Furnished rentals, a way to make your real estate investment profitable?

With the saturation of the real estate market in some cities, furnished rentals seem a better solution. Investors who wish to build up real estate assets are facing this phenomenon in metropolitan France… But also see how heavily taxed real estate investment is. Indeed, it is one of the most impacted sectors. Also, for some investors, and with the eyes of experts, furnished rental investment seems an interesting solution to limit this impact. A small shift, in a market where demand never slows down.

Furnished rentals, a solution to study

Embarking on the transformation of a bare dwelling into a furnished rental is not achieved in a short time. Indeed, it is first necessary to study its feasibility… And interest. In a large city like Bordeaux, or Paris, where demand is very high, this solution seems the most suitable. In medium-sized cities, this trend is also beginning to evolve, as a result of the pandemic. But it seems less useful in smaller towns, away from businesses and schools.

In addition, there are also two different regimes: professional furnished rental company, and not professional. Before embarking, it is therefore essential to study all aspects of such an investment. Because offering a furnished rental does not depend (only) on the initial investment to acquire walls. In addition to seeing if the chosen city lends itself to furnished rentals, the renter must also see if he is able to develop his housing.

For this, it must refer to the co-ownership regulations, which indicate what the owners can do or not. Can the owner dismember the property if the accommodation is rented furnished? Do I need specific administrative permissions to be in good standing? These different points vary from one city to another, from one residence to another. An in-depth study upstream then makes it possible to get started by being certain of his approach.

Room rental bed furniture
Furnished rentals and flatshares are multiplying in metropolitan France.

Become a professional rental company, conditions to be set

A furnished rental rental company must seriously study the steps before transforming a property. What makes a rental furnished are especially the furniture. Some are mandatory in the accommodation, otherwise it is not considered furnished. The objective is that the tenant only has to take his personal belongings to settle.

A furnished rental company can obtain the status of professional under certain conditions. The value of income related to rents must be greater than € 23,000 annually, and be higher than other income. If previously the furnished rental rental company had to be registered with the RCS to be recognized as a professional, this is no longer the case.

If the annual rental income is higher than € 72,600, or € 176,200 for classified guest rooms and furnished tourism, renters have the choice to adopt two separate tax regimes.

The micro BIC allows a flat-rate allowance of 50%. However, the lessor can not deduct his real expenses such as property tax, condominium fees. Nor can it be in deficit of its furnished rental.

The second is the real regime. It is obligatorily applied when the thresholds of annual rental income are crossed. It makes it possible to deduct expenses and amortize real estate and furniture. For experts, this is the most advantageous solution. Indeed, the net income then reaches 73% of the rents collected, against only 42% with traditional land income.

Sources:

The furnished flatshare to optimize its real estate heritage. Press release Walter France published on November 9, 2021

Dismemberment: Understanding all about property dismemberment – Estate – Financial investment Investment Best Rate

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