Rental Yield in Italy: What an Apartment in Milan Actually Earns in 2026

Published on July 6, 2026 and written by Cyril Jarnias

Betting on real estate in Italy’s economic capital is a dream for many European investors. But behind the chic neighborhoods of Brera, the towers of Porta Nuova, and the Olympic Games effect, a concrete question arises: how much does an apartment in Milan really yield in 2026, once rent, expenses, and taxes are factored in?

The challenge in 2026 is therefore not to find the “10% miracle,” but to understand where Milan stands in the Italian landscape, how prices and rents break down by area, and what strategies still make it possible to achieve a decent yield.

An expensive, solid… and fairly rational Milan market

Milan remains by far the most expensive city in Italy for residential real estate. 2026 data confirms this top position.

The overall picture already gives an idea of the financial commitment required.

On a per-square-meter basis, Milan sits well above the rest of the country. Most sources converge on an average price of €5,500 to just over €6,000/sq m, with pronounced extremes.

For a “typical” buyer, analysts recommend viewing Milan as a city averaging €5,000–€5,500/sq m. In popular peripheral neighborhoods (Baggio, Quarto Oggiaro, Comasina, Ponte Lambro, Gratosoglio…), older apartments can still be found around €3,200–€3,500/sq m, but you have to accept greater distance from the center, variable building quality, and sometimes a rougher neighborhood image.

Several factors underpin demand: Lombardy’s financial role, student flows, corporate headquarters, favorable tax treatment for high-net-worth foreigners, the co-hosted Winter Olympics, and a perceived more stable political environment. All this attracts more capital, both Italian and international.

Rents: among the most expensive cities in Europe for tenants

To evaluate a yield, you need to compare purchase prices with rents. And Milan is also tough on the rent side. Renting a small apartment in the center can eat up 70% or more of an average net salary, one of the highest levels in Europe.

Figures from 2025–2026 provide a fairly accurate picture of monthly rents.

In 2026, national data indicate an average rent in Italy around €15/sq m, but Milan exceeds €23/sq m. In the hyper-center, listed rents can reach €35/sq m per month, putting a 100 sq m unit around €3,500 monthly. Upscale neighborhoods like Brera, Duomo–Vittorio Emanuele, or Moscova frequently exceed €30–€33/sq m.

Gross and net yield: what to expect in Milan in 2026?

For an investor, what matters is not just the absolute level of rents, but their relationship to the purchase price, i.e., the rental yield.

The notion of gross yield is simple: annual rent divided by the purchase price. Net yield, more relevant, subtracts operating costs (taxes, maintenance, condo fees, vacancy, management…) and is calculated on the total acquisition cost (price + purchase costs, even renovations).

In 2026, the broad ranges for Milan are well established:

We can summarize the Milan landscape as follows.

In practice, studios and small one-bedroom units between 25 and 50 sq m offer the best gross yields per square meter. Large family-sized apartments, especially in the historic center, see their yields compressed by very high per-square-meter prices.

How much does an “average” apartment in Milan yield?

To get a concrete picture, let’s take the 2026 averages for Milan, all locations combined, published in a database that details yields by property type.

If we take the typical 1-bedroom apartment at €305,000 rented for €1,500 per month, the gross calculation is simple: €1,500 × 12 = €18,000 annual rent, which is about 5.9% gross yield.

Simplified illustration of a typical case

Let’s take an educational example, consistent with the orders of magnitude seen in Milan:

– Purchase of a 1-bedroom for €300,000 ;

– Acquisition and agency fees: approximately 8% (€24,000) ;

– Total entry cost: €324,000 ;

– Monthly rent: €1,450 (€17,400/year) ;

– Annual operating expenses (tax, condo, maintenance, vacancy): €5,500.

Net income before tax: €17,400 – €5,500 = €11,900.

Net yield before tax on total cost: €11,900 / €324,000 ≈ 3.7%.

This falls in the upper range of a good net yield for Milan on a small, well-located unit, excluding bank leverage effects.

Yield differences by neighborhood: from the historic center to Baggio

In Milan, location makes all the difference in terms of yield. The farther you get from the center, the higher the gross yield, but with a trade-off in liquidity, neighborhood image, and sometimes tenant stability.

Historic center and prime neighborhoods: safety over cash flow

Areas like Centro Storico, Brera, Quadrilatero, parts of Porta Nuova, CityLife, or Arco della Pace–Sempione have the highest prices in the city. In these sectors, an “ordinary prime” apartment typically trades between €9,000 and €12,500/sq m, and beautifully renovated units can exceed €22,000/sq m.

Rents are also sky-high, but not enough to fully compensate for these prices. The yield data for these sectors speaks for itself.

The finding is clear: yield compression is strong in the most prestigious neighborhoods. You often see 3–3.5% gross on large units, 4–5% on small apartments, but rarely more. Once expenses are included, net falls to around 2% or less on large luxury units.

Well-connected periphery: the playground for yield

At the opposite end, several peripheral or gentrifying areas stand out for high gross yields while maintaining robust rental demand.

Among the most cited sectors in 2026:

– Baggio and the Bisceglie–Baggio–Olmi cluster;

– Greco–Turro, especially around Precotto–Turro and Viale Certosa–Cascina Merlata;

– Comasina–Bicocca;

– Corvetto–Rogoredo;

– Vialba–Gallaratese near Certosa;

– Bovisa, driven by the university presence.

The figures are revealing.

In these areas, a well-chosen property can generate between 5.5 and nearly 7% gross on long-term rentals, well above the Milan average. The trade-off is slightly higher rental risk, strong heterogeneity of the building stock (beautiful renovated buildings next to tired blocks), and sometimes a more working-class neighborhood perception that can matter at resale.

Among all these yield pockets, one name comes up consistently: Bovisa.

Focus on Bovisa: the star of Milan yield in 2026

Bovisa is often cited as the best compromise “reasonable entry price + strong rental demand + above-average yield.” The neighborhood benefits from the presence of engineering and design schools, feeding a continuous flow of students and young professionals looking for small units.

Detailed figures from a typical case highlight this potential:

Even after correcting any inconsistencies in some tables (e.g., rent amount duplicated with the mortgage payment), the orders of magnitude remain consistent: a studio around €160,000 generating nearly €900 per month indeed sits around 6% gross. After deducting IMU, condo fees, maintenance, vacancy, and management, you naturally fall to around 4.5–5% net before tax.

Milan, city of studios: size matters for yield

One constant emerges from all analyses, whether for Milan, Rome, Turin, or Naples: in every neighborhood studied, the smallest available property type offers the best gross yield, the highest occupancy rate, and the shortest rental period.

Milan is no exception. The 2026 sample shows that:

This logic is reflected in the figures for the entire city:

– studio: 5.69% gross;

– 1 bedroom: 5.90%;

– 2 bedrooms: 5.18%;

– 3 bedrooms: 4.92%;

– 4+ bedrooms: 4.26%.

An investor looking to optimize yield in Milan will therefore be wise, all else being equal, to favor well-designed small units, especially in neighborhoods near universities, hospital hubs, or office centers.

Milan compared to the rest of Italy: yield vs. security

Purely in terms of yield, Milan is neither the best nor the worst city in Italy. More affordable markets like Catania, Turin, or some southern cities can show average gross yields above 7–9%, while Milan runs around 5%.

Nevertheless, institutional investors and wealthy individuals continue to favor Milan for several reasons:

Major agency networks and research firms agree on one point: Milan in 2026 is a market for capital preservation and rental depth, rather than a playground for extreme yields like some secondary cities or seaside resorts. In other words, you buy here for a “decent yield + high liquidity + reasonable appreciation potential” combination rather than a product offering 8–10% annual gross with high vacancy risks.

Long-term vs. short-term: what impact on yield in Milan?

Beyond the choice of neighborhood and property type, the rental strategy strongly influences yield.

Long-term rental: the backbone of the market

Classic rental, with a residential lease, remains the foundation of the Milan market. In this context:

– typical gross yields range from 3–3.5% in prime sectors to 5.5–7% in well-connected peripheries;

– net before tax most often falls between 2 and 4% depending on the property type and management quality;

– taxation can be simplified via the cedolare secca regime at 21% (or 10% under rent-controlled leases, less common in Milan).

The main advantage is predictability: less day-to-day management, lower vacancy, and more stable income, which suits an investor who doesn’t live on site or wants to minimize oversight.

Short-term rental: an income boost at the cost of real complexity

Short-term rental platforms bring another dimension, especially in a city like Milan, heavily visited for trade fairs, fashion, design, and soon the Olympic Games.

In 2026:

– on a well-located apartment in the hyper-center, near the Duomo, Brera, or the Navigli, annual gross income from short-term rental can be 7–10% of the price, sometimes more in exceptional event years;

– the national average for major tourist cities often ranges between €25,000 and €35,000 annual gross revenue for a professionally managed two-bedroom unit;

– in Milan, some analyses cite typical annual gross revenue around €35,000 for a property at about 72% occupancy with an average nightly rate of around €135.

Moreover, in Italy short-term rental has become a significantly more regulated activity:

– mandatory to obtain a national identification number (CIN) and display it on listings;

– withholding tax applied by platforms on rents and remitted to the Italian tax authorities;

– since the 2026 budget, stricter tax regime: 21% flat tax on the first short-term rental property, 26% on the second, and a shift to professional activity (VAT, accounting, social charges) from the third property onward;

– in Milan, this is compounded by a tourist tax per night and local rules on safety and activity declaration.

In short, for an investor who owns one or two properties in very strong locations in Milan, short-term rentals can improve overall yield, but at the cost of heavy management or hiring a specialized operator, and a tighter regulatory framework.

The real cost of buying in Milan: beyond the listed price

To properly measure a yield, you need to account for the true cost of the investment, not just the price signed at the notary.

In 2026, for an existing apartment in good condition in Milan:

– the total acquisition cost typically exceeds the sale price by 8 to 12% (notary fees, registration taxes, agency commission, various formalities);

– if renovations are needed, the overall bill can climb to 18–35% above the purchase price;

– in the case of major renovation, the total envelope can be 30–50% more than the amount paid to the seller.

The investor must therefore weigh between:

– an older, cheaper-per-square-meter property that requires more work and maintenance;

– a newer or fully renovated property, more expensive to buy but less costly to operate and more attractive to solvent tenants, especially corporate ones.

Vacancy risk and rental dynamics: Milan, a deep but segmented market

A good gross yield is useless if the apartment sits empty for months. From this perspective, Milan remains in 2026 one of the most liquid markets in Italy for rentals.

Available indicators show that: current trends are constantly evolving, highlighting the importance of tracking data rigorously to make informed decisions.

In terms of annual vacancy, reasonable working assumptions for Milan are around 4–6% of the time (i.e., 2 to 3 weeks of vacancy per year), slightly higher in less demanded peripheral areas, slightly lower around university and business hubs.

This market depth explains why, despite high prices, yields don’t collapse entirely: the probability of going without a tenant for many months on a good, well-managed product remains limited.

Olympic Games, tourism, and lasting effects on the market

The approach of the Winter Olympics co-hosted by Milan acts as a spotlight on the market, especially for short-term rentals. Several independent studies have already measured the “Games effect” on temporary rents:

In the short term, this influx of visitors and speculation on temporary rentals creates strong tension, already visible in some landlords terminating long-term leases to capitalize on the Olympic window.

Nevertheless, serious analyses converge on a less spectacular medium-term reality:

The Games do not create real estate value from scratch; they mainly make visible urban transformations already underway, reinforcing Milan’s positioning as a solid long-term market rather than an event-driven bubble.

Italian taxation: a crucial filter for net yield

To evaluate what an apartment in Milan actually “yields,” you must go through the Italian tax filter.

For long-term rentals, two main regimes coexist.

For short-term rentals, the 2026 budget has tightened the framework:

– the first property in tourist rental still benefits from the 21% cedolare secca rate;

– the second property moves to 26%;

– from the third property onward, short-term rental is presumed to be a professional activity subject to VAT, business accounting, and corporate income or business income tax.

Add to that local taxes (IMU, generally 0.86–1.14% of the cadastral value for a non-primary residence) and the management of withholdings by platforms.

– a net yield before tax, after operating expenses, around 3–4%;

– a net yield after tax (flat tax) somewhere between 2.3 and 3.2% depending on gross performance and expense structure.

The temptation of short-term rental to “boost” this yield to 4–6% net therefore faces a reality: once taxation is included, the difference between the two models narrows, especially for multi-property investors who quickly move to the 26% rate and, beyond that, to professional activity status.

Milan in 2026: invest yes, but for whom and with what goal?

In 2026, Milan is neither a fire-sale market nor a levitating one. The signals are fairly consistent:

– sales prices are high, but the rise has cooled and is projected in a moderate range (around +3–4% per year under central scenarios);

– rental pressure remains strong, especially on well-located small units, with short rental periods;

– rents are very high in absolute terms, but their growth is now contained by household purchasing power;

– gross yields fall within a reasonable range for a mature European big city, with a clear gradient between safe center and higher-yielding periphery.

For an investor, the question is therefore not whether Milan is “good” or “bad,” but to properly align strategy with profile:

Regardless of profile, one rule remains: in Milan, the 2026 yield is won in the details. The price/rent ratio varies greatly from street to street, condo fees can shave off nearly two percentage points from gross yield, and taxation—especially on short-term rentals—requires thinking in net, not gross.

– around 5% gross yield on average, with a range of 3.5–7% depending on neighborhood and property type;

– roughly 3% net yield before tax across the market, a bit more for studios and small one-bedroom apartments in well-connected peripheries, a bit less for large units in the hyper-center;

– between 2 and 3% net after tax for an investor choosing a suitable flat-tax regime.

This is not a spectacular annuity market, but it is a market where the combination of “reasonable yield + depth of demand + capital liquidity” remains attractive in the European landscape. Provided you choose your neighborhood, your product… and your rental strategy wisely.

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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