Fixer upper or move in ready - villaedera.net

I often get asked whether I recommend buying a fixer upper in Italy or if it is better to buy a key ready property.

The answer to this question is that there is a lot of money to save (and earn if you flip it) by buying a fixer upper. Rural Italy contains a lot of derelict properties that can be purchased at low prices. Some of these are in good locations and can be a worth a lot of money if you fix them. I would however not recommend that you try this unless you are able to speak Italian and are able to be on site every day. Ideally you should be able to do some of the work yourself. Do not consider a project like this unless you have a basic understanding of construction.

manage your property

Managing abroad

It is very hard to manage a renovation in Italy unless you are able to be on site. It is all to common that foreigners return to their property only to see that the contractor has made none or only a fraction of the promised renovations. It is also common that the contractor has chosen to use other methods than those agreed upon (be it to save money or due to the language barrier). It can be very hard to get the contractor to finish work he has been paid for and I recommend that you never pay a contractor in advance. Always have detailed contracts written about what is to be included in the contract.

There are bound to be more waste if you are not on site. This is partly because there is a higher risk of theft and partly due to the risk that the contractors are likely to be more careless if you are not on site.

All renovations will end up a lot more expensive if you are not there then they would be if you where there. The difference in price can be substantial and be the difference between earning money from the renovation or ending up paying more than you would have paid buying a finished house.

Hiring a manager

managerA possible solution to this problem that I often get pitched is that you can hire a local project manager to oversee the project. This can be better than having an un-managed site but is seldom a good solution. Most project leaders are expensive to hire. This is not unreasonable since it takes time and skill to project manage. Something they need to be compensated for. It is not unusual that adding a project manager will add an extra 10-15% to the project cost. Many project managers will charge you a percentage of the total cost for their service. (often 10%) A manager that gets paid like this have no incentive to keep your cost down. They earn more the more money that is spent and will therefor not try to keep the cost down.

There is also no guarantee that a site managed by a project manager will turn out any different than a site with just the contractor there. The project manager might also neglect your project and prioritize other projects he works on.

I good project manager can be a good send. A bad one might be worse then not having one at all. It is always better if you can be there yourself and supervise things. I never recommend buying a fixer up unless you can be there.

This is true regardless of whether you chose an Italian or a expat project manager. It is easy to think that you will be better of with an expat that speaks your language and it might be easier to trust someone that shares your culture but it is important to remember that there are a lot of dishonest expats out there.

Many expats have less social pressure to behave then they had in their native country and might therefor act in a way that they are unlikely to have acted in back home.

Conclusion

99% of all purchaser are better of buying a finished house. It might be a little more expensive but it will save you a lot of frustration and you know exactly how your house will turn out.