Already very active in the real estate market in 2019, the share of investors is not expected to weaken, according to experts, in the coming year. They observe the emergence of a new category of buyers.
In 2019, more than one in four purchases (27.2%) will be used for rental investments within our network. This is unprecedented! “Laurent Vimont, president of Century 21, proudly announces that one in three buyers in Paris wants to become a property owner to rent, according to network data, more than 1 in 4 in Rennes for the purchase of a house or apartment. “Rent control has no effect. In a city where fewer than 400 houses are built each year, they know they will eventually leave with extremely high added value.”
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A favorable environment for rental investments
All professionals share this enthusiasm, whether at L’Adresse or Orpi: “It is the interest rates that attract investors,” analyzes Christine Fumagalli, head of the Orpi network. The slight recovery at the end of the year should continue into 2020, but will not impact this clientele. Take a student city like Lille. When purchasing a 25 m² apartment, an investor with a non-contributory loan of 1% pays monthly repayments of €330 over 20 years. In this city, they can set their rent at €430. This way, they earn €100 while building wealth without having to use their personal savings.”
This is because, in this period of questioning retirement arrangements, real estate reassures the French who want to avoid housing costs in their old age. Moreover, as Jean Marc Torrollion, president of the National Federation of Real Estate Agents, assures us: “Real estate remains more than ever the best investment. Even in cities where prices are soaring, rental yields remain attractive, especially considering that the savings account of the Livret A, when looking at the preferred investments of the French, has a yield of 0.75% and euro funds from life insurance contracts were at 1.83% in 2018, a figure that is expected to decrease in 2019.”
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New category of buyers
This situation particularly benefits a new category of buyers: tenants in tight areas. “These are thirty-somethings who cannot become homeowners in cities like Paris or Lyon because the purchase price is too high. Rather than moving away, they prefer to turn to a strategic investment,” notes Brice Cardi, president of the l’Adresse network. Including a small area in a city where prices are still low but where the rental market is very dynamic, like Angers. “Others target municipalities soon to be crossed by the Grand Paris Express, like Vitry-sur-Seine, where prices are still below €4,500/m². We even see clients looking for large spaces for shared accommodation. They have already lived as roommates and have fond memories, or even still live that way.”
The ideal for these buyers is still to obtain… to turn to new properties, particularly through non-professional furnished rentals (LMNP) in Service Residences. “Student residences are on the rise for this category of investors. Prices are below €100,000, making them comfortable. Because when they invest, they not only have to pay their monthly payments but also their rent,” explains Paul Lassalle, commercial director France of Bouygues Immobilier Patrimoine. The hunt for the best investment is on!