Rome and Florence Are Not the Same Market
American buyers consistently treat Rome and Florence as interchangeable Italian urban choices. They are not. They differ in market depth, buyer composition, price trajectory, rental dynamic, and the fundamental lifestyle they offer. The buyer who belongs in Rome is rarely the buyer who belongs in Florence, and vice versa.
Rome
Rome is the largest real estate market in Italy by transaction volume. It has genuine liquidity — properties in prime neighbourhoods trade regularly, the buyer pool is diverse, and exit is more predictable than in smaller Italian cities. This is relevant for Americans who are uncertain about long-term holding intentions and want optionality.
The prime neighbourhoods for American pied-à-terre buyers are concentrated in a specific set of historic rioni: Prati (across the Tiber from the Vatican — practical, Parisian-feeling, strong expat infrastructure), Trastevere (romantic, village-like, strong short-term rental market), Parioli (residential, quieter, more Roman buyer base), and the historic centre itself — Campo de' Fiori, Piazza Navona, Pantheon area (most tourist-adjacent, highest rental potential, most expensive per metre).
Rome palazzo apartments in the historic centre — high ceilings, period frescoes, terracotta floors — trade at €7,000–€12,000 per square metre in prime locations. A 70sqm apartment represents a €490,000–€840,000 acquisition. A 120sqm apartment with a terrace in Trastevere might trade at €700,000–€1.1M.
Florence
Florence operates on a fundamentally different logic. The historic centre is geographically tiny — bounded by the medieval walls — and the supply of genuinely characterful historic apartments within that boundary is structurally constrained. American buyers have been acquiring in Florence for generations, which means there is an established infrastructure of attorneys, renovation professionals, and property managers who understand the American buyer's specific requirements.
Florence apartments in the Oltrarno, near the Ponte Vecchio corridor, or on the Lungarno typically trade at €6,000–€10,000 per square metre. The scarcity premium is real — Florence is smaller than Rome, the international buyer pool is proportionally larger relative to supply, and the best historic properties rarely transact at all. This creates genuine upside on acquisition if you can access the right properties, and genuine difficulty if you cannot.
The most desirable Florence acquisitions are not on public portals. They are acquired through relationships — local attorneys, property managers, architects — who know the owners of specific buildings before any formal sale process begins.
| City / Neighbourhood | Property Type | Price Range |
|---|---|---|
| Rome — Historic Centre | Palazzo apartment (70–100sqm) | €500K–€1.2M |
| Rome — Trastevere | Apartment with terrace | €400K–€900K |
| Rome — Prati | Residential apartment | €350K–€700K |
| Florence — Oltrarno | Historic apartment | €600K–€1.5M |
| Florence — Lungarno | River-view apartment | €800K–€2.5M |
| Florence — Chianti access | Townhouse with rural proximity | €400K–€900K |
Short-Term Rental and the Pied-à-Terre Model
Both cities have active short-term rental markets through Airbnb and equivalent platforms. Italian rental income is taxable — the cedolare secca flat tax of 21% (or 26% for multiple properties) applies to short-term rental income. This is manageable and is straightforwardly administered. US rental income from Italian properties must also be reported on your US return — the FBAR and FATCA implications of an Italian bank account that receives rental payments should be reviewed with your US tax advisor.
The pied-à-terre model — owner use for 4–8 weeks annually, professional short-term rental management for the balance — is well-established in both cities and, in the right locations, can generate €25,000–€60,000 in gross annual rental revenue that offsets a meaningful portion of ownership costs.
The Cultural Buyer
A meaningful segment of American buyers in Rome and Florence are motivated primarily by cultural and lifestyle factors that resist purely financial quantification. The decision to own in these cities is, for many buyers, an expression of a relationship with Italian civilisation rather than a portfolio allocation decision. Peter's approach is to take that motivation seriously while still ensuring the financial structure is sound — the right legal framework, the right tax advice, and the right management infrastructure to make the experience sustainable over a 10–20 year ownership horizon.