When it comes to real estate investment, big returns do not necessarily rhyme with a good plan. It is in any case the result of a study carried out by the company Bevouac, specialist in rental investment.
Do you want to get started in rental investment? Before buying a property, certain points must be taken into account. To ensure an income every month thanks to real estate, it is for example interesting to bet on a city where the gross return nevertheless seems less interesting than elsewhere. In any case, this is the result of a study carried out by Bevouac, a specialist in turnkey rental investment in old properties.
Thus, the five cities where the gross return is the highest (Pau, Bziers, Mulhouse, Perpignan and Avignon) are also those where the vacancy rate is the highest. Mulhouse for example, if the average gross rental yield was 10.40% in 2018, this is accompanied by a vacancy rate of 15.90%. However, a vacant home is a real problem for the investor which could have consequences on a possible repayment of credit. A high return is often the counterpart of an increased risk, notes the study.
Profitability more than gross return
Especially since, conversely, Cannes, Ajaccio, Mrignac, Pessac and Crteil, the five towns with the lowest vacancy rate, are also those with the lowest gross yield. (between 2.79% and 5.90%).
Bevouac therefore invites potential investors to take an interest not only in the gross yield but also in the profitability, which includes the capital gain discounts the resale good. For example, the Mrignac yield is only 3.36%, but vacancy is low (3.53%) and prices have climbed 55.5% over the past decade. An investment in Mrignac in 2013 would therefore have generated a low return, but an excellent final profitability, still calculated in the study.
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For rental investment, it is therefore better to pay attention to the location, and above all be patient.
First real estate purchase: rental investment or main residence?