Investing in real estate can pay off, but you still have to know where to get the right deal. Purchase prices, rents, risks of default and vacancy… a study by Studapart, an online student accommodation reservation platform, reveals in which cities and districts investors can find the best opportunities. The specialist advises furnished rentals, which are popular with students.
1. Paris, security before profitability
Despite a slight slowdown in prices in 2021, the gross rate of return is average in the capital, at 5.2%. Investing in Paris is still a safe bet because of the extremely strong demand from tenants.
The housing shortage persists and the risk of vacancy is almost zero. The default rate is reasonable. It is equivalent to the national average of 1.3%.
Studapart recommends betting on districts with lower property prices and high demand such as the 18th, 19th and 20th centuries. A booming “golden triangle” which attracts young people in particular, thanks to attractive rents and a pleasant living environment a stone’s throw from emblematic places such as Montmartre, the Buttes-Chaumont …
2. Bordeaux, a quality of life that attracts tenants
If investing in Bordeaux requires a significant contribution, the “sleeping beauty” is the third most expensive city in France. It takes an average of € 120,000 for a 20 m2 studio. The fairly high rents make it possible to obtain an interesting gross rate of return of 6.6% on average for a studio.
The rental tension is very high and the risk of default is below the national average.
Studapart recommends investing in the Chartrons, Capucins and Saint-Michel districts, which appeal to a strong student community. The surroundings of the station, under construction, are also interesting for investing in new.
3. Lille, a profitable city at the crossroads of Europe
Lille is ideal for investing thanks to the presence of a large number of students in demand for furnished accommodation. Despite an increase in real estate prices in recent years and the rent control in force since 2020, gross profitability remains attractive with a rate of 6.2%.
The default rate, slightly lower than the national average, is rather low. A downside: since the health crisis, the housing supply is lacking.
According to Studapart, the center, and in particular the surroundings of Lille Flandres and TGV Europe, offers a better rental yield than in the Vieux-Lille district. The Vauban district, to the east of the city, guarantees strong student demand. The Bois Blanc eco-district, attractive to young people and a real nest for start-ups, is also an interesting choice.
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4. Nantes, in the spotlight since the health crisis
Demand from tenants is not weakening in Nantes, especially since the Covid-19 epidemic. And the city attracts investors. Consequence: prices have increased. For a 20 m2 studio, you have to spend between € 100,000 and € 120,000 on average. The gross rental profitability of 6.1% still makes the investment worthwhile.
Being slightly below the national average, the delinquency rate also plays in Nantes’ favor.
According to Studapart, the city center offers good rental profitability. Student demand is particularly strong. Other popular districts: Saint-Félix and the Petit Port, Île de Nantes, which should host the future CHU in 2022, and Malakoff.
5. Toulouse, to capture a student audience
The city attracts around 20,000 new inhabitants per year, many of them students and young working people. Thanks to reasonable purchase prices, gross rental profitability is strong in Toulouse, ie 6.4%.
Rental tension is just as strong there, with around 6 times more requests than offers of furnished accommodation on average. But this demand varies significantly from one neighborhood to another.
Studapart advises to look in the neighborhoods close to the center and more affordable, Compans-Caffarelli, Canal du Midi or Ponts-Jumeaux. Also close to the center, Saint-Michel and Saint-Agne are very popular with tenants.
6. Rennes, the most attractive city in Brittany
Rennes’ biggest asset is its very low risk of vacancy. House prices have risen sharply this year, but they have not been followed by the same increase in rents. The gross rental yield of 5.6% is still attractive.
For better profitability than in the city center, Studapart suggests looking towards the Beaulieu district, eccentric to the east but concentrating several campuses and stormed by students, just like Villejean-Beauregard, in the north- Where is. The station district, at the heart of the Euro-Rennes project, – the city’s future business district -, should attract many tenants.
7. Marseille, affordable prices
With its purchase prices more than reasonable – on average € 90,000 for a small studio – the city also shows good gross profitability of 6.6%.
The risk of vacancy for a small apartment or one-bedroom apartment is low, but the risk of non-payment is slightly higher than in the rest of France.
According to Studapart, each district of Marseille should be studied as a micro-market. The 4th arrondissement has a still strong demand for furnished accommodation and a lower risk of default. La Joliette, a new business district renovated in a modern style, is ideal for attracting young workers. Good to know: the 9th arrondissement has a high concentration of students. In the working-class district of the 3rd arrondissement, it is possible to find inexpensive accommodation that ensures high profitability.
8. Grenoble, the fair price of real estate
Between low purchase prices (a studio costs 80,000 €) and a student city and economically dynamic, Grenoble has it all. The gross rate of return is 7.2%.
The percentage of delinquencies is slightly lower than the national average, but the risk of rental vacancy is the highest in the ranking due to the difference between supply and demand for furnished accommodation (only 1.3 times more requests) .
Studapart advises the hyper-center of Grenoble and the Île-Verte district. Ideally located, close to the CHU, medical and pharmacy universities, the area is very attractive to tenants. To the south of the city center, the districts of La Capuche and La Bajatière are ideal for investing in furnished accommodation of a small surface area because they are less expensive and popular with some of the students. The Europole business district is also a good choice which guarantees a high rental demand.
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