Yahoo Finance '2 feet of pigeon poop': Americans are snapping up homes in Italy selling for as little as $1 — but shell out thousands for renovations. Is buying cheap property overseas really worth it?
After hearing about homes in Italy hitting the auction block with starting bids as little as €1 ($1.05), Meredith Tabbone in 2019 bid €5,555 — roughly $6,000 — for a home she’d never laid eyes on before.
“A lot of people warned me that it could be a scam [and that] I could end up losing a lot of money,” the Chicago-based financial adviser told CNBC's Make It
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But the deal was real, and Tabbone's bid was picked as the winner of a dilapidated home in Sambuca on the island of Sicily. The 44-year-old has spent four years and nearly $450,000 renovating her new vacation home — including purchasing a neighboring property, leveling the flooring and opening up 18 small rooms into larger ones.
Tabbone isn't the only American to have scored a cheap property overseas — as many are contemplating a future outside of the country.
Interest from wannabe homebuyers
A number of towns on the other side of the Atlantic are hoping to revive fading neighborhoods by selling abandoned homes for next to nothing.
In Mussomeli, Sicily, for example, over 100 €1 homes and around 200 “premium" properties, which start at around €5,000 and require fewer repairs, have been sold, according to CNBC's Make It.
Buyers of these are expected to shell out thousands of dollars for repairs, as these homes can come with problems, such as caved-in roofs and crumbling floors. Each town with this type of program has its own unique set of rules and conditions.
Still, for many curious American investors grappling with rising housing prices and high mortgage rates back home, a cheap fixer-upper on another continent might be better than nothing at all.
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Is it worth it?
Tabbone shared that when she first purchased her home, its condition was “dire at best” — with no electricity or running water and “2 feet of pigeon poop on the floor.”
She also decided to purchase the building next door for €22,000 and combined the two properties to create her dream vacation home. This blew up her budget, but Tabbone's property now covers about 2,700 square feet — the original ruined home was 620 square feet — and features a library, dry heat sauna and two massive terraces.
It wasn't an easy transition for Tabbone: “From the moment that I sent in the bid and checked my email every day and found out that I won, all the way through this process, there have been four million moments of frustration, exhaustion, contemplation of how to move forward.”
Still, she doesn’t have any regrets about taking on the makeover and plans to spend four months out of every year in Sambuca.
“I never felt like this wasn’t the right place for me to be, and that this wasn’t the right project for me to work on or community to live in,” she said.
Other opportunities to consider
If a complete home rehab isn’t for you, consider pursuing alternative opportunities to invest in real estate that don’t involve spending thousands of dollars on repairs and renos.
For example, you could start investing in quality real estate investment trusts (REITs) for as little as $10 and receive payouts through quarterly dividend distributions.
Or, you could hedge your portfolio by accessing institutional-quality properties leased by national brands like Whole Foods and Walmart.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
