Student accommodation is often the preferred option for a rental investment with a small budget. However, it is better to select large cities with a large student population to secure your investment. The turnkey rental investment platform Beanstock has identified 12 major student cities where this type of investment is attractive based on three indicators: the number of students and their share of the population, the net profitability for a studio and the budget. minimum necessary to invest.
This study takes into account furnished studios and the minimum budget includes the purchase price with notary fees as well as the cost of work and furnishings, without forgetting a flat rate of 7.2% of the price (with a minimum of €10,000) collected by Beanstock. This package includes the search for the property, the negotiation, the search for financing, assistance with the architectural design and monitoring of the work and 1 year of rental management. The rate of return corresponds to net rents less property tax, divided by this overall budget, taking into account an average area of 20 m² in the provinces and 15 m² in Paris. The taxation of property income is not applied but it could be reduced here for an investor opting for the LMNP status (non-professional furnished rental company).
Rouen and Marseille at the top
This ranking consecrates Rouen as the most accessible city for small envelopes with a budget from only €85,000, but also the most profitable of student cities with a rate of 4.5%. This profitability is associated with the high proportion of students in Rouen: 45,000 for 110,000 inhabitants. The second major city advised by Beanstock is Marseille. “Even if prices have increased and there is more and more demand for fewer and fewer offers, Marseille still offers excellent investment opportunities,” explains the platform. The very good profitability displayed (4.5%) coupled with a pool of more than 70,000 students attract investors. In terms of budget, it takes an average of €100,000 all-inclusive for a furnished studio.
Paris has the largest pool of students
With 450,000 students studying in the capital, Paris has the largest pool of students in France. Despite high prices per m², small Parisian studios are around 140,000 € and can reach 4% profitability precisely because of a smaller average surface area than studios in the provinces.
Other major student cities include Lille (4.2% profitability for an average budget of €100,000), Bordeaux (4.25% profitability for an average budget of €130,000), Rennes (4.2% profitability for an average budget of €105,000) or Toulouse (4.1% profitability for an average budget of €125,000).
Lyon in retreat
The lowest yield in this study is in Lyon (3.45%) which is suffering from rising prices and rent controls, in force since November 1, 2021, qualified as more severe than in Paris. The investment budget, also high with a minimum of €140,000, complicates student rental investments in the capital of Gaul.
” There is still time to invest in student accommodation which can be put on the market from the start of the school year in September. Choosing the right location is essential: your property must be able to be rented and meet rental demand. This is why the proposed towns have a significant rental demand and good potential for added value or even possibilities of self-financing. For this, it will be necessary to rent its furnished property in order to maximize its profitability. commented Alexandre Fitussi, co-founder of Beanstock.
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