It is the property world’s equivalent of having your cake and eating it: owning a pied-à-terre in an attractive location, letting it out to cover the mortgage and other costs, and using it yourself the rest of the time.

At least that is how Valerie du Monceau, 54, a feng shui consultant from Cheltenham, sees her compact one-bedroom flat in Venice, near the Ponte dei Greci, a few minutes’ walk from St Mark’s Square.

Since buying the place for something under £150,000 in September 2004, she has been renting it out to visitors at £500 a week — and taking advantage of cheap flights to use it herself when it is empty.

“Because Venice is such a fantastic city, it is lovely to go there at any time of year,” she says. “It is not just a summer place. Last year — my first full year — I had about 30 people, either for the weekend or the week. It was brilliant. It paid the mortgage and a half again. This year, I have 15 bookings already.”

Paul Bradley, 48, an architect from the Pennines, is another fan of the Venetian property market. After visiting the city for 20 years, he bought his first property in 2003 — a studio in Dorsoduro, the Mayfair of Venice, across the water from St Mark’s Square. He, too, was pleasantly surprised to find he could more than cover the mortgage and his other costs, and still use it once a month.

He has since sold it on for a profit, splashing out £200,000 for a 70sq m duplex in a former coffee warehouse around the corner. Charging £650 a week for couples and £1,000 for four people, Bradley need only rent it out one week in four to get a decent return. “Venice is the kind of place that will never go out of fashion,” he says. “Buying here is the best investment we have ever made.”

Bradley has put a lot of effort into making his place stylish. But he also swears by little touches, such as making sure there is always tea and coffee in the kitchen and, even more importantly, a bottle of chilled prosecco in the fridge.

Thanks to the length of its rental season, Venice is an especially good location for people looking for a property that doubles as a second home and fly-to-let investment. Hotels in the city tend to be expensive and often full, adding to the attractions of an apartment.

Carole Francis, who works for the Venice office of Gabetti, an Italian estate agency chain, says buyers must be realistic. Many outsiders know in advance what they want: a high-ceilinged apartment on the prized piano nobile (first floor) of a period palazzo, with a large picture window overlooking the Grand Canal. The problem, of course, is that a property like this will probably cost you £3m-£4m.

“People often come here with an idea of what Venice should be like, all perfect, and then when they visit they are disappointed and can be put off,” says Francis, originally from Co Down in Northern Ireland. “But either you want a piece of something unique, or you buy somewhere else.”

Lower your expectations a couple of notches and you could be in business. Although prices in the city are not exactly bargain-basement, they are not excessive either.

Renovated properties near St Mark’s Square that are ready to move into start at about £170,000 for a studio or a small one-bedroom flat. These prices work out at about £4,000 per sq m.

Unrenovated property can be substantially cheaper, but make sure you do your calculations properly. Building work is especially expensive in Venice because all the materials have to be brought in by small boat — which could add as much as £1,200 to your costs for every sq m you need to renovate.

Another important factor in Venice is height: although floods are not that common, when buying a ground-floor flat, try to get something at least 1.1m above sea level if you don’t want an impromptu indoor swimming pool. (It is not only the superior view that makes first-floor apartments more expensive.) Another way to keep prices down is to move away from the main tourist trail, although Venice is a small city and the difference will not be that great.

The island of Giudecca, about eight minutes by vaporetto from St Mark’s Square, is an up-and-coming area with some former warehouse conversions reminiscent of London’s Docklands. Sir Elton John is among several celebrities to have bought there.

The island boasts spectacular views of Venice across the water and has an airy feel that you don’t get in the narrow calle (alleyways) in the centre of the city. But prices are not that cheap here, either, and tourists may be reluctant to rent on the island, not least because it is almost completely dead in the evening.

If you really want more value for money, then try the island of Murano — a kind of replica mini-Venice, which lies on the way to the airport — or, further out, Burano, where it is still possible to find a decent-sized flat for as little as £150,000. Finding tenants here could be more difficult, though, which means that even in Venice, you can’t always have your cake and eat it.

On the market

A restored one-bedroom apartment near the Rialto for £330,000. Gabetti Venice, 00 39 348 612 4424, www.gabettivenezia.it

Near St Mark’s Square, this two-bed flat is for sale for £420,000. Venice Real Estate, 00 39 415 210 622, www.venicerealestate.it

Valerie du Monceau, 01242 243 693, www.ourveniceapartment.com

Read Peter Conradi’s weblog at www.timesonline.co.uk/overseasproperty

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