Investing in rental properties, an increasingly intricate endeavor.
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 decreased by 50%. This is the most drastic drop 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 a 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 consider the full amount of rental income that the operation can generate, and the examination of the file then shows excessive 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 exemption schemes like Pinel, which made investing in new properties attractive, have become less interesting in recent years due to more restrictive conditions, particularly a focus on larger cities. During the heyday of Pinel, approximately one out of every two properties was purchased for rental investment. This is no longer the case currently. Moreover, Pinel is expected to be phased out by the end of 2024 and, currently, there are no plans to replace it with another scheme.
Faites attention aux “prix affichés”.
Furthermore, the vast majority of investors now understand that significant renovations may be necessary 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 carried out, the home will be considered indecent and must be removed from rental between 2025 and 2034. Between seven and eight million homes would be affected. When buying an older property with the intention of renting, one must often be prepared to carry out 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 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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