Investing in the short-term rental market in Italy

Before investing in a property to rent out, have a look at these top locations put together by real estate agents Tecnocasa

Where is it best to buy a property in Italy if you plan to rent it out? / Gtres
Where is it best to buy a property in Italy if you plan to rent it out? / Gtres
24 February 2020, Redaction

The market for short-term rental investments remains one of the most attractive in the real estate world. Let's have a look at how the short-term rental market is looking in Italy, as well as the best places to invest if you're thinking of buying a property to rent, according to real estate agents, Tecnocasa.

Short-term rentals amendment 

Short-term rentals are on the rise in Italy but have also recently been the subject of debate due to an amendment in the legislation. This amendment has imposed restrictions on the duration of rental periods and VAT obligations for those who rent out their apartments, in a bid to get rid of tax evaders. This amendment, however, was eventually withdrawn, and gladly accepted by those involved in the sector, who considered the new law useless for the purpose and that it only made the process more complicated. 

The president of the Italian property expert company Confedilizia, Giorgio Spaziani Testa, is also satisfied with this result and hopes that "at last, we will start looking at real estate as a resource to be safeguarded and not as an investment to be punished."

Investing in a property for short-term rental

Investment in a property with the plan to use it as a short-term or holiday rental property is becoming more and more popular in Italy. According to the latest Tecnocasa data, sales for investment use in recent years have been increasing.

"This is evidence of how the real estate asset is returning to be in vogue again thanks to cheaper prices and more financial gain," points out Fabiana Megliola, head of the Tecnocasa studies office. He continues to clarifiy that among those who buy for investment, many are opting for tourist rentals or the creation of holiday homes or B&Bs.

The phenomenon is most prominent in tourist resorts and large cities where the market is particularly lively. Among the metropolises analysed, the central areas and those with high tourist attraction have given momentum to this type of investment. Prices remain fairly accessible for this type of property and can be a good investment, provided that the costs related to the management of the property are properly evaluated but do keep in mind that there is always the possibility that the market may become saturated and your investment could lose value. 

Where to buy a house to rent

If you're interested in buying a house to rent then location is everything and it's important to know what is most in demand in the area. Among the big cities that are have been most popular in recent years, Tecnocasa has made the following recommendations.

Milan

Demand in Milan is concentrated on 2-bedroom apartments, making up 45.1% of short-term rentals. This confirms the attractiveness that the city has for investors who focus mainly on 1- or 2-bedroom apartments. 27.4% of purchases in Milan are for investment. A decidedly dynamic market for this type of rental is the one not far from the canals, such as Porta Genova, Viale Coni Zugna, Via Solari, Savona and Tortona. In Porta Romana there is an increase in investors, as well as an increase in short-term rentals in the areas of Via Gioia and Via Ponte Seveso also because they are not far from the central station.

Turin

Investors generally use capital of less than 200 thousand euros to invest in real estate for short term rentals or student accomodation. In Via Lagrange, Via Roma, Via della Rocca and Piazza Bodoni, in fact, investors are looking for 1- and 2-bedroom flats to make their income and the capital available is on average between 50 and 250 thousand euros. There are also those who buy properties in order to start a B&B or holiday home, a trend that has been on the rise for some months now.

Naples

Among the neighbourhoods in Naples with rising house prices is Monteoliveto-San Felice, following a big increase in purchases for investment purposes such as holiday homes and B&Bs. These properties are concentrated mainly near Piazza del Gesù and the Cloister of Santa Chiara. In the area of Via Toledo and the Spanish Quarters the real estate demand is very lively; it is fuelled by both first time buyers and investors who buy to start B&B activities or to rent to students. To look for properties for tourist and accommodation purposes, local investors in the area tend to focus on small properties but with bigger potential.

Palermo

It is in the historical centre of Palermo which has been partly redeveloped and pedestrianised, there is an improved commercial offer, especially on the catering and hospitality front. For those who wish to buy a property for tourist rentals purposes, investors tend to spend a maximum of 100 thousand euros on 1- and 2-bedroom apartments.

Bologna

Always a very dynamic market, the number of purchase requests is constantly growing while the supply is decreasing in the city. There is always a demand for 1- and 2-bedroom apartments by investors who intend to start B&Bs, while larger properties are bought by entrepreneurs who split, restructure and then resell properties.

Florence

In the Santa Maria Novella area of the city, you will find investors mainly interested in tourist rentals. This is also the case in the San Frediano area, where there are many properties purchased to be used as B&Bs. In general, the majority of investment in properties for rental purposes are found in the most central areas of Florence.

Verona

In the historical centre of the city, the market for small and medium-sized, 2- and 3-room apartments is doing well, thanks to the demand from investors for the start-up of tourist rental activities. In the Veronetta district, demand is always high also in the investment sector, there is a lot of interest in properties that can be transformed into B&Bs and holiday homes. In general, a possible investor would need a budget starting at 120-130 thousand euros up to 200 thousand euros

If you do decide to invest in a property with the aim of using it as a short-term rental, click here to find out how the short-term rental contract model works in Italy.

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