Placing cash in stone is more relevant than ever in these times of inflation. Here are the criteria sought by rental investors, according to a study.
Specializing in support for rental investment, the company Circuméo conducted a study to draw up a composite portrait of investors in France *.
The location
Real estate agents keep repeating these three golden rules over and over when looking to make a real estate investment: “Location, location and location!” Indeed, the success of such a project depends on the location of the property. According to the study, the address remains the number one criterion for investors.
Thus, 52% of French people who go into rental real estate buy properties in the inner city, 45% in the city center and only 3% on the outskirts.
Transport and shops
If investors target city centers as a priority, it is to meet the expectations of their tenants, mainly students and young workers. The latter seek to be close to shops, public transport, restaurants or even schools.
The big agglomerations
Rental investors tend to favor large cities to make their investment. They are indeed 52% to choose cities of more than 300,000 inhabitants such as Lyon, Bordeaux or Nantes. The remaining 48% do not target small towns, however, since they opt for agglomerations of 50,000 to 150,000 inhabitants, such as Chambéry.
It is about finding the right balance in terms of rental tension, rental yield and longer-term capital appreciation potential. Large cities thus make it easier to meet their expectations.
Small areas
Regarding the type of property, investors favor small furnished areas: 41% choose accommodation between 30 and 40 m², while 37% opt for properties of less than 30 m². Only 22% buy homes of more than 40 m².
Mostly furnished
Also according to this study, 78% of investors turn to furnished properties, while 22% prefer unfurnished properties. The reason: taxation is more advantageous when renting furnished accommodation. Indeed, the status of non-professional furnished lessor (LMNP) offers a tax deduction of 50% on rental income (compared to 30% for bare rented accommodation), or even more if you choose the real regime.
€150,000 average budget
According to the study, 44% of investors devote between €110,000 and €150,000 to their real estate project, 26% have a budget between €150,000 and €200,000, while 30% invest more than €200,000.
In terms of financing, they mobilize on average a contribution corresponding to 15% of the amount of the operation.
* Study conducted on 1,049 people from the Circuméo database
Comentários