Buy to Let Properties for Sale in Italy [guidebook]

Oh, you're a fan of Robert Kiyosaki and you want to dive into the Italian real estate market to build up that sweet, sweet passive income?

Guess what? So am I!

With 15 years of experience in the real estate game, I've not only honed my skills but also helped my own family find lucrative investment opportunities to buy and rent out. It’s safe to say, real estate has become a family sport at this point.

Now, let me save you some time—my expertise is all about the market in Milan.

And no, I won’t feed you fairy tales about flipping houses like they do on those reality shows. We're here for the long-term game, the authentic Italian experience, not some quick-fix drama. I’ll guide you through the ups and downs of investing in Milan, one of Europe’s most lucrative and stable markets.

So, buckle up! If you want to expand your portfolio and make a solid return, you’re in the right place. But if you're still dreaming about "buy low, flip high," well... maybe this isn’t the conversation for you.

Let's keep it real, okay?

Why Italy is a top destination for property investment

When buying a property to let, before even thinking about yields, my golden rule is always: attract reliable tenants first. My mantra? "Better to have a stable and secure return than double the income from unreliable tenants."

By "reliable tenants," I mean those who pay on time, respect the property, and follow the condo rules. These are the tenants who ensure a stable and secure return on your investment. Simple, right? But finding them is all about the location.

So, what defines a prime location? Let's break it down.

The key drivers that make a location top for investments include:

1. Demographics: The bigger the population growth, the higher the demand for rental properties. More people equals more renters.
2. Public infrastructure investments: Think better transport, schools, hospitals. My motto? If the government’s investing, I’m investing too.
3. Local income growth: Higher local wages mean more tenants who can pay rent—and on time.
4. Events and tourist attractions: Cities buzzing with activity draw tourists, expats, and digital nomads looking for both short-term and long-term stays.
5. Safety: A secure area gives tenants peace of mind—something they're willing to pay for.
6. Universities and large companies: Proximity to educational institutions and major employers attracts students, professors, and professionals on work assignments.

Yes, there are cities in Italy more famous to tourists, like Florence, Venice, or Rome, and even whole regions like Tuscany. But it all depends on the type of tenant you want.

Speaking of tenants, I usually categorize them into these groups:

• Tourists: Short stays, quick turnovers, great for holiday rentals.
• Luxury clients, especially foreigners: HNWIs (High Net Worth Individuals) seeking well-organized cities where they can live safely and enjoy low taxes.
• Working professionals on temporary assignments: Reliable, typically long-term renters.
• Italian families: Looking for homes in stable neighborhoods.
• University students: Often short-term but consistent in academic cities.
• Foreign retirees, digital nomads, and artists: Italy is a dream for these groups thanks to its lifestyle and quality of life.

If you haven’t decided where to buy your property yet, this guide will help you navigate the best places in Italy.

And remember, stable returns come from stable tenants.

Start your investment journey today! Explore Milan's premium real estate opportunities with our expert guidance.

Financial considerations for buy-to-let in Italy

Expected Returns and Rental Yields

When considering purchasing a rental property, I always focus on three key metrics: gross yield, property appreciation, and net yield.

Now, when it comes to net yield, someone always wants a piece of your pie—the Italian government, which I’ll get to shortly when we talk about taxes.

Here’s the kicker: the further you move from the city center, the higher the returns. So, if you’re dreaming of that trophy asset—let's say a penthouse with a stunning view of the Duomo—you'll have to settle for lower yields.

Then there's the second kind of income—what I call "virtual" income—property appreciation. I say virtual because, as I've mentioned, I’m not here for the quick flip. That's not my game.

But for those who are, there’s a nice little perk: you don’t pay capital gains tax if you sell a property you’ve owned for at least five years, as a private individual.

Mortgage and Financing Options

Now, let’s dive into the world of banking and finance.

Brace yourself, because Italy’s banking system is about as modern as a flip phone. The concept of a credit score? Doesn’t exist.

If you’re incredibly patient and love moving at the speed of a snail, I recommend approaching the banking system only after you’ve got a prequalification in hand. Where should you go for that? Try Auxilia Finance [1], a broker 100% owned by FIAIP (the largest association of Italian real estate agents), which offers free prequalification services.

Your perfect investment property awaits. Let our team help you secure high-demand real estate in Milan’s booming market!

Taxes for Landlords

Now, here comes your silent partner—the Italian government—ready to take its cut of your earnings.

I’ve covered all the types of taxes extensively in this article. But let’s focus here on the income-related taxes that landlords have to deal with.

About 90% of my clients (myself included) opt for cedolare secca. This is a flat tax of 21%, which replaces the standard IRPEF (Italian personal income tax). The IRPEF, by the way, is only beneficial in very rare cases—so “cedolare secca” is the way to go.

Heads up! If you own more than one property and rent them out via short-term contracts, your first property will be taxed at 21%, but from the second property onwards, the rate jumps to 26%. The Agenzia delle Entrate clarified this in their 2024 statement [2].

Contracts and Rental Agreements

Rental contracts in Italy come in many flavors, depending on what you're looking for:

• 4+4 years: free market rent
• 3+2 years: rent agreement with a set rate
• 1–18 months: short-term rent with a set rate
• 6 months – 3 years: student rentals
• Free duration and rent: for corporate leases or tourist use
• Luxury homes (A/1, A/8, A/9): free duration and rent

Personally, in Milan, I go for the long-term contracts (4+4 years), but they require careful attention. I recommend getting legal help to draft them properly.

Here are some pro tips for renting out your property:

• Choose the proper contract: Avoid bureaucratic and tax nightmares.
• Screen your tenants like a detective. Ask for references and a few months' rent upfront—better safe than sorry!
• Document everything with a detailed inventory and photos.
• Include an escape clause, just in case.
• Don’t forget insurance.

And one last thing: financial reliability is crucial in Italy. Legal action for unpaid rent can drag on for ages, so trust me, prevention is everything!

Elena Manzhos: Mother of two beautiful children, wife, and real estate agent for over 15 years. More than 20 years ago,  I moved to Italy from Eastern Europe. I have always had a deep-seated passion for houses; as a child for the Barbie house, and now as a real estate professional, my love for luxurious properties is unwavering.
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