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Rental Property: the furnished property market is always more profitable

Studios Paris Blog

Rental Property: the furnished property market is always more profitable

In the old or retirement perspective, building, the long-term investment by definition, must occupy a leading position. The ideal scenario is when you buy a rental property around the age of 45, with a credit repayable over 15 to 17 years: you thus end up paying the property when you leave the workforce, the rents received then playing the pension supplements.

In the meantime, as permitted by law, if you opt for the "real" tax system, you will have deducted loan interest from the rents collected, but also insurance, property taxes, management fees and all property rehabilitation work, reducing your income tax each year. With credit rates historically low (less than 1.50% over 15 years), this is the right time to start!


Think of furnished rentals, annual rates of return can reach 7%


Not only are old homes cheaper than new ones (by about 25%), they offer much higher rental yields, especially if you buy a property for renovation that you rent under the "furnished" category. Certainly, in this case, you will have to spend a little more money on basic equipment (table, bed, chairs, wardrobe, crockery, television, hi-fi system...) and your tenants will change more often, which will require more availability than in traditional rental. But if you choose your property carefully, you will receive rents much higher than the norm, enough to get between 5 and 7% return per year.


And this return will not be reduced by taxes, thanks to the golden taxation of the furnished property: it allows you to amortize each year from your taxable rents the price of the walls (up to 3.33%) and that of the furniture (up to 10%), in addition to the charges and expenses usually deductible (credit interest, work performed, insurance...). And thus to avoid the taxation of rents collected over several years.

New

The success of the project depends more on the location of the property than on the proposed tax system


New furniture can also offer attractive income prospects. For a turnkey formula, target service residences for foreign clients who are well positioned or students.


Contact us if you have any questions about the taxation of a furnished apartment in Paris and its profitability: contact@studiosparis.net 

+33 1 42 59 43 05


 


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