Long lease or short let: which is right for your Milan flat?

There is no single "best" way to rent out a Milan apartment. There are trade-offs, and the right choice is the one that fits your appetite for risk, effort and involvement. Broadly, owners have three routes: a traditional long-term lease with a resident tenant, running short-term stays yourself, or letting a company take the flat on a guaranteed-rent sublease. This guide walks through each one honestly, with the contract types, the tax, the risks and the flexibility laid out side by side, so you can decide with your eyes open.

The three paths, in one breath

Before the detail, here is the shape of each option.

• A long-term lease. You sign a multi-year contract with a resident tenant, receive a fixed rent, and do very little day to day. In exchange you accept vacancy and non-payment risk, and it can be slow and difficult to recover the flat when you want it back.
• Short-term letting, run by you. You host guests for nights and weeks at a time. The income potential is higher and you keep the calendar in your hands, but it becomes a genuine part-time job with its own registrations, reporting and taxes.
• A guaranteed-rent sublease. A company rents the apartment from you at a fixed monthly amount and hosts it short-term itself. You get the steady, predictable income of a long lease, but the company carries the occupancy risk, keeps the home to a high standard, and handles every compliance obligation.

Path 1: The traditional long-term lease

This is what most people picture when they think of "renting out a flat": a household moves in, signs a contract for several years, pays every month, and treats the apartment as home. It is the lowest-touch option in terms of daily effort, and for many owners that simplicity is the whole appeal.

The contract types you will meet

Italian residential leases come in a few standard forms, and which one you use shapes your rent, your tax and how long you are committed.

• The 4+4 (canone libero). The classic free-market lease: four years, then an almost automatic renewal for another four. The rent is freely agreed between you and the tenant. It is stable and simple, but it also ties the flat up for a long time.
• The 3+2 (canone concordato). An agreed-rent contract where the rent sits within bands set by local landlord and tenant associations. The rent ceiling is usually lower than the open market, but there is a meaningful tax incentive in return (see below).
• The transitorio. A transitional lease of between one and eighteen months, available only when there is a documented temporary need (a work posting, a life transition, and so on). It cannot be used simply to keep a contract short by preference.
• The student lease. A dedicated form for university students, typically running from six months to three years, common in a university city like Milan.

Whichever form you use, a residential lease running beyond thirty days has to be registered with the Agenzia delle Entrate, and it is normal to hold a security deposit (cauzione) of up to three months' rent against damage and arrears. That deposit helps at the margins, but it rarely covers an extended period of non-payment, which is one reason the morosita risk deserves respect rather than a shrug.

The tax picture: cedolare secca

Most private landlords in Italy opt for the cedolare secca, a flat, substitute tax on rental income. It replaces ordinary income tax on that rent along with the regional and municipal surtaxes, and the registration and stamp duties on the lease. The headline rates are:

• 21% on a free-market lease such as a 4+4.
• 10% on an agreed-rent (canone concordato) contract in a high-demand municipality, which Milan is, subject to the usual conditions.

There is a trade-off attached: while you are on the cedolare secca you give up the right to apply the annual ISTAT inflation adjustment to the rent. Over a long contract that matters, so it is worth weighing with your accountant rather than assuming the flat rate is always best.

What can go wrong

The long lease looks calm on paper, and often is. But the risks it carries are real, and they fall entirely on you.

• Non-payment (morosita). If the tenant stops paying, you keep owing your own costs while receiving nothing. Recovering the flat means an eviction (sfratto) through the courts, and in a busy jurisdiction like Milan that process can run for many months.
• Vacancy between tenants. Every gap between one tenant leaving and the next signing is time the apartment earns nothing, and you carry that cost.
• Limited flexibility. A 4+4 renews almost automatically after the first four years unless you have specific legal grounds (for example, you need the flat for yourself or close family) and give notice well in advance. You cannot casually decide to reclaim it.
• Everyday wear. A home lived in full-time ages at the pace of daily life. You will usually find out its true condition only when the tenant leaves.

Path 2: Running short-term lets yourself

The second route is to host the apartment yourself for short stays: nights, weekends, a week here and there. Done well, and in a strong central location, short-term letting can put the flat to more intensive use than a single long lease, and you keep full control of the calendar and the pricing. It also spreads your income across dozens of guests, so no single default can sink a month.

The catch is that it is real work, and it comes with a compliance stack that has grown considerably.

The rules you take on

• The CIN. Every short-term rental in Italy now needs a national identification code, the Codice Identificativo Nazionale, drawn from the national database of accommodation. It has to appear on your listings, and the registration comes with basic safety requirements for the property.
• Guest reporting. Within a short window of each arrival you must report your guests to the police (the Questura) through the Alloggiati Web portal. This is a legal duty for public security, not an optional courtesy.
• Milan's tourist tax. The city levies an imposta di soggiorno per guest per night. You collect it from your guests and remit it to the Comune on the required schedule.
• The four-apartment threshold. Let up to four apartments short-term as a private individual and you stay in the simpler locazione breve regime. Cross that line, to a fifth apartment, and the law presumes you are running a business, which brings a VAT number (partita IVA) and the fuller set of business obligations.
• Tax on the income. Short-term letting can also use the cedolare secca, but the rate is 21% on a single property and 26% from the second to the fourth. If you scale into business territory, ordinary business taxation and VAT apply instead.

The reality of the workload

Beyond the paperwork, hosting is a hands-on operation. There is pricing to adjust around Milan's fair and fashion calendar, which swings demand sharply. There are guest messages at all hours, check-ins and check-outs to coordinate, cleaning and fresh linen between every stay, small maintenance that has to be fixed fast, and reviews to keep high. Do it yourself and it can quietly absorb your evenings and weekends. For some owners that is an enjoyable side project; for others it is precisely the thing they wanted to avoid.

Path 3: A guaranteed-rent sublease

The third route is the one owners often overlook, because it is newer and less familiar. It works like this: a company signs a rental contract with you at a fixed monthly rent, and is granted the right to sublet the apartment short-term. The company then hosts the flat itself, exactly as a professional short-let operator would, but the arrangement to you feels like a long lease.

The key point is where the risk sits. Because your rent is fixed and contracted, you receive the same amount every month whether the calendar is full or empty. The occupancy risk, the seasonality, the quiet weeks: all of that belongs to the company, not to you. You are not exposed to guest defaults, because your counterparty is the company, not the guests. In this sense a guaranteed-rent sublease borrows the stability of a long lease and pairs it with a professionally run, well-kept home.

It also removes the compliance stack entirely from your side of the table. The company operates the hosting, so it typically holds the operating registrations, reports guests to the Questura, and collects and remits the tourist tax. A good operator keeps the apartment to a hotel-grade standard, because clean, well-maintained homes are what earn the reviews its own business depends on. That alignment tends to work in the owner's favour: the company has every reason to look after the flat as if it were its own.

On tax, the fixed rent you receive is rental income, and depending on how the contract is structured it may be eligible for the cedolare secca. This is an area where the details and the current interpretation genuinely matter, so it is one to confirm with a commercialista rather than assume.

Why the apartment tends to stay in good shape

There is a quiet advantage to this model that owners often only appreciate afterwards. A short-let operator cleans the apartment professionally between every stay, restocks it, and has eyes on it constantly, so a dripping tap or a tired sofa is noticed and dealt with early rather than discovered years later. Its incentives point the same way yours do: guests who arrive to an immaculate home leave the reviews the business runs on, so keeping the flat pristine is not a favour to you, it is core to how the company earns. Contrast that with a long lease, where a household lives in the flat full-time and you typically learn its true condition only on the day the keys come back.

To be fair about it, a guaranteed-rent sublease does introduce one risk the others do not: your counterparty is a company, so its reliability and solvency matter. That is not a reason to avoid the model; it is a reason to choose a serious, transparent operator with a real track record, a proper contract, and references you can check.

The three paths side by side

Here is the comparison in a single view. Read down the column that matters most to you.

*The rent you receive is rental income and may qualify for the cedolare secca depending on how the contract is structured. Confirm your position with a commercialista.

Which option suits you?

Rather than crown a winner, it helps to match each route to the owner it fits best.

A long-term lease suits you if

• You value a single, resident tenant and the simplicity of one contract for years.
• You are comfortable carrying the non-payment and vacancy risk yourself.
• You do not expect to need the apartment back at short notice.
• Predictable, modest income matters more to you than the flat's upside or its condition between tenants.

Running short lets yourself suits you if

• You enjoy hospitality and are ready to treat the flat as an active project.
• You have the time (or a person) to handle pricing, guests, turnovers and maintenance.
• You are willing to own the CIN, the guest reporting and the tourist tax, and to stay the right side of the four-apartment line.
• You want to keep full control of the calendar and capture the strong periods yourself.

A guaranteed-rent sublease suits you if

• You want the steady, predictable income of a long lease.
• You would rather not do any of the work, or carry the occupancy and guest risk.
• You care about the apartment being kept to a high standard while it is let.
• You would like the compliance handled for you, and a company as your counterparty rather than an unknown household.

A few things to check, whichever you choose

Some questions apply no matter which route you take, and answering them early saves trouble later.

• Your building's rules. Many Milan condominiums have a regolamento condominiale that restricts or bans short-term tourist letting. It binds you regardless of any private contract, so check it before you plan around short stays.
• Whether you own or rent. If you hold the apartment on a lease yourself rather than owning it, your own contract must allow subletting before you can pass that right to anyone else.
• Your mortgage and insurance. Confirm that your lender and your policy are comfortable with the use you have in mind, and that contents and liability are properly covered.
• The tax that follows the model. Long rent, short-let income and a fixed sublease rent are treated differently. The route you pick changes how you declare, so map it out with a commercialista.
• The counterparty. Whether it is a tenant or a company, ask for references, read the contract term and notice period, and be clear on who is responsible for what.

Three common mistakes to avoid

Whichever direction you lean, a few errors come up again and again.

• Assuming a long lease is risk-free. It is low-effort, not low-risk. A single non-paying tenant can tie up the flat and your money for the better part of a year, so treat tenant screening and the deposit as seriously as the rent.
• Underestimating the short-let workload. Owners often plan around the good months and forget the messaging, the turnovers and the reporting that fill the days in between. If you go this way, budget your own time honestly, or the numbers on paper will not match the life you actually live.
• Signing before checking the building. A regolamento condominiale that bans tourist letting can undo a short-let plan after you have committed to it. Confirm the rules, and your own right to sublet if you do not own outright, before you build a strategy on top of them.

The most useful way to decide is to be honest about what you actually want from the apartment. If a resident tenant and a simple contract appeal, and you can live with the risk and the long commitment, a traditional lease does the job. If you love hosting and want control, running short stays yourself can be rewarding, provided you respect the workload and the rules. And if you want the stability of a fixed monthly income without any of the work, and you want the home kept beautifully while it earns, a guaranteed-rent sublease is worth a serious look. There is no wrong answer, only the one that fits your life.