Not only Rome and Milan: as much as the two capitals enjoy the leading real estate investment markets in Italy, interesting yield opportunities also exist for those who identify housing as the best solution for allocating financial resources in other cities. The proptech company Locare carried out an analysis by calculating the average gross profitability for one year generated by renting a three-room apartment in Naples, Turin, Palermo, Genoa, Bologna, Florence and Bari. Here are the results.
The research considers the status of the solutions examined from the habitable upwards. These are furnished flats or houses and range in size from 60 to 96 square metres. Moreover, the reference rental contract is the classic 4+4 free rent. Considering a budget set for the purchase of the home that differs according to the city, taking as a starting point an availability of €120,000 up to a budget of €250,000 for the most expensive cities, the average yield of the second home purchased and rented is as follows for the different Italian cities.
Naples
In Naples, the average value of a square metre with the declared characteristics is around €3,028.3. With a budget of €250,000 it is therefore possible to buy a three-room apartment of 83 square metres. Under Vesuvius, the average rent for the same type of flat is around €158.28 per square metre per year. One year's rent costs about €13,137.24, so the owner's gross annual yield is around 5.25 per cent.
Turin
In Piedmont, in Turin, the average price per square metre of a flat with the defined characteristics is approximately €2,013.4. With a budget of €200,000 it is therefore possible to buy a 95 square metre three-room apartment. The average rent is about €120 per square metre or €11,400 per annum, thus a gross yield of 5.7 per cent per annum.
Palermo
In Palermo, the average price of a residential square metre is €1,438.5. With a budget of €120,000 it is therefore possible to invest in a 69.5 square metre flat. An average of €99 per square metre per year is needed to live in Palermo. To live in our typical flat, we therefore need €8,258.6 per square metre per year, which corresponds to a gross annual yield for the owner of 6.88%.
Genova
The cost of a house in the Ligurian capital is approximately €1,642 per square metre. With a budget of €150,000 it is possible to buy a 91 square metre flat. The average cost of rent in Genova is about €98.4 per square metre per year. The one-year rent for the three-room apartment considered is €8,954.4 per square metre, while the return on investment is 5.9 per cent before taxes and other costs.
Bologna
In the shadow of the Grisenda and Asinelli towers, the cost of a square metre with the described characteristics averages €3,555. With a budget of 250,000 euro, it is possible to buy a three-room apartment of 70 square metres in Bologna. The return for the investor is 5.8 percent gross per year, on the basis of an average rent of €207.6 per square metre per year and thus a total annual rental cost of €14,532.
Florence
An average of €4,201 per square metre is needed to buy a house in Florence. With a budget of €250,000, it is therefore possible to invest in a small three-room apartment (or large two-room apartment) of €59.5 per square metre. The average rent in the city is €268.8 per square metre per year. Renting the small house in question thus entails an annual expenditure of €15,993 per year and thus a gross return on investment of 6.4%.
Bari
In Bari, the average price per square metre is €1,925. With a budget of €150,000 one can therefore buy a three-room apartment of 78 square metres. The average rent in the city is €123.6 per square metre per year. One year's rent for the flat in question is therefore worth €9,640.8 and, therefore, the average annual gross return on the investment is 6.4%.
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