It’s a foreign-property-buyer’s dream. Rent your overseas home to holidaymakers to cover your mortgage and costs, enjoy regular visits there yourself between clients, and have the house to retire to or sell for a profit years later. For an increasing number of buyers in Italy, this dream is very much a reality.
Half of all foreign visitors to Italy travel independently rather than on a package deal. They all need a place to stay, and many prefer the freedom of a self-catering property to the restrictions of a hotel. Thus there’s a healthy market for holiday rentals in Italy – and with budget airlines having opened up hitherto little-visited parts of the country, that market extends far beyond traditional hotspots like Tuscany, Venice, and the northern lakes. If you’re not living in Italy and only plan to visit your property several times a year, it’s safer to rent it to holidaymakers when you’re not there than to leave it standing empty for months on end. And if you blanch to think of the damage and breakages that paying guests might inflict, take heart from the fact that Italy tends to attract a rather civilised and cultured sort of visitor, extremely unlikely to leave your house in tatters.
The many positive aspects of offering holiday lets in Italy mean that you won’t be the only person doing it. Wherever your property is, it’ll have competition. And even if it’s the most gorgeous house within a hundred miles, you can’t expect to fill it every week of the year. Ten weeks – spread across the warmer months – would be a reasonable result. Twenty weeks a very good one. It’s true that some locations yield almost year-round interest (Venice, Florence, Rome, Assisi, and certain rural spots convenient for both summer swimming and winter skiing), but be warned that the prices of properties in these places are sky-high. If you’re a pure investor, by all means go for Italy’s most popular locations and put in big bucks to get back big bucks. Most buyers-to-let, however, are looking for an affordable house in a location they might one day retire to – and such places aren’t often an epicentre of mass tourism. For more on the interrelation between location, property prices and holiday rental prospects, see the 'Italy in Bite-Sized Chunks' section further on.
In terms of gross rental yield, owners of holiday properties in Italy make between five and fifteen percent of their property’s value each year. Seven percent is the most common gain – hardly a fortune, but a better rate than many other investments and probably enough to cover your costs. Remember that these will include advertising, cleaning, maintenance, insurance and income tax on the rental revenue. Holiday rental properties are no get-rich-quick scheme; think of them as a medium-to-long-term venture.
Of course, some properties rent more often – and thus more profitably – than others. Photogenic properties get lots of interest. Period buildings hold great appeal. Farmhouses in central Italy are perennially popular (especially if they have a pool) and apartments in tourist cities are always desirable (especially if they’re central and have an outdoor space like a balcony or terrace). For optimal return on your investment, go for two bedrooms or more in a country or coastal property (because they’re popular with groups and families), and two bedrooms or fewer in a city apartment (because they’re popular with couples and young people). Being within an hour’s drive from an airport is a major advantage, with fifty percent of potential clients unwilling to face more than ninety minutes on the road. Whatever and wherever your property, it should be highly comfortable, well-equipped, spotlessly clean and perfectly maintained. Your clients will have high standards and high expectations.
As well as location and property type, one of your biggest considerations will be whether to use a holiday rental agent or to manage the rentals of your property yourself. The big plus of using an agent is that there’s far less work for you. The big minus is that the agent will take between fifteen and forty percent of your rental charge in commission. But if using an agency means your property is better advertised and more often booked, then you might still gain by using one. A problem is that holiday rental agencies’ standards are extremely high, and around fifty percent of owners find that their properties aren’t deemed good enough for inclusion in an agent’s portfolio. If you manage your property yourself, you obviously get to keep all of your rental charge, but you must be prepared to handle all the advertising and booking, and either be on site in Italy to greet clients and to deal with emergencies or engage someone local to do these things for you.
Advertising is an agent’s particular strength, and you’re unlikely to get better exposure managing the property yourself. Advertising is more cost-efficient for an agency than for an individual because they have a wide portfolio of properties all displayed on the same website or in the same brochure. They’ll take the professional-standard photos and write the enticing description for you, they’ll manage the property’s availability and take the phonecalls from clients. Crucially, they’ll also collect rental payments and take all the risks connected to this – handling foreign cheques and currency conversions, paying bank fees for bank transfers, etc. An established agent with many properties and a professional website seems more trustworthy to many would-be holidaymakers than some independent stranger they found on the internet. And because customers return to agents year after year, you have the benefit of immediately exposing your property to an established client base rather than having to build one up yourself. It’s also likely that net-surfers will more quickly find an agent’s website than your own. Agents invest heavily in making their site appear in a search engine’s first twenty hits.
Most agents will have someone available to greet your guests on arrival at the property. They’ll hand over the keys, show guests how everything works, and generally offer a reassuring presence. If anything goes wrong during the holiday (broken washing machine, blocked drain, power failure…), the guests know they have a friendly face to telephone – and usually on a 24-hour basis.
If you want to use an agency, contact several to see what sort of rental return they think your property could get, what commission they charge and what services they offer – as each agency operates slightly differently. Also contact them up to a year in advance of when you’d like to start renting your property, as inspection, approval, webpage-design and so on all take time. As different agencies attract slightly different clientele, there’s some variation in the type of properties they want to put on their books. Some agents deal only in Tuscan farmhouses, for example, and some only in Venetian apartments. Generally, though, they’re all looking for a meticulously clean and well-maintained property – hopefully with a bit of character to it, too. Most agents specify that they like homes with ‘a relaxed, personal feeling’ (these are holiday homes, after all). So, while perfect cleanliness is a must, an antiseptic showhome with icy, minimalist furniture at odds with relaxation isn’t really right. Comfortable, sturdy furniture indoors and out, and tasteful décor with personalised or localised touches are all good. Some agents will give you practical advice on furnishing and decoration.
Essentially, agents are looking for the types of things most holidaymakers are looking for. Large country houses are always popular, far more so if they have a pool. Village houses and city apartments are more desirable if they have a garden, terrace or balcony. Some agents insist that all properties on their books must have an attractive view. Well-kept grounds are a must, as are comfortable beds (with proper sprung mattresses) and a well-equipped kitchen. Note that a good agent will have a well-developed instinct for whether an owner is just looking to milk cash from his or her property or whether s/he genuinely cares about the happiness and comfort of guests, and will always reject the former.
If you’re independent-minded and like the idea of putting in a bit of work and keeping all the rental return your property generates, you can of course go it alone. (If all the agents reject your property, then you’ve got no choice!) Many thousands of people rent their Italian property very successfully without being on any agent’s books. Essentially your only obstacles are getting the property noticed and getting someone to greet guests and be on site in emergencies. For the latter, if you’re not living locally yourself, you should be able to find a reliable neighbour or ex-pat happy to take on extra paid work like this, and, crucially, to clean the property between clients. Advertising can be tricky and expensive, but if you advertise well and build up a good client base in your first year – and exceed guests’ expectations wherever possible so that they rave to their friends – your marketing costs should drop in subsequent years as returnees and their chums actively seek you out.
Certainly you’ll need a good website, with lots of photos of the property. Reckon spending €500 on getting this up and running. Remember that the whole world can visit your site and that the Germans, Dutch and Scandinavians are some of the biggest fans of holiday homes in Italy. The majority of these nationals can read English well, but it would look very good indeed if you offered a translation or two on your website. You could still specify that all e-mails and phonecalls must be in English. (Don’t know where to find a translator? Contact your nearest university and ask if a language student would like to earn a little cash.) If you have a very snazzy website, it can show your property’s availability and enable clients to reserve specific weeks. If that’s too complicated, just use the site to establish contact and provide your phone number and e-mail address.
An excellent way to maximise the benefits of online advertising is to get your property included on a large centralised website of privately-owned properties. These sites will provide free or cheap online space for you without acting as your agent, and potential clients are drawn to them more easily and more often than they might be to individual websites. Two such sites worth investigating are www.ownersdirect.co.uk and www.vrbo.com. Publications-advertizing is always effective too. The UK broadsheets, especially the Sunday Times, are popular spots to place classified ads for holiday homes abroad. Dalton’s Weekly and The Lady magazine are also good for foreign property ads, as indeed are specialist travel magazines. And don’t forget niche magazines like Private Eye and Gay Times, as well as your local newspaper.
If you’re on site, living in Italy, and like the idea of having more interaction with your guests than just welcoming them and being on call in emergencies, you could set your property up as a B&B or an agriturismo rather than just a self-catering holiday home. You’d have to be a whiz in the kitchen and an unfailingly friendly sort of person to do this most successfully. B&Bs are extremely popular in Italy, but it’s surprisingly rare for non-Italians to run one. You could point this out in your advertising, offering an English-speaking home-from-home. To set your property up as a B&B, you’ll need a certificato di abitabilità to say it’s habitable and a license from your local comune. Note that B&B rates are very reasonable in Italy, starting at about €17 per night. Note also that your guests will be expecting a lavish breakfast each morning rather than just bread rolls and coffee.
Potentially more profitable, if you have the right kind of property, is the agriturismo. There are around 11,000 of these across Italy [as of 2006], purportedly together raking in about €700 million each year from visitors who pay up to €60 a day to stay on a working farm and be fed local produce. The Italian government will grant your property agriturismo status only if it’s productive in some agricultural manner – so you might press oil from your olive grove, keep bees for honey, breed goats for cheese or for angora wool, have a fruit orchard, or keep a stable of horses and offer riding lessons. Non-Italians don’t often run agriturismi, because they don’t usually buy or inherit a working farm in Italy, but there’s no reason why they can’t. Agriturismi-owners usually provide full board, and cook with high-quality local ingredients, but guests should also be at liberty to cook for themselves. People who run, and stay in, agriturismi are passionate about the countryside, about rural traditions, and interested in ultramodern ideas of sustainable tourism. They’re keen on good home cooking and good company round the table.
Ultimately, providing a lovely property for people to enjoy holidays in – be they self-catering or otherwise – is a pretty satisfying way of making money, and you should warm to the prospect. Yours will be the business of facilitating happiness, of creating life-long memories. Your home will feature in the travel anecdotes and photographs of innumerable holidaymakers, and they won’t forget the place. Far from ‘diluting’ your beloved property with their occupancy and their wear-and-tear, your guests will in some sense add to it – keeping it fully topped up with happiness when you’re not there. Now isn’t that a pleasant thought?
Adored by generations of well-heeled travellers, the northern Italian lakes (mainly in Lombardy) see some of Italy’s best holiday rental returns. Sporty Lake Garda has the most visitors and the highest prices, but Lakes Maggiore and Como are also major players. Property prices are roughly €100,000 per bedroom on average, with period villas being the costliest properties and newly-built apartments often representing the best value for money. Weekly summer rental on a one-bed is about €500-€750; on a two-bed €700-€1,000; on a three-bed €800-€1,200. Note that a property pitched between a lakeshore and a ski resort could be rentable almost year-round. Lombardy’s capital Milan is Italy’s wealthiest city, with a huge number of foreign businesspeople sent here on temporary contracts and needing to rent an apartment for a few months or years. Milanese property is twice the cost of lakeside properties, though. Coastal Liguria is a holiday paradise with a market, clientele and rental prospects similar to those of the northern lakes. Property prices tumble if you climb into Liguria’s lovely mountainous hinterland.
Venice represents one of the best investments in all of Italy – if you can afford to buy here. At almost all times of the year, tourists are desperate to find accommodation in this fantastical watery city, and there’s little chance they’ll lose interest in the years to come. You’re unlikely to spend less than €150,000 per bedroom. Note that Grand Canal prices are stratospheric while those near the bus and train station and out on islands in the lagoon are the closest to earth. One-bed properties tend to rent for €600-€1,000 a week, two-beds €800-€1,500. If you can’t afford Venice, consider a property in elegant Treviso – half an hour’s train ride from Venice and increasingly popular with Venice-visitors seeking to avoid the city’s high accommodation costs. Romantic Verona is another tourist-draw where central apartments are considered a good investment. Visitors tend to be here for less than a week, though. Ever-fashionable Cortina d’Ampezzo in the Dolomites offers superb rental returns in the ski season, although its property prices can be very high.
Just over half of all visitors to Italy make their way to Tuscany. For property, the region is the most expensive in Italy, and offers some of the country’s highest rental returns. Rural farmhouses are the most desirable properties, with rental rates around €2,000-€4,500 per week in high season. The Chianti hills north of Siena see the region’s apogee of property and rental costs, while its mountainous north sees the most modest prices. The countryside around Florence, Siena and Pisa is fairly saturated, and buyers are increasingly considering Cortona, Lucca, Arezzo and the coast. Tuscany’s beautiful neighbour Umbria has an only slightly cheaper market in farmhouses. It also boasts spectacular medieval hill-towns much loved by visitors. Pilgrim-pulling Assisi gets about five million visitors a year, with Christmas and Easter being peak season as well as the summer. A central two-bed apartment for €200,000 in Assisi could get you €500-€800 per week. The numbers are not much smaller in well-visited Todi or Orvieto. Umbria’s bewitching and reasonably-priced capital Perugia offers two rental markets: short-term lets to tourists, and mid-to-long-term lets to international students and foreigners here on business. A two-bed apartment in Perugia should yield around €600 per month on a long-term let. As for other central Italian regions, Le Marche and Abruzzo currently have very good-value property, but neither sees huge numbers of visitors so you’d have to market well here.
Cultured Firenze and historic Roma are the second and third most visited cities in Italy (seductive Venezia is the first). Tourists come pretty much year-round to both, and each has a population of international students – so there are at least two different markets to exploit. Prices and holiday rental rates are not much below those in Venice. €100,000 per bedroom is the minimum you’ll pay for an apartment. You might charge holidaymakers up to €800 a week in high season for a one-bed, €1,000+ for a two-bed. While you won’t struggle to find clients, a central location or an outdoor space like a balcony, terrace or patio will make your apartment all the more enticing. You should expect to fill the place every week in the warmer months, and many weekends in the winter as people take short city breaks. A city apartment is generally considered a reliable investment. There’s the added advantage that, as cities enjoy optimum travel links, you can enjoy flying visits to your property between clients more easily than you might to a farmhouse in the country.
Relatively difficult to access until recently, Italy’s south and the islands of Sicily and Sardinia used to be little-visited by non-Italian tourists except for a handful of super-stylish, exclusive hotspots – e.g. Campania’s Amalfi Coast, Sorrento and Cápri, Sicily’s Taormina, and Sardinia’s Costa Smeralda. Improved transport connections over the last decade or so have brought visitors to a much wider area across the south, and the future looks promising for holiday rentals down here. The traditional visitor hotspots named above are still as hot as ever, with prices and rental rates among the highest in Italy. But increasingly popular newcomers, with steadily mounting prices, include the resort-towns of Maratea in Basilicata, Cefalù on Sicily, and Alghero and Cágliari on Sardinia. Also hotting up are the chic volcanic Aeolian Islands off Sicily, and the stiletto heel of Italy’s boot, Puglia – especially its teapot-like trulli properties, which rent for about €800 a week in high season. Comparatively low property costs coupled with expanding tourist interest make Italy’s south and islands a very interesting area for long-term investors. Note that the summer season is much longer down here. Reckon on renting your place for twenty weeks a year, rather than the ten you might rent somewhere in northern Italy.
London-dwelling New Zealanders Emma and Ross Aucutt own an apartment in the beautiful hilltop town of Montefalco in Umbria. They’ve joined together with several friends who own properties in the same area to advertise and manage their holiday homes together – calling their group ‘Montefalcons’. The couple’s long-term plan is to relocate to a ruined farmhouse they’re restoring just outside Montefalco and live off their holiday rentals income.
“One of our closest friends is a prominent New Zealand artist, Alison Ryde, who’s been living in Montefalco since 1996,” Emma says. “We visited her and her family there repeatedly and completely fell in love with the place. We bought a tumbledown farmhouse in an overgrown olive grove about ten minutes’ walk out of town, and we’re slowly doing that up. In 2005 Alison found us a lovely apartment in the town, and we mortgaged everything and bought that too.” The apartment joined a small group of holiday properties which Alison and another friend manage, although Emma has started to help with bookings and paperwork to give Alison more time to paint.
“The main thing that’s made it work so well for us,” Emma says, “is that we’ve got Alison there on site in Montefalco to do all the small things for us, from watering plants to letting in the plumber. She meets the guests and has really good local knowledge and gives her time to people. We’ve also got a fantastic cleaner and we really look after her. If we were just renting our property without the other properties in the group, it would be very expensive in terms of advertising. Because we have several properties, it’s more cost-effective.” Currently, the Montefalcons group has two apartments and a two-bedroom house, and will be taking on another three properties later this year . They also act as a contact for two local agriturismi with ten apartments each.
Emma has clear advice for anyone hoping to offer holiday lets on their Italian property: “Make sure your property description is as detailed as possible. The most important thing is to take good quality photographs. It’s the photographs that really sell a property. And always chase up any enquiry immediately. Even if you go on holiday, you’ve still got to be contactable and be able to get back to people straight away.” She also believes you can extend your rentals season by providing winter comforts and distractions. “We actually do rent twelve months of the year. We had someone for the whole of last November. The apartment has double-glazing, really good shutters, and central heating. We’ve put in Sky television and provided an extensive book and video library. It’s very comfortable and well set-up for off-season bookings.”
For more information on Montefalcons, see www.montefalcons.com