Are Italy's $1 Homes A Smart Investment?

Believe it or not, you can fly to Italy right now, tour a home, and buy it for 1 euro or $1.12.

About a month ago, I was browsing the internet for homes in my area that are on the market. I spent time weeding through homes that were in our budget but didn’t have the "wow-factor" and homes that had the "wow-factor" but were out of budget.

For most home-buyers, the goal is to find a home that’s below what you are willing to pay, that has everything, or mostly everything that you want — a big backyard, 2-car garage, lots of cabinet space, etc.

Finding your dream home can be the ultimate challenge.

As what seemed like hours passed that I was jumping between websites like Trulia, Zillow, and MLS, I stumbled across a concept that seemed way too good to be true.

There are cities in Italy that are selling homes for less than $2.

My interest was immediately sparked, attention grabbed, and suspicion turned up. Could this even be possible, and if so, is there a catch?

The first answer is yes, it is possible. There are some people who have actually done it. The second answer is also yes, there’s always fine print to be read.

So, I decided to dive into a journey of exploration on these unbelievable $1 homes.

A creative effort to restore forgotten towns.

In 2019, people across Sicily began campaigning to bring life back to towns that had been abandoned long ago.

In 1968, locals left places like Mussomeli after a huge earthquake hit Sicily. As time went on, younger generations left for bigger cities that could provide better employment opportunities.

The uptick in departures was that businesses and homes were left by the wayside to weather the test of both time and climate.

An unfortunate fate.

The idea behind offering said houses for such a low-rate is that people from all around the world will be enticed, buy the homes, and bring life and diversity to the small towns.

On paper, it sounds like the ‘American dream’ — but is it?

There’s more to the price than what meets the eye.

It’s true — you can buy a house in Italy with the change hiding underneath your couch cushions.

However, eventually, you’ll need to cut a check for a little more than that.

An estimate of the main costs is as follows —

After you’ve forked over your dollar, you will then need to pay $400 in taxes. Plus, a deposit of $5,600. The deposit ensures that you will spend time restoring the property that you purchase instead of neglecting it further.

But it doesn’t stop there.

Sure, these homes have a European charm about them — beautiful brickwork, and balconies that can look over breathtaking views of the countryside. But, in totality, they are in awful condition.

Some of the homes are in such poor condition that you can spend upwards of $60,000 on renovations to get it up to city code.

Then consider, unless you are planning on uprooting your life on a whim and moving to Italy full-time right away, you can expect to spend around $10,000 on flights for however many years.

So, you aren’t scoring a vacation home for the equivalency of a pack of gum. You can count on spending around $76,000.

The requirements.

Surprisingly, you don’t just purchase one of these homes and have the ability to do with it what you please. The timeline of the process doesn’t move as you see fit.

There are contractual guidelines that need to be followed.

Paperwork.

Within 2-months you have to make sure that you obtain a ‘public deed of purchase’.

To ensure this, you are obligated to pay the expenses associated with drafting the deed. This includes notary, registration, transfer, registration, and so forth.

The acquisition of a deed can take up to 2-weeks after purchasing a home, which is something to keep in mind.

Renovations.

One of the requirements of owning one of these homes is to have a detailed plan in place for restoration within 1-year of purchase. Then, once you can purchase a building permit you have to start construction within 2-months of that.

To take that a step further, you have to have all renovations finished 3 years after acquiring the deed for the home.

These stipulations leave little to no time for procrastination — you have a deadline.

The time frame requirement is an important piece to keep in mind when deciding to take on the project of a $1 home — do you have the time to complete the project in the allotted time window?

At the end of the day, are people being scammed by false advertising?

Yes and no.

The total amount that you would spend on the whole process of owning an Italian $1 home exceeds the initial price point, but to purchase the house itself truly is just that — a dollar!

You aren’t getting a move-in ready vacation-destination home. However, the amount of benefits that you will be able to reap after all is paid and renovated, is tempting. I mean, you will eventually have a quality home that is yours for life.

Think of all the authentic bread, pasta, and wine you could consume!

When I think about all of the homes that I have eyed-up in my area, the multi-family homes, located on busy streets, with $300,000+ price tags just don’t compare to an Italian home in the countryside.

Plus, I would be spending far less than that on the total package of a $1 home. The trickiness would come into play with transferring my life.

After all is said and done, the value in purchasing a $1 home in Italy is subjective to the prospective buyer. The effort that is required in the short-term may not make sense and can cloud the long-term rewards of investing in these properties.

Originally posted on Medium.