European castles going for £1

European castles going for £1 - at - the best of the week's international financial media.

Who'd want to own a castle? As Anthony Steyger and Jack Gee point out in the Daily Mail, they might look nice, but with their draughty corridors, damp walls, windswept turrets, titanic maintenance bills and awkward locations they are really a pretty unalluring prospect. And, as such, one best left to wealthy aristocrats, royals and the oddball celebrities who have the deep pockets torun them.

This is sensible advice, but it isn't always heeded: many of us still want to be "king of the castle". If you do, say Styger and Gee, note that there is one main rule with castle buying: don't do it in Britain. Here, even the most modest one will set you back at least £5m. Instead, look to France, Spain, Italy, Austria and Germany - there are more than 40,000 castles in mainland Europe, but demand is thin on the ground. Which means they will often go for the price of a four-bedroom house in Leeds - or even cheaper, if you are prepared to renovate a wreck.

However, they tend to be cheap for a reason: renovating them is ruinous. Catherine and Jean-Claude Gonneau bought the 75-room Chateau de l'Hermitage in northeast France three years ago - "it cost the same as the six-bedroom Kensington flat we sold in 2002, and the work needed will cost three times as much", banker Jean-Claude told John Follain of The Sunday Times. Originally built for the ninth Duke of Croy on the eve of the French Revolution, it has been neglected for decades, almost to the point of no return. Three years on, it is still unfurnished and uninhabited by the Gonneaus, who expect to finish renovating it in ten years' time.

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Simply finding the correct items to fit the Chateau has been a mammoth task, with Catherine commuting from London almost weekly to sort out various hiccups. Working out how to heat it, for example, was a minefield, only solved when the Gonneaus found 154 British-made cast-iron radiators being flogged by the Quebec parliament - and had all 40 tons of them shipped over. "When I got the first estimates, I nearly had a heart attack," admits Jean-Claude. "Restoring the parquet costs £105 per square metre." The Chateau has 9,000 sq m of living space. But Catherine has no regrets about the purchase: "house prices are so reasonable" in the northeast, close to the Belgian border, she says, that "this area is actually France's best-kept secret".

The cheapest castles of all can be found in the former East Germany, says Jack Gee in The Sunday Telegraph. Sixty years ago, at the end of the World War II, more than 2,000 stately homes were confiscated by East Germany's Communist regime. Today, most of them are almost entirely dilapidated. "That has been the deterrent for almost all foreign home-buyers," says Manfred Pawlik, who runs a property agency from his own castle, Schloss Triestewitz. "It's a tough market. I sold only two castles last year. The buyers were Americans," he says. Neither family has moved in yet. Michael Dane, a British landscape architect based in Weimar, is currently trying to find buyers for Reinhardsbrunn Castle: the sale price is £1. But there's a catch: you'll be expected to invest in the property, and the 882- year-old castle in eastern Germany is likely to have renovation costs of around £450,000. Dane is trying to offload the leasehold on behalf of his employer, a European hotel chain, which has already spent vast sums getting the castle ready for refurbishment.

Still, the state government in the area (which still owns the freehold to many of these types of properties) is offering financial inducements to foreign investors to get them interested in renovating castles: get it right and state grants can now cover much of your renovation bills. But even with this king of inducements, is it possible ever to actually make any money out of castles? Jimmy Welsh thinks so, says Jack Gee. He was the only person bidding when he snapped up Schloss Schochwitz in Saxony for £70,000 at auction. He is also the first Englishman to buy in the area.

Compared to most, Schloss Schochwitz is in pretty good shape. Many of its peers have been virtually deserted since the Forties, but Welsh's castle remained occupied - as a barracks and a school - and was given a major renovation just two years ago. It now has a new roof, electrical wiring and 90 of its rooms have new windows. Better still, the local authority is renting a wing for use as a kindergarten for the next three years at £20,000 a year, and if Welsh can show he's rescuing a threatened property, he will, he says, be in line for a state grant. Welsh has not made definite plans, but suggests as one possibility turning the castle into 15 flats that he would then sell for £100,000 each.

Sounds like easy money, but buyers beware, says Dane. "The Germans are indeed being generous with funds to stimulate the sale of these old castles", but after decades of neglect the cost of renovation is always more than you think it will be. If you must buy a castle, do it because you love it, because it probably won't ever make you money.