Some cities are more profitable than others with a high potential for added value. But location is not the only key to a successful rental investment. BFM Immo advises you.
While it is on the rise, several cities have strong potential for making a rental investment in 2022. It is nevertheless recommended to prepare this project well by asking the right questions since this investment involves some financial risks, in particular damage. , rental vacancy or unpaid debts which can weigh heavily if they are not anticipated. The taxation of rental income is also a key element when you start. In addition, the rules for capping rents or the obligation to renovate thermal sieves must be taken into account by future landlords.
Is the key to success to entrust this investment to a manager or to take care of it alone? To bet on cities far from home or on the contrary to opt for cities an hour or two from home? Is the purchase price a guarantee of good profitability? Should we opt for an investment in Pinel law, rent bare in the old or furnished? Rental investment experts respond to BFM Immo to enlighten you according to your project on the cities with high potential for rental investment in 2022.
The impact of the purchase price on profitability
Soaring prices in major cities have an impact on the profitability of rental investments and some buyers no longer hesitate to move away to find more affordable prices. The purchase price has an impact on the profitability of this investment since it serves as the basis for calculating gross profitability
Formula for calculating gross profitability: (annual rent/purchase price) x 100
Note that the gross return is an interesting indicator, but you will still need to calculate the net return to get a more precise idea of the costs associated with this investment.
Formula for calculating net profitability: the annual rent – the costs and charges / the purchase price + the cost of the mortgage x 100
Finally, net-net profitability, that is to say as precise as possible, depends on your taxation and any tax deductions, especially if you invest under the Pinel law. So many elements to keep in mind before even choosing a city and a property.
Invest close to home or move away?
Once these calculation formulas are known, the location must be the number 1 criterion… And investors generally opt for towns close to their accommodation. However, the geographical barrier seems to be gradually disappearing.