Letting should bring a 5% return

1 September 2014
By Connexion journalist

DESPITE the property letting market slowing due to uncertainty over the new Loi Alur, there is still scope for improvement due to a slump in first-time house sales.

Observatoire Crédit Logement noted that although interest rates were historically low – averaging 2.8% – those on modest incomes were finding they could not raise a deposit to make the first move onto the property ladder.

That leaves rental/location – which is 20% of the property market – where investors and owners can get a return on property in in-demand areas.

Rentals need to offer a return of more than 5% to beat assurance vie and the stock market.

Sites such as LocService.fr offer comparison meters showing rental demand against supply and can also give indications of likely rental values.

The 5% is after set costs such as insurance and local taxes but not income tax/social charges.

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