More Real Estate Opportunity in Europe

Europe’s financial crisis is wreaking havoc in domestic markets and making things harder for the people there, but it is also creating tremendous opportunities for investment for foreigners …

Europe’s financial crisis is wreaking havoc in domestic markets and making things harder for the people there, but it is also creating tremendous opportunities for investment for foreigners with more stable currency. More U.S. investors are shopping for their dream homes in Europe, particularly in countries that are facing more dire circumstances and may be contemplating leaving the European Union. Many speculators feel that Greece is on the verge of a collapse that will cause property prices to plunge. Although certainly not facing the same trials as Greece, Spain and Italy are also places to seek bargains. For more on this continue reading the following article from International Living.

Right now, doom and gloom in Europe runs deep. But there is a story not being told…one of opportunity borne of this crisis. A story of places where you could own your own piece of the Old World…for less than half the price of a budget family sedan.

In Greece and beyond—prices are falling like a rock. And for anybody who ever mused about a European retreat, that’s the silver lining.

We’ve turned to Europe now not merely because there are bargains to be had, but because the other untold Europe story is one of an extraordinary quality of life. The story of a slower pace, of good food shared among friends, of living with beauty all around.

The economies in Europe are under tremendous stress, no question. But there remains plenty to admire about the lifestyle there. In stone-walled villages built on hilltops overlooking vineyards…on islands where blue-domed, whitewashed homes mirror the Aegean sun…you can still live very comfortably today, and for much less than you might imagine.

Bargain Real Estate in Greece

Greece faces a great crisis today and its real estate is about to get dirt cheap. The country is in a classic “blood in the streets” situation…one that looks so hopeless that the public believes only a fool would want to buy real estate in the shadow of Athen’s Acropolis or on one of the country’s stunning Aegean islands.

The story to this crisis goes back a few years and it’s worth recapping. Greece (with the help of wizards at Goldman Sachs) cooked their books to meet the criteria for joining the euro. Then they borrowed lots of cheap money for all sorts of boondoggles (like hosting the Olympics) and to deliver on political promises.

For example, hundreds of professions (including being a hairdresser) were listed as so dangerous or stressful that people could retire in their 50s on full benefits.

Greece is the least tax-compliant country I’ve ever come across. I worked in bars on several Greek islands as a student and saw firsthand how the shadow economy dominates. The Greeks make Argentines look compliant. Result: They couldn’t collect taxes (nor did they try very hard) as the government spent more and more.

As I write, the Greeks have formed a government. Conservative New Democracy leader Antonis Samaras has entered a coalition with political opponents who also begrudgingly want to go along with the terms of their bailout. It was the second time in six weeks Greeks went to the polls.

But don’t think this marks an end to their crisis. Far from it. Greece’s future lies either inside or outside the euro. And I expect Greece will ultimately leave the common currency. The country has an impossible mountain to climb. Too much debt. Too much spending. Uncompetitive.

Let’s walk through how a Greek exit of the euro could play out. Banks would close, although this would likely play out over a weekend. Deposits would be converted to a new currency. When the financial system opened the doors and the currency traded, it would likely depreciate significantly right away.

Savings would be eroded…or wiped out. Greece would be frozen out of financial markets and immediately have to balance its books. Tax receipts would collapse even farther as spending was slashed. Banks would burn…literally…as the streets filled with rioters. Capital controls would fail to keep mobile assets in the country.

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Power black outs…food shortages…mass unemployment…poverty…like Argentina just over a decade ago… And the buying opportunity of a decade, if not a lifetime. There’s no liquidity in the Greek real estate market. Prices are falling like a rock.

They will continue to fall as sellers become more desperate. Then, upon leaving the euro, prices will again fall in the chaos. And the new currency will devalue, making your dollars go even farther.

Prices have fallen, but it’s hard to say by how much. But let’s make up a number—say prices have fallen by 50%. In a crack-up scenario they will immediately plunge further. Say, in half again. Then values will be converted to the new currency, which will also plunge in value. So your dollars will likely go five to 10 times as far as they did six years ago.

In time, the crisis will pass and there will be a new normal. Who knows what that will look like? But I’m pretty sure that the Greek Islands will still be among the most special places on earth.

The values of cottages on these Greek islands are heading toward zero. You could pick one up by the end of the summer for less than the price of a budget family sedan. Maybe it will take a bit longer, hard to say for sure. And that’s with or without a euro exit. –Ronan McMahon

Slow-paced Living in Spain

When I was young, Spain was just another exotic, far-away place, full of bullfighters and flamenco dancers. I never thought I’d end up living there, much less in Pamplona, the city where bulls run through the streets.

My first real contact with the country was as an exchange student in Madrid. I loved the experience and, by the time I left, I was irresistibly drawn to everything Spanish.

That’s probably one of the reasons why—three years later—I fell in love with and married a Spaniard. When he was offered a post back in Spain, we jumped at the chance to return there. And since 1992 I have been living my Spanish adventure…first in Málaga, on Andalucía’s Mediterranean coast, and now in the small town of Mutilva, just outside Pamplona, in the northern province of Navarre.

Navarre is one of the wealthier regions of Spain, so it’s more expensive to live here than in some other regions, but it’s still affordable. You’ll find apartments to rent for $450, for instance. Groceries are cheaper than in the U.S., and you can get a good three-course menú del día (menu of the day) for $12.

And the added expense is well worth it. The city and surrounding towns are clean and well-kept, the transportation system is excellent, and public administration is easier to deal with than in other regions of Spain. –Theresa Osinga

A Laid-back Lifestyle in Italy

“Ever since I was young I’ve always loved ancient Italian history and ruins. In fact, I was so drawn to Italian history that I remember seeking out Roman ruins on a trip to England,” says expat Cathy Powell.

It’s only fitting, then, that Cathy eventually moved to Tuscania, a small town with deep Etruscan roots in the Lazio region of Italy. Rich in ancient history, full of medieval architecture, and encircled by thick stone walls, Tuscania seems a throwback to another time. “It’s really unspoilt,” says Cathy. “I think the locals are happy that it doesn’t get overrun with tourists.”

Cathy’s introduction to Tuscania happened by chance. In 1999 she was spending a year in England when she decided to make a short trip to Italy. While on a Tuscan walking tour, she fell in love with Manuel, the British-born, Italian guide leading the group. Six months later, they married.

Starting out, the pair lived in Tuscania, where Manuel had spent most of his childhood. Later they moved to Rome and then headed to Australia for several years. But after their second child was born, they heard Italy calling again.

“My husband reminisced about when he was growing up in Tuscania; he wanted our children to have a similar upbringing—a relaxed one, where they were free to roam.”

But it wasn’t just the idea of a more laid-back existence for their kids that made life in Europe seem so appealing. To Cathy, broadening her family’s horizons and experience by immersing them in Italian culture seemed an irresistible adventure. And so, in 2006, the family moved back to Tuscania.

Today Cathy and her family live in Capodimonte, just nine miles from Tuscania. Their house, which they bought for $272,800 has over 1,800 square feet of living space, one-and-a-quarter acres of land, and views of the blue waters of Lake Bolsena, a vast crater lake formed by a now-extinct volcano.

As she had hoped, the move has been enormously rewarding. She and her children have learned Italian, become integrated into the local community, and made close friends. “It hasn’t always been easy,” she says, “but my family and I have gained so much from this move.”

She also says that, since moving abroad, she’s become less materialistic. The experience of building a new life for herself in a foreign community has made it clear to her that friends, family, and the experiences they’ve shared are more valuable than anything money could buy. –Barbara Diggs

Provence, France: Not Only for the Seriously Wealthy

Provence. Saying its name evokes images of sun-drenched hills, starry nights, and the scent of sea-salted rosemary and thyme. Birds sing in olive groves, bees drone in vineyards, ?owers spill from terracotta pots. In villages with crinkly-tiled roofs, lizards scurry into niches just as their lizard ancestors did in the Middle Ages.

A visit always makes me want to take up painting, get serious about photography, and go on coastal hikes. Yet, whether the attraction is traditional villages or the Riviera’s balmy climate, Provençal living is usually perceived as only for the seriously wealthy.

Think again. In one riverbank village with a Crusader castle, a refurbished house of 85 square meters (915 square feet) is $178,000. With storybook, mountain views from its garden, a pastel-colored heartbreaker of a traditional Provençal house is $267,000. Monthly rentals in many locations cost under $760. And a couple can have a three-course meal with wine and still get change from $38.

The key to affordable Provence is location. There are the vaunted places everyone knows about…and those hidden under the vacationers’ radar.

Never straying far from tourist honeypots can leave the impression that Provence isn’t a viable living option. But investigate below the gilded veneer, and you’ll find an earthier Provence that’s just as desirable, but far less expensive.

Although the Riviera has no official boundary, relatively few non-French visitors explore west of Saint-Tropez. They’re missing the Riviera as it was before the parasol pines were exchanged for concrete, traffic jams, and the champagne-and-cocaine excesses of celebrities.

Mediterranean lookouts command high values everywhere. But prices in harbor towns between Marseilles and Toulon aren’t as astronomical as in Riviera resorts further east. If your heart is set on the Riviera—but you want a lower price tag—this is where to look. –Steenie Harvey

This article was republished with permission from International Living.


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