Buying a property in Italy is typically part of a plan to eventually retire there. It is much easier to make these decisions when you’re younger and still have more steady income and years until retirement. It can be a great investment to buy a property now and rent it for most of the year, except for your few yearly visits, until you are ready to move there. Or maybe you just want to buy an investment property and you never plan to move full-time.
Whatever your reason and however you go about the process, it can be an incredible investment when renting while you are not there. It’s ideal to rent it out to cover all your property expenses. You’re much better off renting to travelers and covering your fees and mortgage than the home staying vacant for most of the year. Everyone coming to Italy, and there are many travelers each year, needs a place to stay. Rest assured there’s a high demand for rentals!
Okay, let’s back track a bit. You might be thinking, “I want to buy a place because I DO want to move.” Maybe your plan is really to buy a place and move in but you’re scared to make the commitment or worried you won’t be able to financially support it. It’s actually very popular in Italy to rent out rooms in large properties as a type of bed and breakfast.
So, fear not. You’ll need to just get a license at the commune in your local and also get a certification saying your home is livable, called the certificato di abitabilità (literally “certificate of habitability”). If you’re friendly, enjoy meeting new people, and want to have a closer interaction with guests staying at your property, this could be a great option for you. Offering an English speaking live-in host can be an incredible advantage in marketing your place. These are also called agriturismo or B&B so be aware of these when writing your property postings.
You’ve decided to buy. Now, how do you manage the property from abroad? Luckily, hiring a property managers can solve your problems and calm your fears about making the purchase. This agency will manage the property for you, greeting guests, serving as the 24 hour emergency service, solving all hands-on issues, and also giving you access to marketing you would otherwise have to do alone. Typically these agencies have a variety of properties and a returning client base, meaning you are essentially two steps ahead without having to do anything on your own. It can be difficult to trust another person to run your ‘business’ for you but it also takes away from many possible complications within the situation.
Many travelers are more likely to trust reputable rental agencies rather than take a chance on a stranger online. Also, these agencies already spend a lot of money and time ensuring that their page is search engine optimized. Clients know that when going with an agency, they are guaranteed support if something goes wrong. If it’s 2 in the morning on the other side of the world and a guest calls you and says “a pipe burst, the apartment is flooded” or “the washer broke and my clothes are locked inside” there’s little you can do for them in that moment. Anything you do in handling the situation will take more time than it would for someone living close-by or at least working in the area. Plus, your guests will feel better.
That being said, getting into the rental agency is no small feat. Agencies have very strict codes and restrictions about the properties they allow in their portfolio. You may not qualify as the standards are very, very high. However, if you do, the property managers typically take between 15–30% of the rental charge. If you chose the right manager, this can prove to be even more profitable for you but you have to proceed with caution when accepting contracts with these agencies or individuals.
If you’re set on doing things on your own, it’s very possible. It’ll be more work of course but you are able to keep your profits for yourself. Additionally, as we mentioned, the rejection of property is possible from agencies with high standards. If you’re going to handle it alone, especially from abroad, keep in mind these few things. Definitely try to recruit someone in the area to help with greeting guests and cleaning in between visitors. You can easily hire a cleaning service. However, it’s important to hire someone you trust to manage keys and relationships.
You may have to invest a bit in marketing also as you’ll be starting from zero with no real base of customers. As time goes on and you receive positive reviews or clients begin telling their friends about their great experience, word-of-mouth marketing will help you a lot. Eventually your marketing costs will go down significantly as people begin to actually search for you. Using existing platforms to post your property is a good place to start. They can reach many potential renters as opposed to a property manager who may only post on their website.
THE MARKET FOR INVESTMENT
Of course there will be competition in these business. There are plenty of hotels, hostels, and other people renting out their properties also. It’s good to be reasonable with what to expect. Usually you can expect to make about 5%–15% of the property value every year in rentals. This includes rough deductions of costs like advertising or a property manager, cleaning, etc. Buying in a city, it’s best to focus on smaller spaces, such as two bedrooms or less. When moving further and further into the countrysides, better investments are the bigger two-bedroom or more properties. Property booking during best weather months, around 10 weeks is most likely. If the location and price are competitive, you can get up to 20 weeks of the year booked. It all depends on the location and strategy you use to put your property on the market.
Whatever you decide to do about your property, whether set up a B&B, go through an agency, or manage it alone, it’s a great investment. The return of investment is high and the market remains fairly stable in Italy. It’s a safer buy than many other places in terms of risk.