It’s no secret that home prices in the United States are astronomically high. Even a small house that needs work to be liveable may be out of reach. It’s why people are moving from high-cost cities to more rural areas. Some are even moving abroad. There’s a common misconception that it’s expensive to buy a house overseas. That’s not always the case.
Skyrocketing Prices: The United States Housing Market
Let’s start with the United States housing market. During the housing crisis of 2007-2008, a lot of people lost their homes. A lack of regulation meant that lenders were offering adjustable rate mortgages. Many who bought houses with them were blindsided by interest rate increases. They found they were unable to make their monthly payments.
Since then, the median price of a house in the United States has risen to $412,000 in 2023. While some houses are less expensive, many are out of reach for the average person. Stagnant wages have contributed to the problem. It’s difficult to save enough money to buy a house. Many people resign themselves to never owning a home as a result.
Who Can Afford a Home in Atlanta?
41-year-old Stephanie Synclair is an entrepreneur who earns about $80,000 per year. She wanted to buy a home in Atlanta. She was shocked to find that houses in her desired neighborhoods were priced at $800,000 or more. She couldn’t afford one. She didn’t want to spend her retirement money on a house.
With a budget of $450,000 Stephanie knew she had to find a solution that would allow her to buy a house. If Atlanta couldn’t work, what could? It turns out she had already found the solution during a vacation she took with her young son in 2012.
The Sicilian Dream
In 2012, Stephanie Synclair took a vacation to Italy with her son. While she was there, she fell in love with the island of Sicily. She felt that she could live there. But, given her preconceptions about the costs of living abroad, she thought it could only be a dream. She didn’t give it any thought beyond that.
After seeing her dream of owning a home in Atlanta crushed, Stephanie did some research. She learned about a small town in Sicily called Mussomeli. It turns out there were a lot of abandoned homes there. The town was known for selling them for as little as one Euro. She decided to work with a real estate agency.
A New Plan
Once she learned about Mussomeli, Stephanie formed a new plan to get the house she wanted. She didn’t want to buy a house that needed years of work to be liveable. Instead, she focused on finding a house that she could buy for a fraction of her budget. Her Italian real estate agency helped her.
She eventually found a 4,000 square foot house. That’s a lot of space and it needed some work. The work wouldn’t be a problem if she could save some money in her $450,000 budget. The question was, would the prices in Mussomeli be low enough to make the difference?
Can That Price Be Real?
You remember that the homes that Stephanie was looking at in Atlanta cost $800,000 or more. Could the prices in Sicily really be low enough to make her dream of living there a reality? She looked at houses that required some work. She knew she could budget enough money to renovate if she needed to.
Amazingly, she was able to buy that 4,000 square foot home for 59,000 EUR. That works out to about $62,000 in US dollars. She paid cash, thus saving money on interest and bank fees. She was also able to set aside $21,000 to spend on necessary repairs. Her total cost was still less than $100,000.
Making A Fixer-Upper Into A Home
Stephanie knew that her new house needed some work to be her dream home. She needed to make her $21,000 renovation budget stretch. She came up with a plan that would transform the neglected house into somewhere she could live comfortably. The low prices for construction work in Sicily allowed her to do that.
The house had three bedrooms. She wanted four. She used her renovation fund to convert the ground-floor garage into a living room with a bar. She also added another bedroom and bathroom. That type of renovation would have been far more expensive in the United States. She was able to do it for a fraction of the price in Sicily.
What About Living Expenses?
One of the biggest questions Americans have about living abroad is whether they’ll be able to afford it. After buying a house, Stephanie still had to think about the cost of everyday expenses. How much would she spend on utilities, groceries, and gas? Would her expenses be too high when compared to what she spent in the US?
She was amazed to discover how much less she would need to spend living in Sicily. Her expenses in Atlanta totaled $3,800 per month. That number included rent, utilities, car payments, and gas for her car. She didn’t want to spend that much in Sicily. But maybe she wouldn’t need to.
Sicily By The Numbers
Crunching the numbers revealed that Sicily was more than just a dream. It had the potential to be the best financial decision Stephanie had ever made. The difference in living expenses was significant. She’d save money every single month. Even taking her high rent in Atlanta out of the equation, she’d be spending far less.
What she learned was that her monthly expenses in Sicily would be a fraction of what they were in the United States. Once she moved to Mussomeli, her utilities and internet combined cost her just $258 per month. She also spent $389 per month for a rental car and gas. Prices may fluctuate but they’re still low compared to Atlanta.
Daily life in Sicily
Of course, Stephanie’s decision to move to Sicily wasn’t just about money. It was also about her quality of life. Living in a small town meant less hustle and bustle. She wouldn’t be dealing with the noise and pollution of a big city. She’d be able to relax, breathe fresh air, and get to know her neighbors.
One of the things that Stephanie loves most about living in Mussomeli is that she has access to beautiful local products. The local markets offer fresh produce, delicious baked goods, and other items. They were all priced affordably and allowed her to live on far less money than she had spent in Atlanta.
How Much Would It Cost to Retire in Italy?
Another looming question for Stephanie was her retirement. Although she was only 41 when she made the decision to move to Sicily, she hadn’t gotten serious about retirement until she was in her 30s. Would she have enough money to buy her house, pay her monthly expenses, and still have a comfortable retirement?
The answer ended up being a resounding yes. Stephanie had already calculated that she would need to have about $2.5 million saved to retire in the United States. Taking the lower cost of living in Sicily into account, she estimates she’ll need only $450,000. She already had more than that in her brokerage account. She’d be fine.
A Comfortable and Enjoyable Retirement
You might be wondering how much money Stephanie will need to spend each year once she retires. Will she be living on a budget and worrying about her money? Or will she be able to do all the things that make retirement fun and exciting? You might be surprised by the answer.
Stephanie’s estimate is that she’ll spend about $18,000 per year once she’s retired in Sicily. That budget will allow her to travel, eat meals in restaurants, go shopping, and live an active and happy life. Even at that low price, she’ll still have money left over. Since she’s still running her own company, she’ll have no trouble with money.
Can Anyone Retire to Sicily?
By now, you might be dreaming of retiring to Sicily yourself. Is it possible? We’d say it is, but you’ll need to save money and do some planning. If you’re employed, that might mean maxing out your contributions to your retirement plan. You might even get employer matching funds to grow your savings quickly!
We’d also suggest doing some research. You might want to calculate how much money you have now and estimate how much you’ll have when you’re ready to retire. That can help you create a budget and work toward a happy retirement in Italy.
The Sweet Life in Italy
Stephanie Synclair’s careful planning and willingness to take risks allowed her to buy her dream house in Sicily. She’ll spend far less than she would have in Atlanta and might even be able to retire early. That’s something many of us dream of doing.
If you love the idea of living abroad and retiring early, you can do the same thing Stephanie did! With a little planning and saving, you can afford the cost of buying and renovating a house. And the low cost of living can keep your expenses in check and allow you to live your best life!
