Authored by the expert who managed and guided the team behind the Italy Property Pack
Everything you need to know before buying real estate is included in our Italy Property Pack
If you're considering buying property in Italy to rent it out, understanding rental yields is essential to making a smart investment.
Italy's real estate market varies dramatically from Milan to Palermo, and so do the returns you can expect.
We constantly update this blog post with the latest data and market conditions across Italian cities.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Italy.
Insights
- Italy's average gross rental yield of around 7.2% in early 2026 is more than double the 10-year government bond yield, making property significantly more attractive than low-risk alternatives.
- The gap between gross and net yields in Italy typically runs 2.5 percentage points due to cedolare secca flat tax, IMU property tax, and condominium fees.
- Milan's prime neighborhoods like Brera and CityLife deliver gross yields of 3% to 4%, while peripheral areas like Bicocca reach 5% to 6%, showing a 2x spread within one city.
- Studios and small one-bedrooms in Italian university towns outperform larger units by 1.5 to 3 percentage points in gross yield due to higher rent per square meter.
- Italy's operational vacancy rate sits between 5% and 7% nationally, but drops to 2% to 4% in high-demand student zones like Milan's Bicocca or Bologna's San Donato.
- The Milan Olympic Village conversion post-2026 will add significant student housing, potentially boosting rents in Porta Romana and Corvetto.
- Landlords using cedolare secca trade rent indexation rights for tax simplicity, which can limit long-term income growth during inflation.
- Secondary cities like Turin and Palermo offer gross yields of 6% to 9%, nearly double what investors find in Rome's Centro Storico or Florence's Duomo area.
What are the rental yields in Italy as of 2026?
What's the average gross rental yield in Italy as of 2026?
As of early 2026, the average gross rental yield across Italy's residential market sits at approximately 7.2%, meaning investors typically collect around 700 euros in annual rent for every 10,000 euros of property value.
The realistic range spans from about 5.5% to 8.5% gross, with variation reflecting Italy's diverse markets from expensive Milan apartments to affordable units in southern cities.
Italy's national average compares favorably to many Western European countries because property prices outside major cities remain relatively affordable while rental demand stays strong.
The single most important factor driving gross yields right now is the price gap between prime city centers and emerging neighborhoods, where purchase prices are lower but rental demand from students and young professionals remains robust.
What's the average net rental yield in Italy as of 2026?
As of early 2026, the average net rental yield in Italy lands at approximately 4.7%, representing what landlords keep after taxes, fees, and operating costs.
The typical gap between gross and net yields runs 2 to 3 percentage points, meaning landlords should expect to lose roughly 30% to 40% of gross income to expenses.
The expense that most significantly reduces gross yield is taxation, particularly the choice between cedolare secca flat-tax (which limits rent increases) and ordinary taxation combined with IMU for non-primary residences.
Net yields across standard Italian investment properties span from about 3.2% to 6%, varying based on your tax situation, the municipality's IMU rate, and condominium charges.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Italy.
We made this infographic to show you how property prices in Italy compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What yield is considered "good" in Italy in 2026?
In Italy's 2026 market, a gross yield above 8.5% or net yield above 6% is generally considered "good" by local investors, providing a meaningful premium over safer alternatives like government bonds.
The threshold separating average from high performers falls around 7% gross, since Italy's 10-year bond yields around 3.5%, and investors want at least double that to justify the extra work of owning rental property.
How much do yields vary by neighborhood in Italy as of 2026?
As of early 2026, the spread in gross yields between Italy's highest and lowest-yield neighborhoods reaches 4 to 5 percentage points, meaning some areas deliver nearly double the return of others within the same city.
The highest yields appear in working-class neighborhoods with good transit and steady renter demand, such as Barriera di Milano in Turin, Tor Pignattara in Rome, or Bolognina in Bologna.
The lowest yields concentrate in prestige districts where prices reflect scarcity and status rather than income potential, including Milan's Brera and CityLife, Rome's Parioli, and Florence's Duomo area.
Yields vary so dramatically because property prices in prime areas are driven by emotional factors, while rents face practical limits based on tenant budgets.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Italy.
How much do yields vary by property type in Italy as of 2026?
As of early 2026, gross yields across property types range from about 4% for detached villas up to 8% or more for small apartments, a spread of 3 to 4 percentage points.
Studios and compact one-bedrooms deliver the highest yields, especially in university cities where young renters create intense demand for affordable small units.
Detached houses and large villas produce the lowest yields because their high prices and maintenance costs aren't matched by proportionally higher rents, plus they face longer vacancies.
Yields differ because small apartments command premium rent per square meter while purchase prices per square meter stay closer to the average, creating a mathematical advantage for compact units.
By the way, you might want to read the following:
What's the typical vacancy rate in Italy as of 2026?
As of early 2026, the typical operational vacancy rate for Italian rental properties averages 5% to 7%, translating to roughly 3 to 4 weeks empty per year for a well-located apartment.
Vacancy ranges from 2% to 4% in high-demand student and employment zones, up to 8% to 10% in oversupplied areas or towns with weaker fundamentals.
The main factor driving vacancy rates is intense rental pressure in major urban centers, where jobs, universities, and in-migration create more tenant demand than available supply.
Italy's vacancy rate compares favorably to many European markets, though official "vacant dwelling" statistics include second homes, making national figures appear higher than what rental investors experience.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Italy.
What's the rent-to-price ratio in Italy as of 2026?
As of early 2026, the average rent-to-price ratio in Italy sits at approximately 0.6% per month, meaning a 100,000 euro property typically generates around 600 euros monthly before expenses.
A ratio above 0.7% monthly (8.4% annually) is generally favorable for buy-to-let investors, directly translating to a gross yield that exceeds the bond benchmark and leaves room for costs.
Italy's ratio compares well to northern European capitals like Paris or Munich (often below 0.4%), though it trails some eastern European markets where prices remain lower relative to rents.
We have made this infographic to give you a quick and clear snapshot of the property market in Italy. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which neighborhoods and micro-areas in Italy give the best yields as of 2026?
Where are the highest-yield areas in Italy as of 2026?
As of early 2026, the highest-yield neighborhoods include Barriera di Milano and Aurora in Turin, Gianturco in Naples, and Sampierdarena in Genoa, combining affordable prices with steady working-class and student demand.
These areas typically deliver gross yields of 7% to 9%, with some properties in Turin's Barriera di Milano or Palermo's Oreto-Stazione pushing past 9%.
These high-yield Italian neighborhoods share proximity to employment hubs, universities, or transit connections, combined with prices well below city averages due to lacking prestige appeal.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Italy.
Where are the lowest-yield areas in Italy as of 2026?
As of early 2026, the lowest-yield neighborhoods are prestigious historic cores including Milan's Brera and Quadrilatero della Moda, Rome's Parioli and Centro Storico, and Florence's Duomo area.
These premium neighborhoods deliver gross yields of just 3% to 4.5%, sometimes lower for trophy properties where buyers pay significant premiums for address prestige.
Yields are compressed because purchase prices reflect scarcity, heritage value, and emotional appeal rather than income potential, while rents face practical limits based on what tenants will pay.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Italy.
Which areas have the lowest vacancy in Italy as of 2026?
As of early 2026, the lowest vacancy neighborhoods are student-heavy areas like Milan's Bicocca and Città Studi, Bologna's San Donato, and hospital zones like Rome's Policlinico area.
These neighborhoods experience vacancy rates of just 2% to 4%, with apartments often sitting empty for less than two weeks between tenants.
The main driver keeping vacancy low is large institutions (universities, hospitals, business districts) creating a constant flow of tenants who need nearby housing with limited alternatives.
The trade-off is that security of consistent occupancy often comes with slightly compressed yields, since steady demand also pushes purchase prices higher relative to rents.
Which areas have the most renter demand in Italy right now?
The strongest renter demand is in Milan's Isola, Porta Romana, and Lambrate, Rome's San Lorenzo and Pigneto, and Bologna's Bolognina, all combining good transit with relative affordability.
The typical renter profile is young professionals aged 25 to 40 in tech, creative industries, or services, plus university students who prioritize urban connectivity over space.
Listings in these neighborhoods typically fill within one to two weeks, with well-priced apartments in Milan's Isola sometimes receiving multiple applications within days.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Italy.
Which upcoming projects could boost rents and rental yields in Italy as of 2026?
As of early 2026, the top projects expected to boost rents are the Milan Olympic Village conversion into student housing, the MIND Milano Innovation District, and Rome's Metro Line C extension.
Neighborhoods likely to benefit include Milan's Porta Romana and Corvetto (Olympic Village spillover), Rho-Fiera and Cascina Merlata (MIND proximity), and Rome's Piazza Venezia corridor (new metro access).
Investors can realistically expect rent increases of 5% to 15% in affected neighborhoods once projects complete, with largest gains in previously underserved areas gaining new transit or employment anchors.
You'll find our latest property market analysis about Italy here.
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What property type should I buy for renting in Italy as of 2026?
Between studios and larger units in Italy, which performs best in 2026?
As of early 2026, studios and small one-bedrooms outperform larger units on both yield and occupancy speed, thanks to strong demand from students, young professionals, and singles who prioritize location over space.
Studios in good locations deliver gross yields of 7% to 9% (700 to 900 euros per 10,000 invested, or 760 to 980 USD), while larger apartments usually yield 5% to 7% (500 to 700 euros, or 540 to 760 USD).
Italian renters pay a significant premium per square meter for small, well-located units, while purchase prices don't rise as steeply, creating better yield math for compact apartments.
However, larger units become better when targeting families or professional couples seeking multi-year leases, offering lower turnover costs and more stable occupancy despite lower headline yield.
What property types are in most demand in Italy as of 2026?
As of early 2026, the most in-demand property type is the functional two-bedroom apartment in a transit-connected neighborhood, hitting the sweet spot between affordability and livability for the largest renter pool.
The top three types by tenant demand are: two-bedroom apartments (couples and flatshares); studios and one-bedrooms (students and singles); and energy-efficient units of any size (tenants prioritize lower utility bills).
The primary trend driving this pattern is Italy's shift toward smaller households and urban concentration, with more people living alone, fewer having children, and more prioritizing city-center jobs.
Detached villas in non-commuter locations are underperforming and likely to remain so, requiring tenants with cars, higher budgets, and suburban preferences that fewer young Italians share.
What unit size has the best yield per m² in Italy as of 2026?
As of early 2026, units between 30 and 50 square meters deliver the best gross yield per square meter, corresponding to studios and compact one-bedrooms in most Italian markets.
These units generate gross yields of 7% to 9%, translating to roughly 8 to 11 euros monthly per square meter (9 to 12 USD) in well-located urban areas.
Very small units (under 25 square meters) face legal and practical rent limits, while larger apartments (over 80 square meters) see rent per square meter drop as tenants won't pay proportionally more for extra space.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Italy.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Italy versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What costs cut my net yield in Italy as of 2026?
What are typical property taxes and recurring local fees in Italy as of 2026?
As of early 2026, annual IMU property tax for a rental apartment ranges from 500 to 2,000 euros (540 to 2,170 USD) depending on cadastral value and municipal rate, with Milan and Rome at the higher end.
Other recurring fees include registration tax (2% of annual rent under ordinary regime), building management fees, and TARI waste tax if not passed to tenants, adding 300 to 800 euros (325 to 870 USD) yearly.
Combined, these typically represent 10% to 20% of gross rental income, though cedolare secca simplifies taxation at the cost of giving up rent indexation rights.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Italy.
What insurance, maintenance, and annual repair costs should landlords budget in Italy right now?
Annual landlord insurance costs 150 to 400 euros (165 to 435 USD), varying by property size, location, and liability coverage.
Budget approximately 0.5% to 1% of property value for maintenance and repairs, roughly 500 to 2,000 euros (540 to 2,170 USD) annually for a typical 150,000 to 200,000 euro apartment.
The expense catching landlords off guard is extraordinary condominium works (spese straordinarie) like facade restoration or elevator replacement, creating one-time assessments of several thousand euros with little warning.
Total realistic budget for insurance, maintenance, and repairs: 1,000 to 3,000 euros (1,085 to 3,260 USD) annually, with older buildings at the higher end.
Which utilities do landlords typically pay, and what do they cost in Italy right now?
For standard long-term rentals, tenants pay electricity, gas, water, and internet, while landlords cover extraordinary building works and vacancy-period utilities.
When landlords cover vacancy utilities or include services in rent (rare for long-term lets), monthly cost runs 100 to 200 euros (110 to 220 USD) based on ARERA regulated tariffs.
What does full-service property management cost, including leasing, in Italy as of 2026?
As of early 2026, full-service management fees run 8% to 12% of monthly rent, roughly 50 to 150 euros (55 to 165 USD) monthly for a typical 800-euro rental.
Leasing fees are typically one month's rent (600 to 1,200 euros, or 650 to 1,300 USD), though some negotiate lower rates for repeat clients or portfolios.
What's a realistic vacancy buffer in Italy as of 2026?
As of early 2026, landlords should set aside 5% to 8% of annual rental income as vacancy buffer, accounting for gaps between tenants and seasonal slowdowns.
This translates to 3 to 4 weeks vacancy per year for well-located properties, though high-demand zones may see only 1 to 2 weeks while weaker markets should budget 6 to 8 weeks.
Buying real estate in Italy can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses in our property pack about Italy, we rely on the strongest methodology we can and don't throw out numbers at random.
Below we've listed the authoritative sources we used and how we used them.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Agenzia delle Entrate (OMI) - Quotazioni immobiliari | Italy's official property market observatory with standardized zones and semiannual price/rent bands. | We used OMI's zone-based ranges as an official anchor for platform data. We cross-checked implied yields by comparing rent to price per square meter. |
| Agenzia delle Entrate (OMI) - Rapporto Immobiliare 2025 | Official annual report based on administrative archives covering Italy's housing market. | We used it to ground our view of what's common in Italy. We verified yield assumptions fit transaction reality. |
| Agenzia delle Entrate - OMI Overview | Explains what OMI measures and publishes, from the regulator itself. | We used it to justify OMI as a primary dataset. We explained methodology in plain language. |
| Bank of Italy - Housing Market Survey Q3 2025 | Central bank survey tracking market conditions and liquidity nationwide. | We used it to frame early 2026 conditions affecting rents and vacancy. We used it as a macro reality check. |
| ISTAT - Housing Portal | Italy's official statistics agency publishing core housing indicators. | We anchored broader context of price trends. We avoided overfitting to a single platform. |
| ISTAT - FOI Index | Official index for periodic monetary and rent adjustments in Italy. | We explained how rents legally drift over time. We noted rent growth implications. |
| MEF - IMU Rates Framework | Ministry of Economy site describing how IMU rates are set. | We built the net yield tax line item using official rules. We explained municipal variation. |
| Agenzia delle Entrate - Cedolare Secca | Tax authority's official explanation of flat-tax regime for rents. | We modeled net yields under common tax choices. We explained trade-offs. |
| Agenzia delle Entrate - Lease Registration | Official page describing registration costs for rental contracts. | We added realistic admin costs into net yield. We explained cedolare secca differences. |
| Idealista - Profitability Snapshot | Major portal with research desk and transparent rent/price methodology. | We used it as a private-sector benchmark for gross yields. We cross-checked against OMI to avoid listing bias. |
| Global Property Guide - Italy Yields | Long-running international dataset documenting yield computation. | We triangulated city-level yield dispersion. We kept prime versus secondary spreads realistic. |
| Immobiliare.it - 2026 Outlook | Major portal with dedicated analytics publishing structured updates. | We framed early 2026 rent versus price momentum. We supported neighborhood-level discussion. |
| Trading Economics - BTP Yields | Widely used market reference for sovereign yields. | We defined what Italians call a "good" yield versus bonds. We explained risk premia. |
| Nomisma - 2025 Rental Research | Long-established Italian research institute widely cited in housing analysis. | We supported strong renter demand narrative. We used it as a reputable cross-check. |
| OECD - Housing Stock | International organization with standardized housing indicators. | We separated stock vacancy from rental vacancy. We reality-checked vacancy narratives. |
| Milano Cortina 2026 - Olympic Village | Official Olympics site with verified project information. | We identified major projects affecting rents. We explained neighborhood benefits. |
| MIND Milano Innovation District | Official site for Milan's innovation district development. | We identified employment anchors driving demand. We explained rent growth potential. |
| Webuild - Rome Metro C | Major contractor press release with verified contract details. | We identified infrastructure changing Rome's accessibility. We explained rent impact potential. |
| ARERA - Energy Tariffs | Italy's energy regulatory authority publishing official pricing. | We understood baseline utility costs. We estimated landlord vacancy expenses. |
| Savills Italy - Residential Management | Established international property firm with documented Italian operations. | We confirmed management is a mature service category. We set practical fee budget bands. |
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