Where to invest in real estate in Italy

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  • The two experts shared places in Italy that investors should consider for their next property.
  • One suggested avoiding the north of Italy and going south in search of better deals.
  • In general, the outskirts of big cities are also profitable.

Real estate remains an attractive asset class for investors amid the pandemic.

In Italy, your monthly rental income can sometimes fully offset the costs associated with your mortgage, and your profit can be more than your investment in financial assets.

Investors in real estate in need of refurbishment, including energy restoration or earthquake work, can take advantage of the “super bonus”, which provides 110% of the required funds if you are registered with the Register of Italians Residing Abroad (AIRE).

Italy is not the cheapest country to buy property, but you can still find good value for money when compared to other destinations. The basic tenets of a real estate business are always the same: location can be critical to maximizing your ROI.

We discussed some of the best places to invest in real estate with Vincenzo de Tommaso, Managing Director of the company’s research office. Idealista, a technological platform for the real estate market.

When choosing a neighborhood, de Tommaso recommends looking at the average capitalization rate, which is calculated by dividing potential rental income by the purchase price.

“Generally speaking, investing in the outskirts of big cities is profitable. In Milan, for example, you may have 8.3 capitalizations instead of the 5 that you find in the city center, ”he said. “In Quarto Oggiaro, which was considered a bad area, but it changes a lot, you can set the capitalization level to 12. The same is happening in Bologna, where in Borgo Panigale the figure is 8, compared to 4.9 in the city center.”

According to de Tommaso, the best cities are Ferrara, Bergamo, Turin.

“Ferrara has a university and is very dynamic. Bergamo has Orio al Serio airport, Turin has a lower price, but it is at the crossroads between France and Italy, ”he said. “Another place of value is Latina and its province. Near the beautiful Sperlonga and the island of Ponza, as well as Rome, it is now very cheap. “

He also points to Trapani, Perugia and Lecce as points of interest. Looking out of town, he advises avoiding expensive Chianti.

“The area around Viterbo is better, as is Cilento, close to Salerno, and Colli Euganei, Padua,” he said, citing price increases due to restoration projects and the opening of new services, parks and public transport networks.

“Due to the pandemic, many people are looking for upper floors and bright apartments,” he said. “Community presence is also very important and can make a difference in whether a place is livable or not.”

Taking another look at the capitalization rate, Federica Tordi, communications manager of the real estate web portal. Immobiliare.it proposes Genoa, Bari and Naples as places with a large population – and encourages a search in the south.

“Northern Italy is the most expensive part of the country, and the further south you go, the lower house prices are,” Tordi said. “Abruzzo and especially Molise and Gargano in Puglia are full of great deals and are great places for a wonderful holiday.”

Unless you are buying low-price hinterland properties, you can at least expect to receive higher rents in cities if you rent out your properties to tenants.

“If you want to invest in yourself, you have to think long term,” Tordy said. “Real estate was resilient even during the pandemic.”

Average home sale price and rental income in Italy

For a general look at broader trends in Italy, see the figures below from Immobiliare.it data:

Milan

Average selling price of a house: 4474 € / m2
Average annual gross rental income: € 12,000.
Capitalization rate: 5.2%

Roma

Average selling price of a house: 3026 EUR / m2.
Average annual gross rental income: € 9,600.
Capitalization rate: 4.8%

Genoa

Average selling price of a house: 1338 EUR / m2.
Average annual gross rental income: 6,000 euros.
Capitalization rate: 5.4%

Naples

Average selling price of a house: 2381 € / m2
Average annual gross rental income: € 9,000.
Capitalization rate: 5.2%

Bologna

Average selling price of a house: 2968 € / m2
Average annual gross rental income: € 9,360
Capitalization rate: 5.9%

Turin

Average selling price of a house 1655 € / m2
Average annual gross rental income: € 5,976.
Capitalization rate: 4.5%

Bari

Average selling price of a house: 1800 EUR / m2.
Average annual gross rental income: € 7,800.
Capitalization rate: 5.9%

Firenze

Average selling price of a house: 3818 EUR / m2.
Average annual gross rental income: 10,200 euros.
Capitalization rate: 5.8%

Venice

Average selling price of a house: 2429 euros / m2.
Average annual gross rental income: € 9,000.
Capitalization rate: 4.4%

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