Real estate investment in France : have you already thinked about that ? France is a really attractive country in all point of view : his history, his culture, his art of living… but it’s also a great opportunity in real estate investment.
Let’s take a step back: France is the world’s leading tourist destination, the 7th largest economy in the world and one of the most powerful countries in Europe. But above all, France is known throughout the world for its exceptional architectural heritage, rich history and gastronomy. All these aspects give it a still exceptional reputation today, and continues to attract tourists and investors alike.
To make a real estate investment in France a success, we must take into account the specificities of the French market. Here we answer all your questions about a real estate investment in France !
Why invest in real estate in France ?
As we have seen, France still has a very positive image around the world. In addition to this exceptional attractiveness, it also benefits from other assets that make a real estate investment very interesting. Real estate investments in France represent 10% of total investments in Europe. In addition, Paris is the European city most sought after by investors. Since the announcement of the Brexit English side, the influx of investors in France and especially in Paris is growing. But what are the other reasons?
Economic growth has returned to Europe
After years of economic crisis, Europe is finally experiencing a very significant return of growth. The economic context has never been so good for investing. France is consolidating every week his position as a global economic power and leader of the European market.
French governement encourage investors
To encourage people to invest in real estate, the French government has put in place various interesting features. By investing in real estate in France, you can benefit to interesting fiscal advantages. The Pinel law, for example, entitles you to very attractive tax cuts, up to 21%. By investing in real estate in France, in addition to generating additional income and perennial, you will pay less taxes.
Interest rates are very low
Interest rates in France are today at a historically low level. This is the perfect time to borrow money. The advantage of a rental investment is that it allows you to finance almost all of your property with a loan. You become the owner with the bank money. The amounts generated each month by your tenants repaid your credit : this is the leverage effect.
Real estate Investment for regular income !
In addition to these specificities of the French market, let us recall the advantages of real estate investment in a general way :
- It’s a protection against inflation
- You receive regular additional income
- You pass on wealth to your family
- You capitalize for your retirement
Non-resident investing in real estate in France : is it possible ?
Ok, so we saw why it was interesting to invest in real estate in France. But concretely, can a non-resident invest in France? The answer is yes: it is absolutely possible for a non-resident to invest in France. With lower acquisition costs and a more advantageous tax in France, it’s even a very interesting operation. Indeed, the number of non-resident investors has been increasing steadily over the last 10 years.
How to invest in real estate in France ?
To succeed in your real estate investment, you will first of all have to study the French real estate market. Thus, you will be able to detect the best investment opportunity.
Where invest in real estate in France ?
For a rental investment in France, choose large cities where rental demand is very strong. The major French cities that stand out by the dynamism of their real estate market are Paris, Bordeaux, Lyon and Nantes. By investing in major French cities, you avoid the risk of vacancy.
Moving in Paris
Paris, capital of France, is also the most attractive city in Europe. Charged with history and exceptional architectural heritage, its fame is legendary. It is the city most in demand by non-resident foreign investors. It is also one of the most expensive cities in Europe: count on average 10,000 euros per square meter. It is a very expensive investment, but you will have no trouble renting your apartment in this city where rental demand continues to explode.
Moving in Lyon
Lyon, with 500,000 inhabitants, is the third most populous city in France. Ideally located 2 hours from Paris by train, near Italy and the Alps, this city is still very attractive. It is also a very important student city and his job market always attracts more people. Investing in Lyon is a excellent real estate investment.
Moving in Nantes
Economic lung of the west of France, Nantes, ideally located between the ocean and the French capital, has excellent assets. Continuing population growth over the past 10 years has pushed home prices up. Very popular with students and executives, the rental demand has never been stronger. By investing in Nantes, you will have no trouble renting your apartment.
Moving in Bordeaux
Bordeaux is the symbol of French art de vivre. Known worldwide for the quality of theses wines, it enjoys an ideal location, between the sea, the mountains of the Pyrenees, and connected to 2 hours from Paris by train. This extraordinary attractiveness has exploded property prices, making it today the second most expensive city in France
Where is the best rental yield in France ?
The average rental yield in France is between 3 and 5%. However, this peccentage varies from one city and region to another. The best rental yield in France is located in Saint-Étienne, near Lyon, at 9.11% rental yield. However, this percentage hides a reality: for 50 years, the population of Saint-Etienne continues to decline. Real estate prices are very low, which explains the strong rental profitability. However, there is a long-term risk: many homes remain vacant. In addition, the price of real estate may continue to decline over time.
The percentage of rental yield can therefore be misleading: a city where the rental yield is often a sign of greater risk taking. We recommend that you invest more in the big French cities: you will take a lot less risk!