Property investment in Palermo, Italy
2026 Market Data & Investment Analysis
Gross Yield
8.44%
Annual rent / price
Median Home Price
€108,000
As of 2026-Q1
Median Monthly Rent
€760
Per month
Population
649,002
-0.9% / yr (5y avg)
Estimates based on median market data. Actual returns depend on your specific property. Source: Immobiliare.it / ISTAT / Agenzia delle Entrate (OMI), 2026-Q1.
Calculate your rental yield in Palermo
Pre-filled with Palermo's median values. Adjust to match your specific property.
Property Details
Total acquisition cost before taxes
HOA, insurance, property management
% of time the property is empty
% of purchase price (e.g. 2% = 2)
Rule of thumb: 1% of purchase price/yr
Results
Gross Rental Yield
8.44%
Net Rental Yield
4.80%
Cap Rate
4.80%
Monthly Cash Flow
€432.00
Annual Cash Flow
€5,184.00
Palermo rental market at a glance
Median Home Price — 5-Year Trend
Median Monthly Rent — 5-Year Trend
Palermo offers some of Italy's highest rental yields — approaching 8–9% — driven by property prices well below €1,500/m² and a growing tourism sector that supports both long-term and short-term rental strategies.
Palermo offers significantly above-average rental yields of 8.44%, making it an attractive market for income-focused investors.
Declining population of 0.9% per year may pose risks to long-term rental demand. Investors should focus on established neighborhoods with stable tenant bases.
The vacancy rate of 8.5% is above average, which could impact cash flow consistency. Thorough tenant screening and competitive pricing are important in this market.
What type of investment market is Palermo?
Palermo is a cash flow-focused market where high rental yields can generate strong monthly income. Lower population growth means price appreciation may be limited, making this primarily an income play.
✓ Strengths
- •High gross yield of 8.44% supports strong monthly cash flow
- •Lower entry prices relative to rents reduce upfront capital needed
- •Income-driven returns are less dependent on market timing
! Risks
- •Limited price appreciation potential reduces total return
- •Declining population may increase vacancy risk over time
Key Metrics
Common questions about investing in Palermo
Is rental investing profitable in Palermo?▾
What is the average rental yield in Palermo?▾
How does Palermo compare to Catania for investors?▾
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