Buying to holiday let in Puglia

Many dream of a little, or even large, place in the sun. Owning a holiday home for your own exclusive use comes with it’s own problems though. It always seems as if at least the first few days of any ‘holiday’ are spent doing jobs around the house. You also need to find, and pay, someone to look after the house when you are away, particularly in Puglia where houses are usually made of stone and need regular airing out to avoid damp problems. Even with help it may not be possible to have a lushly flowering terrace; for me, at least, an integral part of any Mediterranean idyll.

As someone who has done it I know that it is easy to feel that you ‘should’ use the house in order to justify the expense and overheads and to feel guilty when you can’t get away as often as you thought you would, both of which take away some of the pleasure of ownership. Much as you love the area, it can also feel restrictive limiting yourself to one holiday destination for the foreseeable future.

If, instead, you buy somewhere with investment in mind, and plan to rent out whenever you are not using it, the picture changes. All running costs are covered by the rental income – with the right purchase, managed properly, it is realistic to expect a 5-10% annual return on your investment, after costs. Your property can be properly maintained and looked after in your absence and you can arrive to a clean, aired house, with beds made up or even your fridge stocked.  The people you pay to look after your guests can also look after you.  As well as providing an annual income, if you buy in the right area, your property should increase in value anyway.  If you buy a property that needs restoring, then it will immediately be worth 20% more, over and above renovation costs, once you finish the work.  At this point, your holiday retreat becomes more of a sound investment and less of an indulgence.

Where to buy

At the moment, I would recommend buying in a town that has year round activity and appeal, extending your rental period. It should be within close reach of good beaches and not more than 45 minutes from an airport. If there are other interesting towns to visit within a half an hour’s drive so much the better.  If you buy in a town security is less of an issue and it is easier, and cheaper, to find people to look after your property and your guests.

What to buy

We recently undertook a comprehensive survey of all rental accommodation in Nardo, where I live and work, and in nearby Lecce. There was lots of it – with the increasing popularity of the area both with Italians and foreign visitors, enterprising locals as well as foreigners have snapped up lots of little town houses to turn into holiday accommodation.  In reality though, a lot of the accommodation falls short of the more discerning traveller’s requirements and there are some obvious gaps in the market.

For starters, a high percentage of accommodation has no outside space, which is an absolute must for non Italian visitors. We awarded each unit of accommodation 1 to 5 stars based as closely as possible on the hotel award system – where 1 and 2 star was very basic. We didn’t factor outside space or number of bathrooms into this – the stars were based on furnishings, decor and facilities.

1 bedroomed apartments made up 38% of the available accommodation, 45% of these had no outdoor space, and 77% of which were 1 or 2 star. 19% were three star and 4% 4 star.

2 bedroomed apartments or houses made up a further 38% of the available accommodation. 25% had no outdoor space, 40% had one bathroom. 35% were 1 or 2 star, 15% 3 star and 20% 4 and 5 star.

3 bedroomed accommodation made up 15% of the accommodation and there were no properties above a one or two star. Only 32% had outdoor space and only 13% had a bathroom for each bedroom.

4 bedroomed accommodation was of a similarly low standard and in very short supply – only 1% of the total. There were no properties with more than 4 bedrooms.

Budget permitting the best buy, in terms of gaps in the market, would be a property with more than 2 bedrooms, or a two bedroomed property with the possibility of having two bathrooms. A one bedroomed apartment, at a really good price, needing little work could also provide a healthy return if furnished to a high standard and with outdoor space.

There is definitely a high demand for the larger properties – I spent over 8 years organising self catering holidays and doing consultancy  for holiday lettings agencies  and the demand was constant – but the accommodation was lacking.

The number of bathrooms is also important – each bedroom aimed at an adult should have it’s own bathroom – it is worth the expense as you can then charge hotel prices.

Here are some good examples of properties that would provide a good return on investment – both in terms of rental income and likely increase in value over time.

The first one is a particular favourite and I may take it on as one of the first properties in my new property investment fund – more of which later. See pictures above.

It is in the historic centre of Nardo and has, potentially 5 bedrooms with room for five bathrooms. The main house is in a reasonable state, though it needs work, but there are also two outbuildings that need complete restoration. These could be done after the main house though, possibly using the income from a first rental season. There is a good sized courtyard, which could be made very pretty.  The asking price is 120,000. It would take a further 120,000 to restore the whole property and furnish it to a high standard. Even renting out the main house alone the property would give an annual return of between 5 and 8 percent and, restored, the property would be worth in the high 200s in the current market.

The second property is in nearby Galatone, where prices are lower than in Nardo. The town is smaller but lively – equally near the sea and with a good selection of shops and places to eat. This property has already been renovated. It has three double bedrooms, a single, and two bathrooms. The roof terrace needs embellishing but already has an outdoor shower and a ‘kitchen area’. You may have to wait a few years for an appreciable increase in value but furnished to a high standard this would give over a 10% return in the way of income. See pictures above.

The last property is a one bedroom apartment – still in Galatone. It has been completely renovated but it needs a kitchen and the wiring needs finishing off. It has a roof terrace and is on the market at 32,000 which means, again, an excellent return in terms of income. See pictures below.

Return on investment was calculated based on 45% occupancy between April 1st and October 31st – giving plenty of time for personal use. You would also expect to get bookings outside this period.

We are constantly looking at new properties, if you would like help with a property search then do get in touch via email ( We also offer a project management service for property needing work and a separate service sourcing affordable Puglian furniture (antique, modernist and modern), textiles, ceramics and objets and fixtures and fittings.

The new Puglian property fund will be launched shortly. Investors can invest from 2500 euros for 3 years for an annual return of 8-10% and 30% off holiday accommodation. All investments secured on property portfolio. Contact us for details.

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