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Is free-home offer a good deal?

By Judy Martel · Bankrate.com
Wednesday, July 29, 2015
Posted: 7 am ET

A few weeks ago, I wrote about an offer that might be hard to refuse: A small town in Sicily is offering to give away homes, or sell them for a nominal fee, to buyers willing to fix them up within four years.

Lots of readers were interested in knowing more. I recently contacted longtime expat Kathleen Peddicord, founder of liveandinvestoverseas.com, who has lived outside the U.S. for more than 17 years -- first in Ireland, then Paris and now Panama. Eventually, she plans to retire in Paris.

The Sicilian offer of a free or cheap home may be hard to refuse, but consider the potential drawbacks.

The Sicilian offer of a free or cheap home may be hard to refuse, but consider the potential drawbacks.

Attention-grabbing, but practical?

Peddicord says that although the Sicilian free-home offer grabs attention, potential expats would be wise to shop around and make sure they purchase a home in a location that suits them. "If you're interested in a place to live in Sicily, either in retirement or otherwise, this could be a cool thing," she says. "Otherwise, I think you have better options."

Currently, prices in parts of Italy are low for Americans, thanks to depressed local markets and the strong dollar, Peddicord says. She adds that buyers may be able to buy a home for less than $100,000 that doesn't require renovation if they shop around.

Peddicord points out a few other potential pros and cons of the Sicilian offer that buyers would be well-advised to consider.

Location, location, location

Every real estate professional will tell you location is the most important factor when buying a home, because it's the one thing that can't be altered. Peddicord says the Sicilian town of Gangi, where these houses are located, is in the middle of Sicily, far from the coast.

"There's not much to do in the town or nearby," she says.

If you're interested in a European base where you can hang your hat and travel around Italy and other countries, it might be a good retirement option.

But because of the remote location, don't expect to rent the house to tenants when you're not there, she adds, because you'd be hard-pressed to come up with any takers. Finally, since the area has been economically depressed for many years, it wouldn't be a good real estate investment either, at least for the short term.

Renovation blues

For buyers who are seeking a home for their own personal use, the Sicilian offer could be a good deal, provided they're willing to take on the massive renovation in a country not known for U.S.-style efficiency.

"If you've never been to Sicily before and have no contacts or connections there, how are you going to manage that?" she says. "I've renovated properties in 15 countries. It's not easy, even after you've done it several times," she adds. "Each project comes with its own challenges and headaches and mishaps, and it's very hard to carry out a renovation in another country long-distance, so you'd want to be on site."

The cost of keeping up

Beyond what Peddicord calls the "hassle factor," there are the costs. "Even if you got the house free, you're still on the hook for transfer (moving) costs and then the costs of the renovation," she says.

"Maybe you have a budget for this and have always dreamt of renovating an old house in the Old World," she adds. "In that case, go for it. This could be a great adventure. If, though, you're looking for an investment or for something turnkey or even reasonably easy, this wouldn't be it."

Looking for adventure and travel in retirement? Check out the financial and lifestyle changes these five couples made to realize their dreams.

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