Rental Investment : Homelikehome helps you find the perfect rental investment
Whether it’s a complement to retirement or a patrimonial asset, rental investment is on the rise. Due to the increase in the French population, the drop in the number of people per household, the aging of the population, the increase in single-parent households, etc… France currently experiences a lack of sufficient housing.
France suffers from a structural housing deficit. The need would be estimated at 395,000 new housing units per year. In 2030, taking into account the annual production of new housing, the deficit could reach 850,000 housing units.
Despite the gloomy real estate context, notaries have recorded an increase in the sale price of real estate of up to +5% in certain medium-sized towns in France such as Angers, Caen, Brest, Toulon, Rennes.
The Paris suburbs are not to be outdone with a fanfare starting around the Grand Paris Express.
How to define rental investment ?
Researching for rental investment is very different from looking for a primary residence.
At Homelike Home, with our experience since 2003, we are aware of the challenges when purchasing your home sweet home. For a rental investment, the affair is not the same. A rental investment follows rules for calculating profitability, where subjectivity has no place!
In this case, it is necessary to separate the long-term rental investment in concert with solid research that will yield a favorable rental return (often called rental profitability) and the desire to invest and expand one’s portfolio of assets with promising inheritable value.
What is the difference between yield and profitability ?
Profitability is a broader term than yield.
- The rental yield is the indicator of the performance of your real estate investment. It indicates what your investment brings you with regard torent over the year. It compares the sum of these rents with your initial acquisition cost.
It is calculated as a percentage according to this formula: (Monthly rent) x 12 x 100 / (acquisition cost)
Acquisition cost refers to the following variables :
- Acquisition price of the property (Agency Fees Included if there is one)
- The Homelike Home commission (2.9% on average)
- Notary fees (8% on average)
- Decoration, refreshment, or even repair work
Exemple of rental investment inNice :
| Purchase of an apartment in Nice | 225000 |
| Homelikehome’s commission (2.9%) | 6525 |
| Notary fees (8%) | 18000 |
| Extra work | 10000 |
| Cost of acquisition | 259525 |
| Location mensuelle hors charge | 970 |
| Gross rental yield in % | 4.49% |
The calculation of the gross rental yield looks like this : 970 x 12 / 259 525€ = 4.49%
Another example of rental investment in Villeurbanne (near the Doua campus in the Lyon suburbs):
100 m2 apartment on the 2nd floor of a luxury residence from the 1980s with a caretaker, elevator, and bicycle room.
The apartment is composed of 4 bedrooms, 2 shower rooms, 1 laundry room, 1 living room, 1 separate kitchen, and 2 balconies.
The apartment is set up for colocation/shared accommodation for 4 students.
| Purchase of an apartment in Villeurbanne | 305000 |
| Homelikehome’s commision Notaire (2.9%) | 8845 |
| Notary fees (8%) | 24400 |
| Extra work | 40000 |
| Gross Investment | 378245 |
| Monthly rent excluding charges | 2000 |
| Loan at 1.3% over 25 years | 355000 |
| Monthly loan payment excluding insurance | 1400 |
| personal down payment | 23245 |
| Gross rental yield in % | 6.34% |
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The rental profitability is calculated from the capital gain
By purchasing a property that is likely to increase in value in the future, you will obtain what is called capital gain.
Example: If we take another look at our investment in Nice, and the property has increased in value by €20,000 10 years after your acquisition, we will calculate the rental profitability as follows:
(970€ x 12 + 20 000€ /10) / 259 525 € = 5.3 %
You can then opt for different rental strategies depending on the property and its sector: colocation, coliving, airbnb, traditional rental property….
Our mission… is to find the best investments for you! Not only in Paris and its suburbs, but also in Aix en Provence, Bordeaux, Lille, Lyon, Marseille, Nice, Nantes, Bretagne, Normandie… and many other cities to come!
Homelike Home is here to guide and support you in the purchase of your future rental investment.
With each of our clients, we develop detailed portfolios with your specifications, and once the EXCLUSIVE RESEARCH MANDATE has been signed, a research officer from our team, specialized in the sector that interests you, conducts research across the entire market (agencies, individuals, etc.), and sorts the offer according to the criteria and carries out the visits.
Among all of these visits carried out, your research manager will select the relevant properties, which meet your specifications. These properties will be the subject of a visit report which you will find on your dedicated customer blog.
For the selected properties, your researcher will also send you all the documents and information they can obtain to help you plan and make the purchase offer at the right price. Even if the real estate market has been a little turbulent in recent months, good investment properties sell very quickly, and often on the first visit!
Homelike Home takes care of everything: study of the co-ownership regulations, analysis of the diagnostics, and in particular of the Energy Performance Diagnosis (DPE), and the last 3 items on the agenda of the general meeting, contacting notaries, estimate of the rent at which you could rent your future apartment, but also house for shared rental…
Homelikehome studies all the documents necessary for your rental investment in complete security…All you have to do is contact us from the comfort of your own couch, and let yourself be guided!
