About buying a 1 euro property in Sicily
It sounds like a dream come true, right – a 1 euro property in Sicily? To actually acquire a stone townhouse in a cozy Sicilian town for just one measly euro. Maybe an opportunity for less wealthy people to have a chance to fulfill their dreams. It could also be seen as an opportunity to spend your entire budget, which otherwise would include buying the property in the first place, on renovating the house to get it just like you want it. Beware! All that glimmers is, as it most often is, not gold.
We here at Sicilian Houses worked on the international marketing of one of the previous 1 euro property projects in a small, inland mountain town by the name of Gangi back in 2014. It turned out to be a rather bizarre experience. After the first newspaper interview about the project (The Local, August 6, 2014), we had no way of knowing that our everyday office lives were about to completely change for the next six months. In the first few weeks, we received over 22,000 emails of requests for the 20 ruins that were included in the project. We had to hire more staff and quickly organize new routines to be able to process and answer all of the requests and applications. We organized groups of applicants from all over the world to come and see the various properties in Gangi, and the interest for these ruins seemed to reach astronomical proportions.
Since we still receive many emails with requests for 1 euro properties, I would like to give a little more background to what these projects really are and how they work, as well as answer a few of the most common questions that we get asked about the projects.
Why do the properties cost only 1 euro?
Simply because they are worth exactly €1. The previous owners have donated the properties to the city. Why did the owners donate them? Because they were impossible to sell – there is just no demand at this location, and the properties are in poor condition and expensive to renovate. Nobody wants them.
“I’m handy and can renovate it myself – a 1 euro property a perfect project for me.”
What a lot of people fail to see is how poor of a condition these houses actually are in. We are talking about houses here that are actually condemned. Houses which in most cases need a new roof, new beams, have the foundation and/or the masonry strengthened or redone completely etc. When all this is done, it’s time for all the usual stuff – plumbing, electricity, etc. These are things you are not allowed to do yourself, even if you want and are able to. It’s a question of regulations and insurance. You are allowed to work with the internal surface layers and do interior renovation, but those are small undertakings in the grand scheme of things.
To do a renovation of this kind, you must hire an architect to apply for a building permit (architectural services and building permits are not free), and you must have an Italian registered construction company to do the actual work. Usually, a renovation like this goes for about €800-1,000 per square meter. You have to pledge to begin the restoration within a few months after you have received building permits and finish all of it within three years. If you fail to meet these prerequisites, the municipalities can usually legally buy the property back from you for €1. So make sure to have the money ready, or you could end up in a position which you definitely do not want to be in.
Here you can read more about renovations.
“I could do it as an investment – take over a 1 euro property, renovate, sell and make a profit.”
Dream on. You virtually can’t make any profit in these locations. There is a reason why these towns need this kind of projects. We often receive sale requests from people who bought and renovated houses in small, inland towns of this kind – and we must always give the negative answer: “You will not be able to get your money back.” The market value rarely matches the size of the investment in these towns.
The 1 euro property projects are exclusively located in inland towns, that most often lack infrastructure connecting them to anything desirable. You may think that the project could change that, that it will become a more popular destination with time. Unfortunately the projects usually only include around 20-30 properties, and it’s just not enough to revitalize an entire town. If you want to find out for yourself, I would recommend that you examine what the market value for a renovated property is in one of these towns today, and compare it to the total costs you would have to pay in order to get one of these properties to a similar state as the finished product. Good sources for investigating real estate values in remote towns are www.immobiliare.it and www.subito.it. Do your homework, and make sure that it wouldn’t be cheaper to buy a property in better condition from the regular real estate market.
Are you looking to buy and renovate a property to love and keep for life: Visit the town, get to know it. Make sure the property is right for you. Keep in mind that you are facing to spend a lot of money, so it should feel right. If the feeling is good – go through with it. However, beware that these projects attract a lot of attention, and in order to get one of the €1 houses, you must beat out some competition. It can be a bit of a lottery.
Are you looking for an investment: Find a property located close to the coast – or in an inland town that has good connections to a major city, the sea, and/or an airport, as well as good aesthetic and cultural qualities.
If you intend to renovate, pay attention to LOCATION. The refurbishment costs are more or less the same in an isolated mountain town as in a fancy seaside town, which of course doesn’t matter if you intend to keep and love your home for many years to come. But if you plan to get some return on your investment, you would be wise to do your homework.
€1 is nothing, but it’s the total investment cost that counts. Market value > Investment, that’s the equation you should consider. “If it sounds too good to be true …”