Before investing, it is important to define your investment strategy: what type of investment? For which objectives? How many investment(s)? Rent furnished or unfurnished? These questions are essential to achieve an efficient rental investment. When defining the strategy, it is important to consider the possible rental yield. The return is all the more important as it is more difficult today to realize capital gains on resale. The rental yield depends on the cost price and the rents received, from which we will have removed the charges in order to have a precise result. However, the rents and the purchase price of the property depend on the market which varies according to the cities. The location of the apartment and the yield obtained will therefore be correlated.
It is important to know a little bit more about the cities offering a rental return interesting. This will help you make your choice. The prospect of not finding a tenant and therefore ending up with an empty unit should be very low. The location can therefore help to have a good return.
Net return
The calculation of the net rental yield will depend on many criteria that change depending on the location of the apartment. But how do you know where to make a good rental investment? Indicators can help investors: household income per city, demographics, net migration of the city, family structure, vacancy rate... All these data collected by INSEE are useful to investors and will give him information on the rental demand.
Some cities have a high vacancy rate, i.e. the proportion of empty housing is high. This is particularly true of Avignon, Vichy and Béziers. This indicates that the housing supply is not adjusted to the demand in the city. These cities are therefore not to be preferred if you want to buy to rent.
Urban planning
It is also essential to plan ahead, and to do this you need to look at another point: urban development projects. You can get information from the city hall to find out about public development projects such as transportation, new shops and office areas, and major facilities (sports, leisure, etc.). For example, buying an apartment near a future office zone or a new school can maximize your return.
Which city?
For a rental real estate investmentFor a rental property investment, you should preferably choose a city in which the demand for rental property is high. This is the case of the major French cities: Paris, Marseille, Lyon... The rental ratio of these cities is interesting because the rental demand is higher than the supply. However, the yields of apartments in Paris are often low because the sale prices of apartments are very high, so it is necessary to find a good deal for a good profitability.
However, a good profitability of rental investment is possible in each city, depending on the district and the chosen surface.
