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investment rental

The rental investment is booming, some buy to enjoy a foothold in the most beautiful capitals of the world: Paris, New York, London, Rome ... and sublet during their absence, just to repay the expenses of building and other fees or taxes. Other investment directly in real estate as security for the asset class offers, and under leases to make a rental income, often very advantageous tax.

It leaseback investment that we'll mention here.
The principle is simple, but the objective case must meet a combination of three factors:


  • 1. Well, its size, arrangement.

  • 2. The purchase price, the choice of neighborhood and the cost of any credit.

  • 3. The type of tenancy and tenant

The property

Its purchase price and location are closely related, our experience has shown us that the paramount consideration in choosing a property, the purchase price and sometimes the feeling of having done a good deal more chooses to have "good neighborhood".

The purchase price

Illustrate by example an investment in Paris, quick, easy, safe and unfortunately unprofitable:

An apartment in Saint Germain , rather small, less than 20m2, to rent to students.
This is most likely a studio near the Sorbonne , Paris, or a rental in 5th bought at a minimum 10,000 euros per m2, and that is rented in the 800 euro / month or 1000 euro, since it is convenient to rounding.
With an unsecured loan at 4.5% APR negotiated in 2010 (at a great rate then), we find, for a studio of 20 m2, resolve:

15-year loan:
With no input => Monthly payment of 1,530 euros.

Ready in 20 years:
With no input => Monthly from 1265 euros.

Ready in 30 years:
With no input => Monthly 1013 euros.

With a loan over 30 years, we come to cover his rent, and ignoring taxes, housing taxes, notary fees due to the acquisition of the property, and beautification efforts or development, it becomes easy to understand that such an investment is not optimal.

For housing, debt of nearly half his life is devastating but unfortunately sometimes necessary, in respect of an investor, we must do better:

For our example, we are staying in Paris, one of the most visited places in the world, and very affectionate investors for its reputation as a city of love.

If we consider investing in Paris, the questions to ask are:

1. What area most profitable for short term rentals

The city's most profitable to rent a furnished apartment is the top of the 3rd district, above the streets of Britain, including the area around the clock (not highly valued by the Parisians but ideal location for holidays), Eastern 2nd district, near the Grands Boulevards 9th, and 10th near the Canal Saint Martin (the famous pictures of Amelie Poulin have already driven up the price per m2),

Give details on neighborhoods or invest and streets:


    In the 3rd
  • :

  • Vertbois Street, Rue Notre Dame de Nazareth, Tracy Street, Rue Sainte Apolline, Rue d'Aboukir, Rue de Clery, Rue Vaucanson, (which are small streets around the Arts and Crafts), and it stops here , do not go north of Boulevard St. Martin.
    In the 2nd
  • :

  • Bouloi street, Rue du Louvre, Rue de Richelieu, rue Louis Le Grand, Street Bank, and Quartier Montorgueil. Be careful not to venture around the Rue de la Lune (Area of prostitutes)
  • 9th:

  • Ideally located in the block bounded on the south by bd Poissonni√®re north by the Rue de Chabrol, west by the Poisson Fb, and east along the Rue du Faubourg Saint Denis.
  • In the 10th:

  • To the east of the Gare de L'Est and Boulevard Magenta.

2. What type of apartment and the surface

Several possibilities can be distinguished:
Your objective is the smallest surface layer the maximum of people:

Suppose a 30m2 who sleeps 4 people (1 double bed + 1 sofa bed), typically a large studio with a mezzanine, or a tiny two parts. We can find 25-35 m2.
Imagine also a 9m2 for 2 people (sleeping uncomfortable) and the toilet.

These are the two most rapidly acquire, build and rent.

3. How to manage your property?

If you're there, you can simply post an ad on various sites like Viarentals.com or pap.fr and manage your availability online, from your place of work or vacation!

By joining these three points, we come across properties:

Expected Result

35m2 for 4 persons, paid 7,000 euros per m2 for a cost of credit of around 1600 euros per month and rented through agencies like Paristay or Viarentals rental for an average of 800 euros per week.
Considering occupancy rates average 70% (which is easily reachable with a simple but pleasant decor and economic such as "Ikea"), you'll end up with real estate income of 2300 euros gross per month (20 days per month rent ).

3. The type of tenancy and tenant

The choice of tenant is very important globally in Paris and in France. The laws protect tenants who are enormously expellable very difficult, as the rent is paid or not.
This is historically feared to homeowners who are increasingly demanding about their choice of tenant. And time has harden the phenomenon.
Today, it is requested to complete financial records that dares to look for accommodation in Paris. As the owner, here are ideal candidates:

1. The student, with his parents to bail. A surety is usually signed by parents who offer better guarantees. In addition, students, daughter or son of, do not often squat.
2. The tourists, they have tickets round trip and do not seek to stay put. As the Financial Guarantee, they usually pay in advance, so enjoy. This class of tenant offers the best value.
3. Then, the couple enjoying comfortable incomes official, government service for a lifetime, they are very hard and removable revenue growth is at least equal to inflation.
4. A professional, whose housing is paid by a company installed. The company guarantees are often a good asset, and the risk of squatting is also virtually zero.

If you pair solution No. 2 at very economical websites that you drain a sufficient traffic as Viarentals that you manage the customer relationship its reception and monitoring: (emails, payments, housekeeping, maintenance) you get the best possible returns.

In France, you will be taxed at a maximum of 50% on such income, and if you are a professional furnished rental, you will enjoy tax deductions so important that you create the deficit by cashing any property income, and therefore without paying taxes. The furnished apartment is indeed regarded as a niche tax in France .

Good investment.


 
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