Investing in rental property consists of buying a home to rent in order to receive additional income and build up assets. The investment can be optimised thanks to tax benefits that reduce income tax. Indeed, the legislator or the government authorizes tax deductions in return for a rental commitment. Any taxpayer who pays taxes can therefore benefit from adapted tax exemption solutions. 
The rental investment is the only investment that allows you to build up an asset financed on credit, of which the ¾ are paid by the tenant, the balance being paid by a tax saving and a reduced savings effort. Various rental investment programs exist, including the Malraux, Censi Bouvard and Pinel programs. Opting for a rental investment allows you to increase your assets smoothly and to benefit, once the purchase has been amortised, from an appreciable additional income. Provided you make the right choices.

Choose a buoyant geographical sector for your rental investment and study the market

Choose a city characterized by continuous population growth, a neighbourhood with good public transport links, a municipality with a commercial infrastructure, etc. Before buying a four-room apartment, for example, check the proximity of schools or even universities so that you can offer it for rent to a family or to shared students. Consult the advertisements to find out the vacancy rate in the chosen area and the rental rates. A property that is too expensive is harder to rent than another and its occupants leave it at the first opportunity. In addition, take into account the employment pool in the surrounding area and the large industries that may be located nearby because this can be a guarantee to rent your property. As in any rental property investment, the fundamental rule to follow is the strategic choice of the location of the property: it must be in a sector where rental demand is strong, the only way to make the investment sustainable in terms of occupancy and added value on resale. Compare the prospects for added value between regions, as they may be less attractive in certain areas where the price per m2 is already high at the time of acquisition.

Buying a home is above all an investment.

Do not involve your affect in the selection of your property. Indeed this one will not be your main residence and too much affection could make you lose sight of your primary objective: the search for a profitable investment. The selection of your property relieved of affect, you will multiply your chances that the housing pleases others and find more easily buyer ... The property must be rentable! Do not forget your objective: do not buy in a disaster area under the pretext of attractive prices! Visit the property before you buy, to see for yourself the situation of the property and the surrounding amenities!

Don't think too big and diversify your investments.

With a reduced contribution (10%) and a loan limited to 20 years, your monthly effort should remain low. Don't forget, however, that the price per square metre of small areas is higher when buying... but also when renting. This precaution combined with a diversification of investments allows you in case of problems, unpaid rents in particular, not to have put all your eggs in the same basket and therefore to manage the problem more easily. As far as real estate investment is concerned, remember that the capital gain is made on the purchase price and not on the resale price! It is therefore absolutely essential to buy well!

Don't look for excessive profitability and think of tax exemption instead.

Given the performance of conventional investments, a return of 3-4% is very appropriate. On the other hand, a real estate investment always increases in value over the long term. With the Pinel scheme, you will deduct part of your taxes over six, nine or twelve years: an interesting calculation, even if the rents of these dwellings, capped, are a little lower than average. The financial packages will then allow you to study interest rates, the different types of loans, to appeal to the different laws of real estate tax exemption, as well as to find the appropriate investment taking into account the possible hazards (especially in the investment in the old, work is often to be expected).

Select your tenant and your promoter

In order to find the "right" tenant who will pay his rent regularly and who will not damage the rented property, the landlord must ask for certain proofs to minimise the risks and make his choice with full knowledge of the facts. For a rent of less than a third of the income, you have the possibility to ask for a joint guarantee. In case of a shared flat, ask for a deposit for the entire rent from each participant ... having a maximum of guarantees is always better. On the side of the developer who sells the property, check its reputation, whether it complies with the standards in force and the rate of mixing of residences (the rule of 3/3 with 1/3 of the housing offered for investment, 1/3 in social housing and the remaining third in main residences).

Put your rental investment into management

Rental management is a service that falls within the competence of real estate agencies, notaries or trustees. It can be defined as all activities aimed at optimising the economic return on real estate assets. An agency will relieve you of the worries and procedures and will ensure much more efficiently than you, the recovery of possible debts. These advantages largely compensate for the fees it will charge you: 5 to 10% of the rents including charges. In addition, these fees are deductible from your property income.

Take out a guarantee

The Rental Guarantee is an insurance that guarantees the payment of the rents of your property. You are thus assured of a return on your investment. You must take out a rental guarantee for each property you wish to insure. You can opt for a classic unpaid rent insurance or the new universal rental risk guarantee (which can cover debts up to 70,000 € per dwelling, and damage up to 7,700 €). Contact an insurance company and plan to pay 1.5 to 2.5% of your rent.


Rental investment is an important step in the development of an estate. However, it is necessary to ensure that the right choices are made throughout the investment process to guarantee its profitability. In this way, the rental investment will be a guaranteed income supplement for you.