Will you rent the property, or just use it yourself?

One of the most important early decisions when buying property in Italy is how you plan to use it. Is this primarily a place for you and your family to enjoy, or are you hoping the property will also generate rental income? 

Many buyers aim for a mix of both — a personal retreat that can be rented when they are not using it — but if rental income is part of the plan there are several additional factors you need to carefully consider.

The first question is what type of rental you are aiming for: short-term (holiday/vacation) rental or longer-term residential rental. These two approaches lead to very different choices in terms of location, property type, and expected returns.

If you are considering short-term rental — perhaps combined with personal use — there are several key things worth investigating before you commit to a purchase.

Demand
Start by understanding the demand for short-term rentals in the areas you are considering. One of the easiest ways to do this is to review the number of vacation properties listed in the immediate area. Look at platforms such as Airbnb or Booking.com and see how many options are available and at what price levels. If there are plenty of properties renting at healthy rates, that is generally a positive sign.

Take the time to open a selection of listings similar to the type of property you are considering. Look at their calendars to see how far ahead they are booked and how full their schedules appear to be. Try making an enquiry and see if the host offers you a substantial discount to secure a booking — this can sometimes indicate weaker demand.

Airbnb also provides some area statistics for registered hosts, including average occupancy rates. These can be useful but should be treated with caution, as blocked dates for personal use can appear as "booked." It is also worth checking whether the area hosts any large annual events or seasonal festivals that bring additional visitors.

Tax
Short-term rental income in Italy is subject to a withholding style of tax which is deducted at source by booking platforms such as Airbnb or Booking.com. This tax is applied to the gross rental income, before platform fees, cleaning costs, or other expenses.

For the first property the rate is typically 21%, increasing to 26% if you own multiple rental properties. Because the tax is applied to gross revenue rather than profit, it is important to factor this into your expected returns.

Transport
Transport access is another critical consideration if you intend to host guests. Ask yourself how visitors will realistically reach your property. If the home is not within easy walking distance of a train station or reliable bus route, you should assume most guests will need to arrive by car.

That raises two further questions. First, will having a car requirement significantly limit your potential guest pool? And second, where will guests park? In many towns and villages parking can be limited, so a clear and convenient solution is important. Looking ahead, you may also need to consider the ability for guests to charge electric vehicles, which is becoming increasingly expected.

Connectivity
Many property advertisements claim proximity to an "international airport," but in reality these are sometimes small regional airports with limited and expensive flight options. If your guests are coming from overseas, the property should ideally be within reasonable distance of a well-connected airport with regular flights from major European and international hubs.

Facilities and local life
Guests want more than just a nice property — they want a place where they can enjoy the local lifestyle. Restaurants, cafés, bars, bakeries, and small food shops all contribute to the experience.

If the property is in a town or village setting, most visitors appreciate being able to walk to dinner or drinks in the evening. If you assume that some guests may not have a car, these amenities should ideally be within easy walking distance. In more rural settings the expectations are different, but even there access to good local food and experiences matters.

By this point you should start to have a clearer idea of what sort of property and location might suit your goals. A useful tip is to write down a list of the things that matter most to you, then rank them by priority. Mark the items that are non-negotiable, and the ones where you are prepared to be flexible. Having this clarity early on will make the property search far more focused — and far more successful.

Long-Term Residential Rental in Italy – The Pros and Cons

Some buyers consider purchasing property in Italy not just for personal use or holiday rentals, but as a longer-term residential rental investment. This typically involves leasing the property to a tenant on a multi-year contract rather than offering short-term stays to tourists. Like any investment strategy, it has both advantages and drawbacks, and it is important to understand these before deciding if it suits your goals.

One of the main advantages of long-term rental is stability. Once you have secured a good tenant on a standard residential lease, you can expect a relatively steady stream of income without the constant management that comes with short-term holiday rentals. There are no weekly guest turnovers, cleaning schedules, marketing on booking platforms, or the need to manage reviews and guest enquiries. For owners who prefer a more passive investment, this simplicity can be appealing.

Long-term rentals also tend to have lower ongoing operating costs. You generally won't need to furnish the property to a high holiday-rental standard, and you won't be covering utilities, cleaning, linen services, or guest management. In many cases, tenants take responsibility for day-to-day living costs such as electricity, gas, and internet. This can make the financial side of the investment more predictable.

However, the trade-off is that returns are usually lower than short-term vacation rentals in popular tourist areas. Residential rents in many parts of Italy are relatively modest compared to property values, particularly in smaller towns or rural locations. While the income may be steady, it may not produce the same level of return that a well-run holiday rental can achieve in a strong tourist market.

Another important factor is tenancy law and flexibility. Italy has well-established tenant protections, and standard residential leases often run for several years. This means that once a tenant is in place, it may be difficult to regain possession of the property quickly if your circumstances change or if you decide you would prefer to use the property yourself. Eviction processes can also take time if problems arise, so careful tenant selection is important.

Location plays a major role in whether a long-term rental strategy works. Properties near major employment centres, universities, or larger cities tend to have stronger demand from residents. In contrast, homes in small villages or purely tourist areas may be much harder to rent on a permanent basis, particularly outside the peak travel seasons.

For some buyers, long-term rental works well as part of a broader plan — perhaps providing stable income while holding the property as a long-term investment, or while waiting for the right time to renovate or move to Italy themselves. For others, it may simply not generate the returns or flexibility they are hoping for.

As with most property decisions, the key is to be clear about your objectives from the start. If steady income and lower day-to-day involvement appeal to you, long-term residential rental can be a sensible option. If your goals are higher income potential or personal use of the property throughout the year, short term letting may be more suitable for you.