Investing in Real Estate in Modena: A Complete Guide to Capitalizing on a Booming Market

Published on April 27, 2026 and written by Cyril Jarnias

Modena is no longer just the city of Maserati, aged balsamic vinegar, and the university. In recent years, this industrial and cultural capital of Emilia-Romagna has established itself as one of the most dynamic real estate markets in northern Italy, with a return/security combination that’s hard to beat.

A Favorable Italian Context… and a Local Market Ahead of the Curve

Italy is entering 2026 in a phase of real estate maturity: moderate price growth, increased investor selectivity, growing importance of energy efficiency, and also lower interest rates and the return of capital, especially foreign. In 2025, real estate investments in the country reached €12.5 billion, up about 23% year-on-year, with 58% of capital coming from abroad. National residential prices are rising around 3–4% per year, with a forecast of about 4.2% for 2026.

Residential transactions rebounded strongly: 2,596 sales recorded in the municipality in 2025, an increase of about +14.5%. The average discount between asking price and final price contracted to 10.5% (down from 12% previously), a level not seen since 2009. In other words: demand is there, negotiation still exists, but market power is clearly shifting toward sellers of quality properties.

Why Modena Attracts Real Estate Investors

Several structural factors explain the growing appeal of Modena for investors, whether Italian or foreign.

First, economic strength. The area has a strong propensity for exports (nearly 60% of value added), a diversified industrial fabric with global leaders in the automotive sector, and a growing services sector. After a slight decline in manufacturing output in 2024, forecasts point to a return of industrial growth (around +1.1–1.3% per year by 2026), an increase in household disposable income, and very low unemployment (around 4.4–4.7%).

Finally, the public investment dynamic. The “Next Generation Modena” program, backed by the PNRR (National Recovery and Resilience Plan), funds major projects: sustainable mobility (OPTI‑UP plan, future Bus Rapid Transit network, bus fleet renewal, first hydrogen bus), “Hydrogen Valley of Modena” project, industrial expansion of the CPC Group (€350 million in investments, 500 hires planned), and infrastructure modernization. The 2026‑2028 municipal budget also allocates a large portion of its annual €438.8 million to social cohesion, security, and maintenance of the built heritage.

Prices and Yields: What Does an Apartment in Modena Return?

One of Modena’s main strengths is the combination of still reasonable prices for a highly sought-after northern Italian city and rents pushed upward by limited supply and multifaceted demand (students, doctors, engineers, managers from industrial groups, local families).

Average Prices and Recent Trends

Between end of 2023 and end of 2025, prices increased both in the municipality and the province:

Within Modena itself, heterogeneity is strong. A snapshot from November 2025 shows:

The city center is, logically, the most expensive, but even in the historic heart, prices remain well below those of Bologna (≈ €3,650/m²), Florence (≈ €4,500/m²), or Milan (over €4,100/m² on average and more than €5,700/m² in the historic center).

Yields by Property Type

The average figures for the municipality of Modena clearly illustrate the appeal of traditional rental investment (long-term lease):

Using the average apartment (€265,000 / €1,100 rent) as a benchmark, we get a theoretical payback of about 20.1 years. In practice, after expenses (condo fees, maintenance, local taxes, insurance) and taxes (notably the cedolare secca at 21% on rents), the net yield is more like 3.2% to 4.5% depending on the type of property, its age, and location.

Neighborhood Mapping: Where to Buy in Modena?

Modena offers a range of neighborhoods with very different profiles: historic heritage center, very green upscale districts, well‑served emerging areas, and peri‑urban fractions linked to the hospital or industrial hubs. For an investor, the challenge is not to find “the best neighborhood in absolute terms,” but the one that matches their strategy: maximum yield, potential capital gains, or wealth preservation.

Centro Storico: Prestige, Rarity, and Tourist Potential

The historic heart, with the Duomo, the Torre Civica (Ghirlandina), and Piazza Grande listed as UNESCO World Heritage, is considered one of the most pleasant and sought‑after areas of the city. It features old palaces, frescoed ceilings, inner courtyards, and direct views of the monuments. The architecture is very refined, the environment safe, and the population density high.

Prices are logically higher than the rest of the city: around €2,912 to over €3,000/m² depending on sources, with significant gaps between old buildings needing renovation and new or fully refurbished apartments (up to €4,000/m² for new).

This sector is particularly suitable for:

– high‑end primary residences (for executives, professionals),

– furnished rentals for professionals on the move,

– short‑term rentals targeting a mix of cultural, gastronomic tourism and business travel.

The downside involves practical constraints: strong restrictions on car traffic (ZTL), parking difficulties, the need for a garage to fully enhance the property. On the regulatory side, heritage protection must be considered: any intervention on facades, shutters, roofing may require specific permits, increasing renovation costs and timelines.

Sant’Agnese and Buon Pastore: The Green, Family‑Friendly Upscale Belt

To the south and southeast of the center, Sant’Agnese and Buon Pastore constitute what could be called Modena’s “bourgeois belt.” These are green residential neighborhoods, very popular with families and affluent professionals (notaries, accountants, liberal professions), offering large Liberty‑style villas with gardens, wide tree‑lined streets, and a very quiet atmosphere yet perfectly connected to the center.

Prices are slightly below the center but above the city average, around €2,350–2,500/m². These areas mainly feature large properties (detached houses, high‑end apartments), more suited to a family clientele than a student co‑living or single‑unit investment strategy.

For an investor, these neighborhoods are sought after if targeting:

– a “prime” asset with low depreciation risk,

– a solvent family clientele for long‑term rentals,

– a balance between green living environment and access to services.

Gross yield will generally be below 6%, but the appeal for tranquility and safety ensures sustained demand and good liquidity on resale.

San Faustino and Villaggio Giardino: Yield/Quality of Life Compromise

San Faustino, to the west, and Villaggio Giardino, to the southwest, combine a relatively green and quiet residential environment with good services and still affordable prices.

Villaggio Giardino is more oriented toward single‑family homes with large gardens, in a very green setting. Average prices are around €2,188–2,300/m². These sectors are particularly suited for:

– families looking for space and quiet,

– long‑term investors targeting a stable clientele,

– furnished long‑term rental projects rather than short‑term ones.

In terms of yield, the range is often 5–6% gross, but with good visibility on future demand, making these interesting balance zones between wealth preservation and profitability.

Crocetta, Sacca, San Lazzaro, Modena Est: Yield and Upside Potential

To the north and east, Crocetta, Sacca, San Lazzaro, and Modena Est form a set of neighborhoods undergoing transformation. Crocetta, long seen as more outlying, has benefited in recent years from a major redevelopment plan: new constructions, green spaces, public services. Prices are among the most affordable in the city, around €1,000/m² for some segments, and between €1,200 and €1,750/m² in other references.

This relative affordability, combined with good accessibility and a diversified offering (studios, family apartments, townhouses), makes it a prime playground for yield‑focused investors. The Sacca/Crocetta area is even cited among the neighborhoods offering the best yields in Emilia‑Romagna, with gross rates approaching 7%.

Rents remain solid, supported by demand from local households with median budgets, but also by proximity to certain employment hubs. For an investor, the equation is clear: purchase at a price below the city average, logically more room for negotiation, and a rent per square meter that doesn’t drop as much, thus boosting yield.

Baggiovara, Cognento, and the Policlinico Area: Targeting the Hospital and University

Baggiovara and Cognento, south of the city, are green fractions with a high concentration of recent constructions, often energy‑efficient. Baggiovara houses Modena’s largest hospital, creating a very specific demand pool: doctors, nurses, technicians, administrative staff, medium‑term treatment patients, accompanying families.

These sectors are particularly recommended if you aim to:

– secure long‑term rentals for hospital staff,

– rent to patients or families for stays of a few weeks to a few months,

– bet on new or recent properties with high energy ratings, valued by new European standards.

Closer to the center, the Policlinico/University area is described as one of the most dynamic poles of the rental market. The presence of a university hospital and several faculties attracts a constant flow of students, doctoral candidates, researchers, and healthcare staff from other regions. Small units are in high demand, and well‑placed one‑bedroom apartments can be rented year‑round with almost no vacancy.

For an investor, targeting these micro‑markets (Policlinico, university neighborhoods) with furnished studios and one‑bedrooms is a quasi‑”defensive” yield strategy: strong rental liquidity, manageable turnover, and a market that doesn’t rely solely on tourism, but mainly on academic and hospital flows.

Morane, Vaciglio: Southern Family Zones

Morane, to the south, borders one of the city’s largest parks and is characterized by large properties and a supply of townhouses, semi‑detached homes with gardens. Like Vaciglio or certain parts of Buon Pastore and Sant’Agnese, it has a family‑oriented neighborhood profile, with good access to commercial areas and relative distance from the center’s bustle.

These sectors suit investors targeting rentals to local families on long leases, with lower volatility but generally slightly lower yields than in tighter student or mixed neighborhoods.

Long‑Term or Short‑Term Rentals: Which Model to Choose in Modena?

Modena has the particularity of being both a university city, a world‑class industrial center, and a still somewhat discreet but growing tourist destination, especially in the gastronomic and cultural segment. This hybridization is reflected in the structure of its rental market.

The Long‑Term Rental Market

The city’s average figures show an overall rent of around €1,100/month for a standard home, with more than €11.9/m²/month on average. Market benchmarks indicate, for example:

For an investor, long‑term rental offers several advantages:

– cash‑flow visibility,

– limited management costs (agency fees 6–10% of annual rent, vacancy estimated at one month per year),

– simplified taxation via the cedolare secca (21% on gross rents, sometimes 10% in certain municipalities with regulated rents),

– less dependence on tourist fluctuations or seasons.

– IMU (0.3–0.7% of market value for a secondary residence, often higher for non‑residents),

– TARI (waste tax),

– condo fees (4–8% of rents),

– maintenance (0.7–1.2% of property value annually),

– insurance,

– income tax on rent,

the net yield typically stabilizes between 3% and 4.5%.

The Short‑Term and Seasonal Rental Market

Short‑term rental (Airbnb and similar) in Modena is not as explosive as in Florence or Venice, but it has structured itself quickly:

– between 500 and 550 active listings in 2025 depending on sources,

– market considered “moderately competitive” with a majority of entire homes (nearly 80% of listings) and a dominance of apartments,

– dominant type: one‑bedroom (T2), representing about half of the stock,

– average capacity: 3.2 people, with a core market for 2 to 4 travelers.

The financial indicators are as follows:

Seasonality is marked, with a revenue peak in September, good months in spring and early fall, and a trough in January. The best listings (top 10%) can show:

– an occupancy rate of 79% or more,

– revenues around $4,000 per month at high performance.

But this segment is more demanding:

– stricter regulation at the national level (mandatory CIN, penalties up to €8,000 for failure to display the code, registration requirement, control of self check‑in systems),

– a proposal to unify the taxation of short‑term rentals at 26% flat tax (instead of the current 21% applicable to the first property),

– need for active management or hiring a manager (15–25% commission on revenues),

– demand volatility in case of a tourism crisis.

In Modena, short‑term rentals are particularly attractive:

– in the Centro Storico (tourist and business stays),

– near the train station or main axes,

– in quality properties targeting a “premium” clientele (as illustrated, for example, by an apartment like “Molinari House Lux in Modena Center” with ADR ≈ €148, 62% occupancy, and over €21,000 in annual revenue).

But the city remains “underserved” for tourism relative to its potential, leaving room for new entrants, provided regulations are strictly followed.

Tax and Regulatory Framework: What an Investor Needs to Know

Investing in Modena means investing in Italy. The national tax and regulatory framework applies, with some local specifics on IMU levels and certain rental rules.

On Purchase: Registration Duties, VAT, and Ancillary Costs

When acquiring a property in Italy, a foreign investor should anticipate approximately 10–15% additional costs on top of the sale price, including:

– registration duties: 2% of the cadastral value for a “first home” purchase (rare for a non‑resident), 9% otherwise,

– mortgage and cadastral taxes (flat €50 each when buying from a private individual, €200 each if buying from a company),

– VAT only if buying from a developer or construction company (4% for primary residence, 10% for standard housing, 22% for luxury properties),

– notary fees, agency fees.

While Holding: IMU, TARI, and Rental Taxation

The IMU (Imposta Municipale Unica) is the municipal property tax. It is not due on the primary residence (except luxury properties), but it is due on secondary residences—which is typically the case for an investment property in Modena held by a non‑resident.

For a rented apartment, the annual bill can be about 0.4% to 1.1% of the cadastral value (often lower than the market value), with a common range around €600 to €1,400 per year for a property worth around €200,000. Added to this is the TARI (waste tax), payable by the occupant (tenant or owner‑occupier).

Rental income can be taxed:

– either under the progressive IRPEF scale,

– or, for eligible residential leases, under the cedolare secca regime, a flat tax that replaces IRPEF, regional surcharges, and certain ancillary taxes.

The rates are:

– 21% for open‑market leases,

– 10% for regulated rent contracts in certain municipalities.

For short‑term rentals, a reform under discussion aims to raise this rate uniformly to 26%, with withholding at source by platforms (Airbnb, Booking…). Already today, Italy distinguishes:

Short-term rental reform in Italy

– a 21% rate for the first property in short‑term rental,

– 26% for the second.

Beyond two tourist rentals, the activity tends to be classified as a business activity with a different tax regime.

On Resale: Capital Gains and Holding Horizon

Real estate capital gains in Italy are taxed at 26% if the property is resold within five years of purchase. After that period, the gain is exempt, unless work was carried out using certain schemes (such as the Superbonus 110%), in which case the taxation period may be extended to ten years.

If the property was the principal residence of the investor for most of the holding period, the capital gain is generally exempt, even if sold within five years.

For a purely rental investor in Modena, the most rational strategy is therefore to think in terms of a horizon of at least five years, which aligns well with the prospects of moderate but steady growth in the local market.

Financing: What a Foreign Investor Should Anticipate

Italian banks lend to foreigners, including non‑residents, but with generally more restrictive conditions than for Italian residents.

For a non‑resident investor earning income abroad, expect:

– a loan‑to‑value (LTV) ratio often limited to 50–60%,

– a down payment of 40–50% of the purchase price,

– fixed or variable rates around 3–4.5% in early 2026, with a slight premium over residents,

– a loan term often capped at 20–25 years (vs. 30 years for residents).

– obtain a bank pre‑approval before signing the preliminary contract,

– include a clause making the contract conditional on loan approval (clausola di condizione sospensiva),

– be assisted by a broker specialized in financing for non‑residents.

The decline in mortgage rates in Italy between 2023 and 2025 (from nearly 4.8% to around 3.5%) has revived credit demand, with about 18% increase in applications in the third quarter of 2025. In Modena, combining this more favorable financing window with a local market still in a phase of gradual revaluation is an opportunity to consider for a long‑term investor.

Renovation, Energy Efficiency, and Property Value Enhancement

As in the rest of Europe, new energy standards are increasingly influencing purchasing decisions. The European directive on the energy performance of buildings (“Green Homes”) and the rise of green loans have a concrete impact on property values:

– homes in classes A/B maintain and increase their value better, sell faster, and benefit from reduced interest rates via green mortgages,

– properties in classes F/G see their attractiveness decline, are harder to finance, and risk a gradual discount due to renovation work that will progressively become mandatory.

For an investor, two approaches are possible:

In the Centro Storico or in neighborhoods subject to strong heritage constraints, however, local specificities must be factored in: longer lead times (often +3–6 months due to permits), costs 20–40% higher to comply with material and traditional technique requirements, restrictions on installing solar panels or modern elements.

In Modena, where a significant portion of the housing stock is old, renovation can be a powerful lever for value creation, but it requires a local team (architect, geometra, contractors) familiar with municipal regulations and interactions with heritage protection authorities.

Specific Risks and Points of Caution

Like any real estate market, Modena is not without risks. The city offers a rather defensive profile compared to ultra‑tourist destinations, but a savvy investor should monitor several factors.

On the technical side, the presence of an old housing stock, especially in the center, increases the likelihood of structural defects, outdated electrical and plumbing systems, or work done without permits. Verification of urban planning compliance (conformità urbanistica) and cadastral compliance (conformità catastale) before purchase is essential. Buying without a technical audit, especially in a historic building, exposes you to unforeseen costs.

Finally, on the macro level, Italy remains a market where liquidity can shrink quickly in the event of an economic shock. The most liquid properties will remain those that are:

– well‑located (proximity to center, university, hospital, transport links),

– standard type (one‑bedroom, two‑bedroom),

– in good energy condition.

Choosing too atypical a segment (large high‑end properties in a degraded periphery, for example) increases the risk of low liquidity on resale.

How to Structure an Investment Strategy in Modena

For a foreign investor discovering Modena, it is useful to think in terms of concrete scenarios rather than generalities.

A first scenario involves targeting a one‑bedroom near the Policlinico or faculties, in a building from the 1980s–2000s in good condition. With a purchase price around €150,000–170,000, rents of €800–900/month, and management of a long‑term furnished rental, you can aim for a gross yield around 6–6.5%, and a net yield of about 4% after taxes and expenses, with limited vacancy.

A third, more wealth‑preservation scenario would be buying a house or large apartment in a neighborhood like Buon Pastore or Sant’Agnese, targeting Italian families on long leases. The yield will be more modest (5–5.5% gross), but rental stability and value resilience in a market downturn provide insurance.

In all cases, the investor in Modena will need to:

Modena promises neither the vertiginous rises of Milan nor the extreme yields of some southern markets, but it offers a rare balance between yield, stability, robust rental demand, and appreciation prospects driven by a solid economic fabric and massive public investments. For an investor seeking a tangible European asset in a lively but human‑scaled city, it is today one of the most coherent markets in northern Italy.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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