work.
From what I have experienced, you do not get multiple bids like we do in America unless you are in a bigger city.
In our village we have one architect and one builder. Happily they are amazingly talented and honest.
We have had some major renovations done and the result is spectacular.
They are also a fraction of what we would spend in America for similar renovations.
So if you must use only one builder and only one architect, you may or may not be getting a bargain or the type of workmanship you want. (Another reason to come to Santa Domenica Talao!)
Now I am not saying they all do but I will say that my great friend in the village insisted her cousin, who is our builder, go with us to negotiate a deal because she just knew the purveyors of building supplies would put the prices up for us. We lucked out and he negotiated a builder’s discount.
Again, these houses have likely been abandoned for 100 years. There could be a lot wrong with them. In addition, the property markets in these towns and villages, many times do not support pumping a ton of money into a house there.
I have heard of some people who have purchased a 1 Euro house and spent 250K to renovate it. If they ever decided to sell it, there is no way they could get their money back as properties there simply do not sell for that. Think about it, if the town has to sell houses for 1 euro, they do not have anything close to a seller’s market going on.
Alternatively, these people could have had their pick of beautifully renovated houses for a lot less and a much better chance of recouping their money if they ever decided to sell.
There was a situation where a builder friend was ripped off for a large sum of money. I asked him why he did not sue and he said that the legal system in Italy is so slow and the bureaucracy so thick that you would spend any award you might get on legal fees and still be in the hole.
So legal remedies are not really viable in the event that you don’t get what you want. The trick is to minimize risk and create something that aligns with the actual property market in the area you wish to purchase.
I think it all depends on the situation however it does entail a lot of risk. In our village, we already have the architect and builder that we have used and whom we love. We really lucked out.
That said, there is a great way to make your Italian property dream come true without a lot of risk and for not very much money.
My recommendation is to come look at houses that are already in pretty good shape. There are so many houses available in these villages in various stages of construction or deconstruction that you can find exactly what you want. In fact the house right next door to me is for sale for 35,000 euros and is large and habitable with views of the sea.
The dollar is stronger than I have ever seen in relation to the euro, making purchases and renovations a whole lot cheaper.
Also the Southern Italian property market is very buyer friendly as the uncertainties of the pandemic and Brexit have caused many European vacationers to sell and hoard their cash. This has glutted the market with beautiful homes.
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