Investing in Paris, a few tips for a successful investment
Should you invest in Paris?
Attractive both for tourists and for young graduates and employees, the French capital offers investors a unique real estate market. Future buyers, follow our guide to optimize the profitability of your investment in Paris.
The Parisian real estate market
With a cost per square meter greater than €10,000, the real estate market in Paris continues to see its prices increase. In this context, is it a good idea to invest in the City of Lights?
The regulation of rent prices
With rent controls, the profitability of a rental investment in Paris seems rather limited. Entered into force in August 2015, then paused between 2017 and 2019, the measure is now effective again. Thus, the rents set by the owners of Parisian housing cannot exceed certain thresholds. As a result, the rental yield in the French capital is lower than in cities with more than 100,000 inhabitants. Due to a higher purchase price, the average return is 2.5% gross annually compared to 6% for Nice.
Furnished second home leases or leases granted to companies are not subject to rent controls. This is an interesting approach that makes it possible to obtain average gross returns in Paris in excess of 3%.
Promising prospects
Despite rent controls, real estate investment in Paris still offers very good prospects. On the one hand, outdoor development projects, the preparation of the Olympic Games and the constant economic dynamism point to a bright future for the French capital. Thanks to its strong attractiveness, Paris is welcoming ever more potential tenants. So even if Parisian owners will not be able to rent their accommodation at a high price, renting is very easy and the rental void almost non-existent.
On the other hand, real estate investment in Paris is very interesting at the time of resale. With the increasing increase in prices per square meter, the added value achieved more than compensates for the lower rental yield.
The best neighborhoods to invest in Paris
Not all neighborhoods in Paris are created equal. From one district to another, prices per square meter can increase by almost 50%. In such a context, you have to think carefully where to invest in Paris. In addition to taking into account the purchase price, it is essential to study the dynamism of the neighborhood. As such, the boroughs combining intense activity and reasonable purchase prices are the 13th, 15th, 17th, 18th, 19th and 20th districts. For furnished rentals rented to companies, the following districts should be targeted: 7th, 8th, 9th, 15th, 16th, 17th.
Besides intramural Paris, some investors prefer to buy in the suburbs because of a lower purchase cost. The first ring is particularly interesting because the purchase prices are more than 20% lower than the prices in Paris. Annual gross returns for furnished rentals can easily exceed 4%. The prospects for capital gains on resale are as promising as in Paris. However, the more distant suburbs of Paris do not offer the same perspectives as the capital. Here, the rental yield is lower because of an even lower rent price and a greater risk of rental vacations. In addition, the increase in resale value is uncertain, since the price per square meter does not change as quickly.
The type of apartment to buy for a rental investment in Paris
If you want to rent your apartment in Paris easily, opt for small areas. Cheaper, this type of accommodation is particularly attractive to young graduates or students who have come to settle in the capital. However, every year, thousands of provincials find opportunities in the City of Lights. By investing in a studio or a 1-room apartment in a dynamic Parisian district, the rental void will be almost zero.
As for larger homes, they are certainly more expensive to rent, but the search for a tenant is longer. Indeed, the potential occupants of this type of property are often families. However, they are less mobile and less numerous than young graduates and students.
However, if you want to maximize your investment with this type of property, it is always possible to opt for shared accommodation. In this case, you have to be flexible, as tenants can change regularly.
If you are looking to invest in Paris, do not hesitate to contact us to tell us about your project.
Olivier was able to help us find the right property for us. He listened to us and was full of suggestions. His advice was invaluable at every stage of our search and right up to the negotiation of the property. A big thank you!
I embarked on the adventure of a first Parisian acquisition following an inheritance and in a context where the market was rather sluggish. I can only thank Olivier Lebé, who guided me for several months to refine my project until the acquisition of a very beautiful apartment in the 19th arrondissement. His ability to listen, his attentive support, his perfect knowledge of the real estate market and the neighborhood allowed me to embark on this first purchase with complete peace of mind. Excellent service is an investment, but peace of mind is well worth the price!
A big thank you to Patrick for his professionalism and efficiency! Thanks to his ability to listen and his perfect knowledge of the market, he was able to find the ideal property. Tailor-made support, sound advice and exemplary responsiveness. I highly recommend his services!
