To know the rental profitability of a property, it is necessary to calculate the ratio between its purchase price and the rent collected. This makes it possible to know if it is advantageous to invest in such a good to draw an income from it. In France, potential rental yields are very different from one city to another. Indeed, prices per square meter and rents will vary greatly from one place to another. It is therefore important to choose the place where you are going to invest. Discover in this guide all the information you need to know about rental yield and the best places to get started in France.
What is meant by rental yield?
When you want to invest in investments for your savings, you need an indicator to know the interests of these. In general, we use the annual net rate of return to check whether an investment is wise or not. This lets you know how much an investment earns over a year after deducting fees, taxes and duties.
As part of a rental investment, it is the rents excluding charges that will generate the net income. To obtain the gross rental rate of return, the total gross rents must be compared to the purchase price or the current value of the dwelling. To obtain the rental profitability of the property, it is then necessary to deduct all the charges incurred such as insurance and management costs as well as all taxes and social security contributions.
Keep in mind that there is often a big difference between net profitability and gross profitability. the rate of return on a rental property can range, in fact, from 6% gross to 2% net depending on your level of taxation and the structure of your investment.
In which cities to make a rental investment?
As a general rule, you have to flee expensive cities to hope to benefit from a good rental yield. Indeed, in cities where prices per square meter are skyrocketing, rental amounts do not often follow the same skyrocketing. This is valid in all cities of France. To make sure you make the right choice, you can go to sites like https://ca.ou-buy-idf.fr/, which allow you to search for real estate to quickly and easily find a property that matches your needs. expectations.
Here are cities which, due to their very attractive prices and their dynamism, are ideal for investing in rental property.
Bordeaux
Average price per m²: €4,170
Rent per square meter: €13.6
Short and long term rentals are in high demand in Bordeaux.
Thanks to its booming wine industry, Bordeaux attracts hordes of international investors and is a very popular place for short and long term rentals. The city center and the Quartier Saint-Michel present an excellent investment opportunity. This bustling square is a welcoming mix of markets and cafes, boutiques and cultural hangouts, built around the magnificent Gothic Basilica of Saint Michael.
In addition to its rich heritage and renowned gastronomic offer, Bordeaux benefits from excellent connections with the capital, just two hours away, thanks to the new TGV Océane line.
Montpellier
Average price per m²: €2,630
Rent per square meter: €14
A young and dynamic city in the South, Montpellier is ideal for renting thanks to the large student population that lives there, as well as the countless holidaymakers who flock to the region. With its Mediterranean climate, good transport links and proximity to the sea, this buzzing city is regularly voted the best place to live and work in France. Moreover, it is more affordable than Paris, Lyon and Nice. With its top universities, numerous beach and water sports activities, not to mention its charming squares and bars and restaurants, it is a versatile city particularly conducive to a real estate investment for rental.
Nice
Average price per m²: €2,630
Rent per square meter: €14
An essential city on the Côte d’Azur and second tourist destination in France after Paris, Nice is by nature an expensive region and rich in investment potential. Try the Vieille Ville for renting apartments, the historic heart of the city is a magnet for travelers looking for the epitome of French charm. Baroque architecture, winding alleys, open-air markets and restaurants are an integral part of life in Nice. The Riviera is in many ways an investor’s paradise, as in just ten weeks at the height of summer, rental apartment owners can easily earn as much as if they rented long-term for twelve months.
Toulouse
Average price per m²: €2,680
Rent per square meter: €12.8
With the Canal du Midi and the Garonne flowing through the city centre, Toulouse has a fascinating history and residents who are full of joie de vivre. Latin influences and a culture of outdoor living and late dining lend a perpetual vacation feeling. Furthermore, the city is also a thriving educational and economic center.
Home to Europe’s space and aeronautical hubs, Toulouse attracts a cosmopolitan population of workers who not only prefer renting, and therefore provide a constant flow of tenants, but also tend to integrate well. The average monthly rent for a one-bedroom apartment in Toulouse is 596 euros.
Paris
Average price per m²: €9,610
Rent per square meter: €26.2
Despite the high price per square meter, Paris remains at the top of the list among the most sought-after places to rent and is therefore an interesting place to invest. According to studies, 21% of rentals in France are located in Île-de-France, mainly concentrated in the capital.
Life in Paris is a wonderful whirlwind of activity: cafés, exhibitions (many of which are free and not just for students), concerts, cultural events, metro rides and walks along the Seine. As the most visited city in the world, Paris has a very popular real estate market both for residents and investors.
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