Italy is one of Europe’s top destinations for both tourists and Expats. With ancient cities full of art, culture and incredible monuments, beautiful rural provinces and a culinary heritage that is hard to beat, the nation is a perennial magnet for tourists and visitors from all over the globe.
For property owners, this means that you can rely on consistent, year-round demand for your rental property in Italy and earn a solid passive income, even while you’re out of the country. Tourists are increasingly keen to stay in private, short-term rental properties instead of hotels and Expats often take up short-term lets while waiting for a property purchase of their own to be completed.
Should You List Your Italian Property On Airbnb?
There are numerous ways to rent out your Italian property but the easiest and most flexible approach is to make use of the Airbnb platform. With more than 80,000 properties that host over 3.5 million guests each year, Italian Airbnb is hugely popular with a very high trust rating. Airbnb allows you to quickly set up an account and get your property, or properties, onto the listings so you can start hosting guests in no time.
One of the big advantages of Airbnb, especially for inexperienced property owners who are just dipping their toes into the rental markets, is that the platform does all the advertising and brings potential guests to you. This saves you from having to search for tenants and gives you the chance to rent your property on a short or medium-term basis.
Airbnb provides a secure platform where you can manage your bookings, safely communicate with potential guests and receive your payments for the rental periods. Essentially, Airbnb is a one-stop shop that provides everything you need to start earning a reliable passive income by renting out your property in Italy.
The Pros Of Listing Your Italian Property On Airbnb.
The following are the major advantages of listing your Italian property on Airbnb:
Higher Income Potential Compared To Longer Term Letting.
Everyone who has rented out a property in Italy knows that rental incomes in Italy are not that high when compared to the investment. When you rent your property for short-term stays you can earn a much higher return per month than if you were renting your property to a long-term tenant. This is very true especially if your property is located near a famous tourist site.
For instance, you may be able to rent your property at a rate of $1000 per month on a long-term basis whereas on Airbnb you could charge as much as $100 per night. This means that if you rented your property every night for a month on Airbnb, you can earn up to $3000 in a single month, which is triple what you could earn if you rented it out on a long-term basis
When you rent your property on Airbnb you have a great deal of flexibility. You can choose exactly when you want to rent out your property during the year. You can, for example, focus on renting out your property during the high tourist seasons in Italy, when higher prices are the norm, to maximize your nightly rental income over a short period of time.
The main tourist season in Italy is primarily during the summer months as well as over the Christmas and Easter holidays. This flexibility can be extremely useful if you plan to stay in your property at certain times of the year but still want to earn a rental income when you’re not there.
You Can Choose Your Own Level Of Day To Day Involvement.
As a host, you can opt to do all the work yourself, from cleaning to washing the sheets, welcoming the guests and managing the bookings on Airbnb. Alternatively, you can opt for a more hands-off approach and pay a third party or a company to oversee the daily tasks that are required to manage your Airbnb property. This is a great option for property owners who don’t live in Italy full-time and need someone to manage their property while they are away.
All Guests Can Be Vetted In Advance.
If you rent directly, vetting potential tenants is an issue in Italy. In the United States, you can perform credit checks, criminal background checks etc. This is somewhat difficult to do in Italy. In Italy it is also not easy to collect rent (if the tenant is behind on payments) or evict a tenant.
It’s not only guests who can review the services of their hosts because on Airbnb hosts can also write reviews of their guests. This allows you to check if a potential guest has caused problems, damaged property or otherwise been a nuisance in a previous property. If you find this to be the case you can simply refuse to accept their booking provided you have turned off the ‘instant booking’ option on your advertisement.
The Future Is Bright For Short-Term Renting On Airbnb.
Airbnb has been growing consistently since it was founded in 2008, particularly in the holiday rental markets in countries such as Italy. Therefore, you can be fairly sure to benefit from an ongoing increase in the demand for short-term holiday rentals in Italy. This trend is compounded by the fact that increasing numbers of visitors to Italy are looking to stay in an authentic property instead of a large chain hotel, fantastic news for you if you’re renting your property on Airbnb.
The Cons Of Listing Your Italian Property On Airbnb.
The following are the major disadvantages of listing your Italian property on Airbnb:
You Have To Pay Fees For The Service.
Airbnb takes a service fee from each one of your guests when they book a stay at your property. This fee usually adds up to around 14-16% of the total booking cost and is taken from the payment automatically.
Equally, if you want a third party, such as a property management agency, to manage the bookings and daily tasks related to renting out your property they will also charge a fee for their services, over and above the Airbnb fees.
You’re Not Guaranteed To Get Bookings.
When you rent your property on Airbnb you aren’t guaranteed to get bookings at all times, unlike if you’re renting your property on a long-term basis. Of course, this is a risk that you will have to take. However, given that the number of bookings depend on the quality of the property, the price per night and your rating as a host, there’s a lot you can do to maximize your chances of attracting a high number of guests. If you are rated as a Superhost, a Plus or Luxe property, then the requests for booking could easily exceed your capacity to house them. NOTE: Airbnb website has a rental calculator that you can use to estimate the potential income from the property.
Things Can Always Go Wrong At Times.
When you’re renting out your property to numerous different guests throughout the year things are bound to go wrong sometimes, no matter how perfect your property and the services you provide.
This means that you may occasionally get an unfair review or a particular guest may be loud and disturb your neighbors. At other times the washing machine might break down unexpectedly, the WiFi could get disconnected due to a storm or there could even be a neighborhood wide power cut one night!
Unfortunately, unforeseen problems come with the territory of short-term rentals and are something you will have to handle on a case-by-case basis, as and when the situation arises. Try to be as responsive to your guest’s concerns as possible and always leave a list of useful contacts in the property that they can call if something unpredictable does go wrong.
The Italian Laws And Tax Regulations.
Italy has quite a complicated system of nationwide rules for short-term property rentals as well as regional regulations that you also need to comply with. It’s very important to remember that individual cities and provinces in Italy have unique regulations that you need to research and become aware of before you start renting out your property on Airbnb.
In my view Airbnb works best if you live on the property that you are renting or very close to the property. If you are remote, then you will be totally dependent on a property management company or other third parties to manage your rental (take care of things like handing over the keys, cleaning the property, doing laundry, resolving plumbing and electrical issues etc.).
Every city and town in Italy will have many companies that manage Airbnb and other short term rental properties. But they are not always reliable and you will end up doing a lot of coordination yourself.
Key Short-Term Property Rentals Regulations In Italy.
No matter where your property is in Italy, you need to comply with the following procedures:
- Firstly, you need to visit the local police headquarters to request an account to access the Alloggiati Web. This is the state police’s national portal through which you must register any guests staying in your property.
- Secondly, you must prepare a written contract that your guests have to sign when they check in to your property.
- Each time a guest stays at your property, you need to submit photos of the guest’s national identification or passport to the Alloggiati Web portal.
Note : You only need to prepare a written contract for your guests if your property is categorized as a ‘furnished tourist apartment’. Therefore, if you are advertising your property as anything else, such as a B&B for example, you don’t need a written contract with your guests.
Taxes In Italy For Short-Term Property Rentals.
The Italian tax codes can be very confusing, even at the best of times! Fortunately, the nationwide taxes relating to short-term property rentals are surprisingly simple. Even so, you should never overlook the regional and city tax regulations which may also apply to you.
Remember too, that your own personal financial situation will always impact your tax situation and if you’re in any doubt it’s worth contacting a tax professional to discuss your particular circumstances in more depth.
Two Main Tax Regulations That Properties Can Fall Under.
The first, ordinary tax scheme is known as the ‘IRPEF’ and is calculated on the basis of your total annual income. This means that any income you get from short-term rentals of your property is simply added to the rest of your income for that year. This total figure is then taxed at a rate of between 23-47%, depending on the income bracket that you fall under. The IRPEF tax regime allows you to claim back deductions that are related to your property, such as renovation costs, Airbnb fees and upgrades to your property’s energy efficiency.
The second tax scheme, known as the ‘Cedolare Secca’, applies to your property if you are operating your rentals as a ‘non-professional host’. The Cedolare Secca scheme only applies to you if you’re a ‘natural person’ who is renting your property. The rate of tax is 21% and only applies to the income you make on your rental property. In other words, you pay this tax separately from your other income which will be taxed at a different rate. The Cedolare Secca rate of tax is lower than the standard rates but it does not allow you to claim any deductions for additional expenses relating to your property, such as AirBnb fees and renovations.
For more information about the tax regulations relating to renting your property in Italy, you can check on the Airbnb Tax Collection and Remittance in Italian Cities section of the official website. You’ll also find a detailed breakdown of the tourist tax and other local regulations for every city and province in this section, which is essential reading for anyone renting a property in Italy.
Ensuring The Safety Of Your Guests.
It’s important that you, as a host on Airbnb, take reasonable steps to ensure the general safety and well-being of your guests while they are staying in your property. There are a number of basic things that you should do to fulfill your obligations as a responsible host, including, but not limited to, the following:
Provide A List Of Emergency Contacts.
You should always have a list of emergency contacts in your property that your guests can refer to if they are experiencing difficulties or facing an emergency situation.
It’s always a good idea to have an up-to-date First Aid Kit in the property which your guests can use in a minor emergency. You should also make sure to regularly check the First Aid Kit and restock any supplies, such as bandages or disinfectant, that are running low. Don’t forget to tell your guests where the First Aid Kit is kept!
Fire Prevention And Safety.
It’s a critical part of being a good host to ensure that your property is compliant with all local fire prevention and safety codes. If you have any type of gas appliances in your property, such as a gas fire or cooker, then you need to install carbon monoxide detectors and have a fire extinguisher in an easily accessible place in the kitchen.
Additionally, you should make sure you have a clearly marked fire escape route in case of emergency and a map of the exit route for your guests to view. You can put the map of the exit route on the kitchen wall or in a kitchen drawer. Once again, don’t forget to advise your guests where the map is and what the best route out of the property is if there is a fire.
Preventing Future Hazards.
There are many things that you can do to prevent potential hazards and dangerous situations for your guests. At the minimum, you should:
Arrange for your property to be regularly inspected by a professional to check the electrical circuits, fix exposed wires and minimize any electrical fire risks. It’s also a good idea to provide guests with plug adapters they can use if they have devices that are not compatible with the Italian electrical sockets.
Ensure that any stairways in your property have safety railings and are safe to traverse.
Don’t leave objects that could put your guests, particularly children, at risk. If you do have potentially dangerous objects, such as an ax to cut wood, in the property then make sure it’s kept in a place that children can’t access, preferably under lock and key so only adults can use it.
Air Conditioning And Heating Systems.
Climate control will make your guest’s stay in your property much more pleasant but you should ensure that you leave clear instructions on the safe way to use these appliances. This includes gas fires, open log fires, air conditioners and other climate control systems. You also have a responsibility to regularly service any appliances in your property to ensure that they are up to the latest health and safety standards.
It’s something that is often overlooked but sometimes foreign visitors to Italy may not fully understand some of the local customs. If you feel it’s appropriate, you can help your guests to better understand the local traditions and customs. For instance, you could leave a note that lets your guests know they are usually expected to dress modestly when visiting local churches, religious spaces and museums in general.
Renting Your Property With Airbnb Is Both Convenient And Profitable.
Airbnb really takes the headache out of managing a short-term rental property. Not only will the platform make it easy to find guests but it also provides you with a safe way to communicate with your guests and receive the correct payments. The fees on the platform are very reasonable and the potential financial rewards are very high, particularly if you have a unique property in an area that is popular with tourists and visitors.