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From a beautiful area with access to Rome to an exciting university town, here are Italy's best places for investing in real estate

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  • Two experts shared the locations in Italy that investors should consider for their next property.
  • One suggested avoiding the north of Italy and going south for better bargains.
  • Generally speaking, the outskirts of big cities are also profitable.

Real estate remains an appealing asset class for investors in pandemic.

In Italy, your monthly rental income can sometimes fully offset the expenses associated with your mortgage — and your return can be bigger than investing in financial assets. 

Investors in property that needs renovation, including energy or earthquake redevelopment works, can take advantage of the “super bonus,” which provides 110% of the required funds if you are registered to the Registry of Italians Resident Abroad (A.I.R.E.).

Italy isn’t the cheapest country in which to shop for property, but you can still find good value for money compared to other destinations. The basic principles of the real estate business are always the same: the location can make all the difference in providing the best return on investment.

We discussed some of the best places to invest in real estate with Vincenzo de Tommaso, managing director of the research office at Idealista, a tech platform for the real estate market.

When choosing an area, de Tommaso recommends looking at the the average cap rate, which is calculated by taking the potential rental income divided by the purchase price.

“Generally speaking, investing in the outskirts of the big cities is profitable. In Milano, for example, you might have a cap rate of 8.3 instead of the 5 you find downtown,” he said. “In Quarto Oggiaro, which was considered a bad neighborhood but is changing a lot, you can have a cap rate of 12. The same is happening in Bologna, where in Borgo Panigale the cap rate is 8, compared to the 4.9 downtown.”

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

“Ferrara has a university and is highly dynamic. Bergamo has the airport of Orio al Serio, Torino has a lower price but is at a crossroad between France and Italy,” he said. “Another valuable place is Latina and its province. Near to the beautiful Sperlonga and Ponza Isle and also Rome, is very cheap now.”

He also points to Trapani, Perugia, and Lecce as interesting places to watch. When looking in the country, he advises avoiding expensive Chianti.

“The area around Viterbo is better, and so are the Cilento, near Salerno, and Colli Euganei, Padova,” he said, citing rising values due to regeneration projects and the opening of new services, parks, and public transport networks.

“Due to the pandemic, many people are searching for upper floors and light flats,” he said. “The presence of a community is also very important and can make the difference between a place that is livable or not.”

Looking again at cap rate, Federica Tordi, communication manager for real estate web portal Immobiliare.it suggests Genova, Bari, and Naples as places with strong numbers — and urges searching southward.

“Northern Italy tends to be the most expensive part of the country, and the further south you go, the lower the house prices are,” Tordi said. “Abruzzo and especially Molise and also Gargano in Puglia are full of bargains and are beautiful places for a wonderful vacation.”

If you don’t buy in the hinterlands at a low price, you can at least count on earning higher rents in the cities if you rent your property to tenants.

“If you want to make an investment for yourself, you have to think long term,” Tordi said. “Real estate was resilient even in the pandemic.”

Median home sale price and rental revenue in Italy

For an overall look at the wider trends in Italy, see the below figures from Immobiliare.it data:

Milano

Median home sale price: €4,474 /m2
Median annual gross rental revenue: €12,000 
Cap rate: 5.2%

Roma 

Median home sale price: €3,026 /m2
Median annual gross rental revenue: €9,600
Cap rate: 4.8%

Genova

Median home sale price: €1,338 /m2
Median annual gross rental revenue: €6,000 
Cap rate: 5.4%

Napoli

Median home sale price: €2,381 /m2
Median annual gross rental revenue: €9,000 
Cap rate: 5.2%

Bologna

Median home sale price: €2,968 /m2
Median annual gross rental revenue: €9,360 
Cap rate: 5.9%

Torino

Median home sale price €1,655 /m2
Median annual gross rental revenue: €5,976
Cap rate: 4.5%

Bari

Median home sale price: €1,800 /m2
Median annual gross rental revenue: €7,800 
Cap rate: 5.9%

Firenze

Median home sale price: €3,818 /m2
Median annual gross rental revenue: €10,200
Cap rate: 5.8%

Venezia

Median home sale price: €2,429 /m2
Median annual gross rental revenue: €9,000
Cap rate: 4.4%