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Special feature

In our special feature, we take you through the buy-to-let process in Paris. If you have any questions on this subject, please feel free to contact us for further advice.

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Buying to let in Paris

(This article appeared in French Magazine, Issue 9, November/December 2002)

An independent French professional finder of Parisian homes, Marie-Pierre Saint-Martin lives in London, where she runs her business, London Paris Dream Home. In this article, she shares her tips on buying an apartment to let out in France's lively capital.

Renting out country houses may be popular with foreign buyers, but those looking to buy a rental investment should, as Marie-Pierre Saint-Martin argues, also consider flats in Paris.

While renting country properties to holidaymakers is all the rage with foreign buyers, buying a property to let out in Paris has a number of advantages that should make it an interesting proposition too, not just the fact that Parisian apartments cost half as much as flats in London. Classified into 20 arrondissements, Paris has plenty of variety and choice for those looking for a rental investment in the country. When buying to let here, as with anywhere, the key things to consider are pricing, location, architectural style, methods of letting, types of tenant and obtaining a mortgage.

As far as pricing is concerned, Paris caters equally well for both buyers with a high disposable income and those on a more basic budget. In Paris, as in other French cities, property details more often than not give the overall surface area in square metres, which helps buyers judge the value they are getting for their money. Usually, a one-bedroom apartment will measure 40 to 45 square metres, one with two bedrooms roughly 60, while one with three bedrooms around 80 to 90. The average price per square metre of a Parisian pad is, currently, about £2,200. With prices starting at around £1,800 per square metre, the 10th, 11th and 19th arrondissements therefore present good value. At the other end of the scale, in the most exclusive areas, such as place des Vosges or Ile-Saint-Louis, expect to pay up to £10,000 per square metre.

For a lively atmosphere, bustling with bars and shops, try the trendy rue Oberkampf or the increasingly smart Marais. Alternatively, the 16th arrondissement and some parts of the 12th provide a quieter, more residential setting. No matter which arrondissement you choose, you will have a wide range of architectural styles typical of the city to choose from. Of course, as far as foreign buyers are concerned, the most appealing is the typical Parisian or Haussmannian style, whose decorative stone buildings feature large windows with wooden shutters and ironwork balconies. Inside you'll find parquet flooring, fireplaces and cornices. There are also plenty of modern blocks, with balconies, lots of light, lifts and underground parking. The best of both worlds, perhaps, can be provided by modern, renovated apartments in old Haussmannian blocks.

The city is extremely short of rented accommodation, so apartments need never stand empty and owners should have a wide choice of prospective tenants, all armed with good references and a reliable track record. The risk of getting a bad tenant is quite low. While well-paid professionals make ideal tenants, long-term students also constitute a lucrative and reliable target group. An apartment in almost any area of Paris will attract student renters, because higher education establishments in the French capital don't tend to offer on-campus student accommodation.

Both the immediate and long-term financial rewards are impressive. The gross rental yield on property is running between five and eight percent. A property costing £100,000 and rented out at £500 per month, for example, would represent a gross yield of six percent per annum.

This is an attractive profit level, even after deducting the costs of council tax, maintenance and a fee for any management agent involved. In addition to the rental yield, healthy capital gains should be expected. Prices are currently rising by about 10 percent a year.

Before actually purchasing a property, you need to think about how you are going to let it out, as this will affect the area you finally choose and how you let it out. Most properties in Paris are let out unfurnished, where the landlord signs a three-year contract with the tenant. This is usually the best option for buyers who are looking to use the apartment later in life, when they retire, for instance, rather than only intending to stay there in their holidays or at weekends. Alternatively, those wanting to use the apartment themselves from time to time might prefer to let it out furnished on a six-month contract, or even on a short-term basis, from two days to several weeks. In this case, it should be decorated and furnished to suit the needs of the potential tenants. Buyers looking to let their apartment for shorter periods should choose a location that will appeal to the tenants they are looking to attract. If they are interested in letting to tourists, for example, they should opt for an area such as the Latin Quarter in the 5th arrondissement, Montmartre in the 18th or the very smart 6th. If, however, they would prefer to rent to corporate tenants, they should buy a property in a business zone such as the 8th arrondissement, not far from the Champs-Elysées.

Finally, financing a property in Paris is usually a fairly straightforward process. Mortgages can be arranged either through a UK bank or building society, or a French bank in Paris or London. Mortgages in France are calculated on the basis that the monthly repayment should not exceed one-third of the buyer's monthly income. However, when a buyer is intending to let a property out, mortgage providers sometimes take the rental income into account, so it can be possible to borrow a little more to make that important rental investment.

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