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The One Euro House Edition
On real estate, Italy, and skepticism
Ben here. Everyone’s pandemic wanderlust has been well-documented over the last year. Zillow has become a meme, 36% of home buyers are more likely to buy without a tour, and we’ve all binged travel documentaries content on Netflix.
But of all the real-estate-related rabbit holes I’ve fallen into over the last sixteen months, one rises above the rest: €1 houses. For only a euro and a commitment to invest a minimum amount in the property, you can have your own slice of Italy. Beautiful.
YouTuber David Williams flew to Mussomeli in 2019 to take a look at some of the €1 houses and ended up buying one. On his channel, he does a walk-through of the properties to give you an idea of the range and how the process works. He compares what you get if you just spend a bit more. Along the way you get handy tips on local customs and laws—upgrading roofs, for instance, requires a special license. Over time he’s built up four rental properties.
Others like Patrick Janssen from Belgium bought a €1 property as a holiday house for his kids. Another couple invested €100,000 in theirs to make it into a bed and breakfast. Priced out of his home country's property ladder, Australian Mark Kopun expects to spend €15-20,000 to upgrade his as an investment property. Even HGTV is in on the action, producing an upcoming series with Sopranos star Lorraine Bracco as she does up a €1 house.
Why is this interesting?
The concept has been popular for some time, usually led by a bold Mayor, promoting their hometown. The earliest I could find was 13 years ago, the brainchild of Vittorio Sgarbi, an art critic, tv personality, and then Mayor of Salemi, Italy. He’s a personality with a shady past who was removed from office in 2012 under accusations of mafia infiltration of local government. An enterprising guy, he was vocal on the €1 concept, aimed to attract those with the "sensibility and economic resources to embark on this adventure.” And if we’re honest, a good dose of PR. Before Vittorio, it was all about €10k houses.
How do you even decide to sell a house for a euro? First, you need to reset to European prices. Buying a house sub-€50k is feasible. Cheap? Yes. But not impossible. So the driver of the €1 is it comes down to incentives. For a real estate agent to sell the property, why sell a €5,000 house when you can sell a €50,000 for the same effort and more commission? And for the seller, why pay to promote the listing? Properties like these get stuck in that conundrum, they can’t fetch a high price, and paying property tax on the empty property is no fun. In many cases, the local government has taken the vacant properties as they’re considered abandoned.
That all being said, the €1 is the bait—like cheap fries at a fast-food restaurant. It gets customers in the door, but the goal is bigger. And, as with McDonald’s, many buyers end up spending more than they intended. If it wasn’t for the €1 carrot, they almost certainly never would have visited. (BWAGY)
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Thanks for reading,
Noah (NRB) & Colin (CJN) & Ben (BWAGY)
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