Today, in large cities and medium-sized towns in France, the demand for rental accommodation is higher than the supply. Households with modest incomes are often those who find it the hardest to find a house or an apartment insofar as the price of rents is high. It is for this reason that the State decided in 2015 to favor investors in rental real estate.
The Pinel law establishes an advantageous tax regime for people who buy housing intended to be rented out. This makes it possible to meet the high rental demand in very specific areas. These are defined by law. Currently, the areas eligible for investments under the Pinel law are areas A and B1. Developers such as VINCI Immobilier have set up programs to build new residences near town centres, amenities, transport, universities or economic centers for students and young workers who meet the income requirements. Developers are also building on the outskirts of major cities for those who wish to get away from an urban setting or who work in the suburbs. Tenants will be able to benefit from accommodation ranging from studios to T5, at a reasonable rent. Indeed, depending on the area, the amount of rent is capped by law.
Investing in rental property offers many advantages for landlords.
Investing in new rental property or in service residences allows you to reduce part of your income taxes thanks to several advantageous legislative measures. Indeed, with the Pinel law , until December 31, 2021 , buyers of new housing intended for rental will be able to deduct a percentage of their taxes depending on the duration of the rental:
For an investment within the limit of 300,000 euros per year, this saves up to 63,000 euros in income tax.
With the Censi-Bouvard law , investment in housing in serviced residences saves up to 11% in income tax over 9 years for a maximum investment of 300,000 euros. If you agree to rent the property for 10 years, you can also recover VAT if you meet the income conditions.
The other advantage of investing in real estate for rental is that you can generate additional income. This rent can be immediate if one has the capacity to invest directly . On the other hand, if this is not the case, it will be necessary to apply for a mortgage. The rents collected will be used to repay the installments of the loan initially and will eventually become additional income. This is what makes investing in rental property ideal for workers who wish to provide additional income for retirement.