Investing in real estate in France: good plan or bad idea?

Like most non-resident French people, you have wondered about the idea of investing in real estate in France and are hesitating? This article answers your questions!

Investing in France: a patrimonial choice

Property prices in France are rising steadily and 2017 was a good year for homeowners with + 5.70% in Paris. And this good performance of the real estate market can be explained as much by the good health of the French economy, which has recovered with the arrival of President Emmanuel Macron, as by the interest of the French for their favourite investment.

The French, whether residents or non-residents, are very attached to stone.

And many dream of investing in rental real estate in order to earn rent. Private lessors represent 2.8 million French people (source INSEE), and not surprisingly, the highest socio-professional categories are over-represented.

Investing in France means choosing a country with a sustainable and dynamic economy. The arrival of Emmanuel Macron as President of the Republic has brought a wind of hope across borders.

The leverage effect of credit: a good plan for expatriates

One of the interests of real estate is to be able to invest with a bank loan. This is called credit leverage.

The logic is simple: you buy a property with the money from the bank, and the tenant pays back the loan with the rent. Every month, your assets increase thanks to the repayment of the credit. Too good to be true?

Yet if you bring 25% of the amount of the project, you will carry out a blank operation. Every month, the credit will be covered by the rent. That’s why most of our clients renew the investment as much as possible after a first operation.  And France has serious financial advantages. Borrowing rates are very low (1.50% on average over 20 years). Expatriates also have the possibility of borrowing to carry out their projects. And the tax system is very attractive for furnished rentals. Indeed, income from furnished rentals is not taxed for the first 10 years or so thanks to the real LMNP.

Is investing in England a good idea?
How to invest in real estate?