France consistently holds a leading position among the world’s tourist destinations, attracting millions of visitors annually. In this regard, the issue of purchasing real estate for rent in France remains relevant for many investors. Is it worth buying profitable real estate in this country in 2024, based on current market data and forecasts, said Nadezhda Molina, director of a real estate agency in France.
The market for profitable real estate in France is stable and characterized by high demand, especially in large cities such as Paris, Lyon, Nice and Bordeaux. Possible rental income can vary significantly depending on the economic situation and the tourist season
.
Paris
The capital of France invariably attracts tourists and businessmen. The cost per square meter in central areas can reach €10,000 and above, and rental rates range from €2,000 to €5,000 per month. Due to the Olympic Games in 2024, a significant increase in demand for short-term rentals is expected, which could lead to a 250% increase in rental rates.
Investors should pay attention to areas such as Saint-Germain-des-Pres, the surroundings of the Louvre and the Bastille. Apartments in these areas offer a good balance between the cost of purchase and rental income potential.
Lyon
Lyon, one of the largest cities in France, is also attractive to investors. The cost per square meter in the city center is approximately €6,000—€7,000, and rental rates for furnished apartments range from €600 to €900 per month.
Lyon is famous for its cultural heritage and significant educational and business centers, which ensures stable demand for long-term rentals.
Nice
Nice, a popular resort on the Cote d’Azur, attracts tourists with its mild climate and beautiful beaches. The cost per square meter in the center of Nice is approximately €7000—€8,500, and the rent of a furnished apartment is from €1,450 to €2,500 per month. During the summer season, rental rates can rise to €4,000 per month, which makes Nice attractive for short-term investments.
Bordeaux and Toulouse
Bordeaux and Toulouse are also of interest to investors. In the center of Bordeaux, the cost per square meter is €5,500—€6,500, and rental rates range from €700 to €1,500 per month. Toulouse, known as the “Pink City”, offers apartments for €4,000—€5,500 per square meter with rents from €590 to €1,200 per month.
These cities are famous for their cultural and educational centers, which ensures stable demand for long-term rentals.
Taxes and legal aspects
Investing in French real estate is accompanied by certain tax and legal obligations. Owners are required to pay property tax (taxe foncière), tax on rental income and, upon sale, tax on profits from the sale of real estate.
French law also protects the rights of tenants, which can create certain difficulties for owners. For example, short-term rentals in some areas of Paris are limited and all rental contracts must be registered.
Recommendations for the selection of real estate
For a successful investment, it is important to take into account the location and type of real estate. In the central areas of large cities, housing prices are high, but rental income will be appropriate. Prices are lower on the outskirts and in new buildings, but the demand for short-term rentals may also be lower.
Consideration of new renovation projects within cities can offer opportunities for capital investments with the potential for value growth. For example, in Paris, these may be areas undergoing renovation and modernization.
In which district is it better to live in Paris? A guide to the safest and most dangerous areas of the world’s fashion capital
Risks for foreign buyers
Among those:
- Strict laws governing the rental of real estate in France, especially short-term through platforms such as Airbnb. Some regions may require special licenses for renting out real estate.
- Protection of tenants by French law, which may make it difficult to evict or change the terms of the lease. This is especially important to consider when renting for a long time.
- Possible legislative changes. For example, a change in the taxation of rental income or the introduction of new regulations limiting the possibilities for renting out housing.
- Currency fluctuations. Buying a property in France means investing in euros. Currency fluctuations can affect the total cost of investments and rental income, especially if the income is converted to another currency.
- Unexpected expenses for the maintenance of real estate. For example, property taxes, utility bills, repair and management costs can significantly increase total costs.
Examples of calculating profitability for Paris
Purchase price: €600,000 for a 50 m2 apartment in the central area.
Annual rental income at a rental rate of €2,500 per month: €2,500 * 12 = €30,000.
Annual expenses:
- Property tax: €1,500.
- Management company: 10% of rental income = €3,000.
- Utility bills and maintenance: €2500.
- Total: €1500 + €3000 + €2500 = €7000.
Net income: €30,000 — €7000 = €23,000.
Profitability (ROI): (€23,000 / €600,000) * 100 = 3,8%.
Comparison of short-term and long-term rental properties in France
When investing in real estate in France in order to generate income, it is important to understand the differences between short-term and long-term rentals. Each type of lease has its advantages and disadvantages, which can significantly affect the profitability and risks for the investor.
Short-term rental
Advantages
- High income. Short-term rentals, especially in tourist-friendly locations, can generate significantly more income compared to long-term rentals. For example, rental rates during peak tourist seasons can be several times higher than in normal months.
- Flexibility. Investors often have the opportunity to adjust rental rates depending on demand and seasonality. This allows you to maximize income during periods of high demand, such as holidays and summer holidays.
- Control over property. The frequent change of tenants allows owners to regularly check the condition of the property and carry out the necessary maintenance.
Disadvantages
- Legal norms. In France, especially in large cities, there are strict rules for short-term rentals. For example, in Paris, there are restrictions on the number of days during which housing can be rented on a short-term basis, and registration of such activities is required.
- High operating costs. Short-term rentals require more time and effort to manage the property, including cleaning, checking in and evicting tenants, as well as marketing and advertising.
- Inconstancy of income. Incomes can vary significantly depending on the season and the level of tourist flow. During lean periods, income may decrease, which requires careful planning and financial reserve.
Long-term rental
Advantages
- Stable income. A long-term lease provides stable and predictable income throughout the lease term. This makes it easier to plan a budget and forecast financial flows.
- Less operating expenses. Managing a long-term lease requires less effort and time compared to a short-term lease. There is no need for frequent tenant changes, regular cleaning and marketing.
- Legal protection. Long-term leases are regulated by detailed legislation, which ensures the protection of the rights of both the tenant and the landlord. This reduces the risk of conflicts and unforeseen situations.
Disadvantages
- The yield is lower. In most cases, rental rates for long-term rentals are lower than for short-term rentals, which can lead to a decrease in total real estate income.
- Less flexibility. Long-term leases are usually concluded for a year or more, which limits the possibility of changing rental rates and terms of the contract. This may become a problem if market conditions change.
- Legal difficulties. French law strongly protects the rights of tenants, which can create difficulties in evicting unscrupulous tenants or changing the terms of the lease. In some cases, the eviction process may take several months.
Buying profitable real estate in France in 2024 may be a profitable investment, especially in light of the upcoming Olympic Games and stable rental demand. However, investors need to carefully analyze the market, take into account all tax and legal aspects, as well as choose real estate with high income potential. A balanced approach and attention to detail will help you maximize the benefits of investing in profitable real estate in France.
Author
Yulia Yanukovych Editor-in-Chief
I am responsible for the work of the editorial office. I write expert interviews and guides.
English 
Russian 
German 
Polish