France is one of the most beautiful countries in Europe and is known for its rich history and cuisine. But what people don’t think about when it comes to France is its lavish real estate. France is slowly rising for its landscape, and more and more people are starting to invest in the local real estate market. So, without further ado, let’s dive into this blog and learn some of the reasons why you should invest in France‘s real estate market.
1. The tax advantages of the LMNP
The non-professional furnished rental (LMNP) is probably the most advantageous tax system for expatriates. It offers exciting rates of return and especially important tax advantages. To register in this scheme, it is necessary to acquire a new or old property and equip it with the furniture necessary for the tenant’s daily life.
The rental income must not exceed 23 000 €/year. However, all expenses related to the property (work, management fees…), depreciation, and especially the property’s purchase price are deductible from income. The idea is, therefore, to create a deficit in order to benefit from a limitation of the taxation on your rental income. And of course, a furnished property can be rented at a higher price and more quickly.
2. A historically low loan rate
Both French residents and expatriates have access to very favorable borrowing rates. In France, they have been falling steadily for months. In addition, some French banks such as BRED or BNP no longer hesitate to grant loans to expatriates.
However, they still need to be reassured, and this is normal. They are more demanding on non-resident files. This is why it is essential to be accompanied by a broker specialized in this type of financing in order to obtain the best possible conditions.
3. A dynamic and profitable real estate market
Real estate is therefore doing quite well. In France, the volume of sales increased by 3.6% in 2018, and the average price per square meter rose by 0.9%. The rental market is booming in some areas of France. This is particularly the case in the Paris region, where rental investments are reaching record levels.
With attractive profitability even in the most expensive cities, rental investment is an opportunity to expand one’s assets in France. For buyers, it’s all about responsiveness! As the most profitable programs sell out very quickly, it is necessary to have a good preparation and, in particular, to measure one’s financial capacities.
4. Remote management, without having to travel
Real estate has entered a phase of digitalization: online property search, digital brokers, remote visits, electronic signatures. Processes have evolved, and it is now very easy to carry out a real estate project in France while living thousands of miles away.
5. A secure investment
Stone is a safe investment, and we will not stop repeating it! The real estate market in France is stable, and the rental investment is the investment that certainly has the best security-return ratio. This is even more true for expatriates who have to deal with the specificities of their host country.
If many investments come from our British neighbors, it is also because it secures their capital. In the UK, for example, the pound sterling has lost a quarter of its value since 2016. For investors, a different problem in Dubai is that the real estate market is unstable where French properties are steadily increasing in value.
Therefore, investing in French real estate is an efficient way to secure your savings. Diversifying one’s assets is a guarantee to face the potential economic risks linked to the different host countries of our expatriates.
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