Investing in a second home: cities or vacation spots?

In recent years, real estate investment has reconfirmed itself as one of the pillars of many Italian families’ wealth strategy. Whether it is an emotional choice or a strategy to diversify one’s real estate portfolio, the question many are asking remains the same: is it better to buy in the city or opt for a resort?
Let’s find out the differences between the two solutions to make the best choice.

Investing in a second home in the city: stability and constant returns

Buying a second home in a large city such as Milan, Rome, Genoa or Turin can be an advantageous choice for those seeking stability and a steady income.

Urban areas, especially those that are central or well-connected by public transportation, enjoy constant housing demand. With the growing phenomenon of hybrid work, university or professional-driven cities have seen an increase in demand for short and medium-long leases from students, off-site workers and business tourists.

In addition, investing in cities allows for management flexibility: renting for the long term provides regular income, while short leases-which are increasingly tightly regulated but still beneficial-allow higher returns during periods of high demand.

 

The benefits of investing in the city

Constant returns

Residential rentals provide a steady and often predictable return over time. Demand for city housing is at an all-time high, fueled by students, off-site workers and young couples.

Value growth over time

Cities are subject to changing urban dynamics. A neighborhood that is undervalued today can become one of the most sought-after areas within a few years, thanks toù urban regeneration projects. This allows for a major revaluation of the property purchased.

Easier costs and bureaucracy

Renting for the long term requires less management effort than short term renting: less tenant turnover, more diluted maintenance costs, and more streamlined paperwork.

Some disadvantages

Real estate in the city requires more investment. Entry prices can be high, taxation is potentially higher in some urban areas, and there is definitely strong competition in the market.

Investing in a second home in resorts: charm, personal use and seasonality

Investing in a second home in a seaside, mountain or country resort is a dream shared by many. Popular destinations include the Ligurian Riviera, the Amalfi Coast, the Dolomites, Sardinia and Puglia. In addition to the emotional aspect, investing in a tourist property can prove to be a profitable venture, especially if well planned.
A vacation home can be a source of personal pleasure, but also an excellent source of seasonal income. Short-rental platforms have revolutionized the way these properties are rented, making it possible to remotely manage rentals and intercept year-round travelers.
Returns may be less consistent, depending on the tourist season and online promotion of the property. However, the ability to personally use the home, remain very strong elements in the choice.

The benefits of vacation resort investment

Short-rental income

Holiday resorts are ideal for those who want to enter the short-rental market, thanks in part to portals that have made it easier to put a house up for income during peak season, with very favorable rates. If well managed, tourist rentals can generate a higher annual income than a traditional city rental.

Personal use and quality of life

A vacation home also allows direct use by the owner. This aspect has great value, especially for families who like to have a focal point for vacations and to have an escape from urban chaos. In addition, with a view to smart working, many resorts are becoming ideal places to work remotely, increasing their appeal even out of season.

Tourist reappraisal

In some areas of Italy, growing interest from foreign tourists has caused demand for real estate to soar. Investing in emerging and trendy destinations today may prove to be a forward-looking move.

Some disadvantages

Before buying a second home, it is essential to assess the fiscal impact. The second home does not enjoy first home benefits and involves higher taxes (IMU, TARI), both in cities and in tourist locations. In addition, in the case of short term rentals, it is essential to take into account local regulations, registration requirements, and rental taxes (dry coupon or ordinary taxation).
Management may require a more active presence to manage the property: check-in and check-out, cleaning, frequent maintenance.

The middle ground: suburbs and secondary cities

In recent years, a third option, combining elements of both choices, has also gained ground: suburbs and medium-sized cities. Places like Lucca, Lecce, Orvieto, Trento or Catania offer more affordable prices than large cities, but at the same time good tourist potential and high quality of life.
These places represent an interesting niche for those who want to invest off the beaten track but still profitable.

Conclusion: city or vacation spots?

The choice between city and resort depends on personal and financial goals. If you are looking for a stable income with simplified management and a less risky investment in the medium to long term, the city, secondary towns or villages are the best choice. If, on the other hand, you want a mix of personal use and high seasonal profitability, a home in a vacation resort can offer great satisfaction.

Our advice is to rely on professionals in the field to analyze the market, assess actual costs, and choose the option that best fits your profile. A well-planned investment, whether in the city, by the sea or in the mountains, can provide significant asset enhancement and an additional source of income over time.
We offer personalized consultations, a wide network of properties throughout Italy and help you find the solution that’s right for you, whether it’s under city lights or immersed in the quiet of nature.