Buying to rent, an increasingly complex operation.
Have the good days of rental investment come to an end? The companies that offer this type of program to individuals are certainly not happy. “The demand for projects has dropped by 50%. This is the most drastic decline in the past twenty years,” laments Stéphane van Huffel, CEO of Netinvestissement and Leemo. Although there are no official figures regarding the number of people buying to rent, real estate professionals usually estimate that it represents one-third of purchases.
Premier frein à l’investissement locatif : la difficulté d’obtenir un crédit pour financer l’opération. Même en période faste pour les crédits immobiliers, les banques étaient déjà réticentes à accéder à la demande des emprunteurs qui voulaient acheter pour louer.
With the increase in interest rates, the situation has become even more complicated. “Banks do not take into account the total amount of rent that the operation can generate, and the examination of the file then shows a too high debt, especially if the buyer is still repaying their primary residence,” explains Pierre-Emmanuel Jus, deputy director of Maslow, a specialist in rental investment.
Second brake: tax reduction schemes like Pinel, which made investing in new properties attractive, have become less appealing in recent years due to more restrictive conditions, particularly a focus on larger cities. During the heyday of Pinel, about one in two properties were purchased for rental investment purposes. This is no longer the case. Pinel is also set to disappear by the end of 2024, and currently, there are no plans for a replacement scheme.
Faites attention aux prix affichés en façade.
Furthermore, the vast majority of investors now understand that significant renovations may be required if the rented property is energy-intensive. Properties rated E, F, or G in the mandatory energy performance diagnosis (DPE) when renting will need to be renovated.
If the work is not done, the home will be considered indecent and must be taken off the rental market between 2025 and 2034. Between seven and eight million homes would be affected. When buying an older property with the intention of renting it out, one must often be prepared to do renovations and have the means to do so. “Be careful to include the cost of renovations in the proposed price if the energy performance certificate is rated E, F, or G. Some properties for sale have attractive prices on the surface, but a significant amount must be added for renovations,” warns Renaud Cormier, president of the French Rental Property Association.
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