Choosing the right property for a rental investment requires evaluating several essential factors: location, rental demand, tenant profiles, property size, layout, and potential return on investment. Studios, one-bedroom apartments, and family homes each offer different advantages depending on the local market. Before buying, investors should estimate potential rental income and account for all costs, including acquisition fees, renovations, condominium fees, taxes, financing, and rental vacancies. The Energy Performance Certificate (DPE), restrictions on renting energy-inefficient properties, and the condition of the condominium must also be considered. Finally, choosing between furnished and unfurnished rentals depends on investment goals and local tenant demand. A successful rental investment combines a reasonable purchase price, manageable expenses, and a property that meets tenants' expectations.
Buying an apartment to rent out can help generate additional income, build wealth, and prepare for the future. However, the success of a rental property investment depends primarily on choosing the right property.
Location, property type, rental demand, purchase price, potential rental income, renovations, energy performance, condominium fees... There are many factors to consider before making an offer. A property that looks attractive to buy is not necessarily a good rental investment: it must also meet future tenants' expectations and offer returns that align with your investment goals.
So, what type of property should you buy to rent out? Here are the main factors to consider when choosing a profitable apartment that will be easy to rent.
To make a successful rental investment, it is advisable to choose a property located in an area with strong rental demand, close to public transportation, shops, educational institutions, or employment centers. The property's size and layout should match the profile of potential tenants: students, young professionals, couples, families, or employees relocating for work. Before purchasing, it is also essential to estimate potential rental income and calculate profitability by considering the purchase price, notary fees, potential renovations, condominium fees, property taxes, financing costs, insurance, management fees, and the risk of rental vacancies.
The Energy Performance Certificate (DPE) has also become a determining factor: a poorly rated property may require significant renovations and, depending on its energy rating, may be subject to rental restrictions. The condition of the condominium, approved or upcoming renovation projects, and condominium regulations should also be reviewed.
Finally, choosing between furnished and unfurnished rentals affects rental income, taxation, lease terms, and the type of tenants you can attract. In major cities, university areas, and neighborhoods popular with professionals relocating for work, furnished rentals can benefit from particularly strong demand.
Before even starting your property search, it is important to clearly define your objectives.
Not all investors are looking for the same thing. Some primarily want to generate regular rental income, while others focus on building long-term wealth, preparing for retirement, or purchasing a property they may eventually want to use themselves.
Your investment strategy can therefore influence the type of property you should prioritize.
For example, a property in a highly sought-after area may have a high purchase price and a lower immediate rental yield, but benefit from strong tenant demand and attractive long-term appreciation potential. Conversely, a less expensive property may offer a higher theoretical return while carrying a greater risk of rental vacancies.
Before investing, define the following:
To explore this first step in more detail, read our guide to successfully planning your rental investment.
Lodgis Guide to Planning a Successful Rental InvestmentIn real estate, location remains one of the most important factors in a successful rental investment.
Before buying, it is not enough to compare prices per square meter. Above all, you need to make sure there is sufficient rental demand for the type of property you are considering.
Several factors can make an area attractive:
We also recommend taking the time to visit the neighborhood at different times of day. Noise levels, traffic, shops, lighting, the immediate surroundings of the building, and the general sense of safety can all significantly influence a property's attractiveness.
Even an apartment with excellent features can be difficult to rent if it does not meet the expectations of tenants in that particular area.
Conversely, a simpler property in a very good location may attract tenants quickly and help reduce vacancy periods.
To determine which apartment to buy as a rental investment, it can be useful to work backward: start by identifying the tenants who are most likely to live in the property.
In university neighborhoods, studios, small one-bedroom apartments, and shared housing can meet the needs of students. In business districts or well-connected neighborhoods, small and medium-sized furnished apartments may appeal to young professionals, expatriates, or employees relocating for work.
Families are more likely to look for properties with several bedrooms, storage space, nearby schools, and a residential environment.
This approach helps avoid a common mistake: buying a property based on your personal preferences rather than actual market demand.
Ask yourself:
Who is likely to rent this property? Why would they choose it over another?
If these questions are difficult to answer, you should probably investigate local rental demand more thoroughly before purchasing.
There is no ideal property size for every rental investment. Each type of property has its own advantages and limitations.
A studio apartment generally requires a more affordable initial investment and can benefit from strong demand in university towns and major cities.
Its rental yield may be attractive, but tenant turnover can be more frequent. It is therefore important to account for potential vacancy periods and the costs associated with finding new tenants.
A one-bedroom apartment often represents a good balance between purchase price, rental income, and tenant stability.
It can appeal to students, young professionals, couples, and employees relocating for work, providing access to a relatively broad tenant market.
Properties with several bedrooms may appeal to families but can also be suitable for shared housing when their layout and the local market allow it.
The purchase price is generally higher, but tenants may also stay for longer periods.
Ultimately, the best property type depends on the city, neighborhood, and profile of tenants in the local market.
Size is not everything. Two apartments with the same floor area can offer very different levels of rental appeal.
A well-designed layout makes better use of the available space and creates a more comfortable living environment.
Pay particular attention to:
In smaller apartments, every square meter counts.
For example, a well-designed 20 m² studio can be much more appealing than a slightly larger property where a significant portion of the space is occupied by a long hallway or areas that are difficult to furnish.
Before making an offer, it is essential to estimate how much rental income the property can realistically generate.
You should not build your financing plan solely around the rent advertised by the seller or a rough estimate.
Compare similar properties while considering:
Overestimating the rent can significantly distort profitability calculations and lead to longer vacancy periods.
The purchase price should never be assessed separately from potential rental income and the various expenses associated with the property.
The gross rental yield can be calculated using the following formula:
Gross rental yield = (annual rental income ÷ total acquisition cost) × 100
However, the acquisition cost is not limited to the advertised purchase price. To gain a more realistic understanding of your investment, you should also consider:
The highest return on paper does not necessarily mean the best investment.
An apartment with a slightly lower rental yield but strong tenant demand and limited renovation needs may perform better in the long term than a property offering a high gross yield but experiencing frequent vacancies.
Discover more tips for optimizing the profitability of your rental investment.
How to Optimize Your Rental Investment ReturnsThe Energy Performance Certificate (Diagnostic de Performance Énergétique, or DPE) has become an essential consideration when choosing a rental investment in France.
A poor energy rating can lead to significant renovation expenses and eventually restrict the property's eligibility for rental.
Since January 1, 2025, properties rated G have no longer met the minimum energy performance requirements for rental housing in mainland France. Properties rated F will be affected from 2028, followed by properties rated E from 2034.
Before purchasing, carefully review the DPE. For energy-inefficient properties, obtain estimates for the renovations needed to improve their performance.
The heating system should also be taken into account. Since January 1, 2026, the electricity conversion coefficient used in DPE calculations has been reduced, potentially improving the energy ratings of some electrically heated properties. Another change is scheduled for January 1, 2027.
You can read our guide to the new DPE regulations or explore solutions for properties with a G energy rating.
The cost of energy renovations must be included in your investment budget before making an offer.
Buying a property in excellent condition generally allows you to rent it out quickly after completing the purchase. It also helps avoid the administrative tasks and uncertainties associated with renovations, such as obtaining quotes, selecting contractors, overseeing the work, and dealing with potential delays.
However, an apartment requiring renovation can still represent an opportunity if its purchase price appropriately reflects the cost of the work.
Renovations can also help:
Before buying an apartment that requires significant renovation, it is advisable to have the work assessed by a professional.
You should also set aside a contingency budget for unexpected expenses. Underestimating renovation costs can quickly reduce the overall profitability of your investment.
Under the French actual-expense tax regime for furnished rentals, certain expenses may, depending on their nature and the owner's tax situation, be deductible or depreciated. To understand the differences, read our guide to deductible and depreciable renovation expenses for furnished rentals.
Guide to Deductible and Depreciable Renovation Expenses for Furnished RentalsWhen you buy an apartment, you are also investing in a building and its condominium association.
You should therefore look beyond the condition of the apartment itself.
Before purchasing, review:
An apartment offered at a particularly attractive price may become much less appealing if major roof repairs, facade renovations, or upgrades to the central heating system need to be financed shortly after purchase.
These expenses should be included in your overall investment calculations.
The type of rental you intend to offer can also influence which property you should buy.
Furnished rentals are particularly suited to students, young professionals, employees on temporary assignments, expatriates, and people looking for a move-in-ready home.
However, they require the property to be equipped with the legally required furniture and generally demand greater attention to interior layout and the quality of furnishings.
Unfurnished rentals often appeal to tenants who want to settle in for a longer period and bring their own furniture.
The choice therefore depends on the local market, property type, long-term investment strategy, and tax situation.
For a detailed comparison, read our guide: furnished vs. unfurnished rentals, which option should you choose?
Furnished vs. Unfurnished Rentals: Which Should You Choose?A rental investment project should be assessed as a whole. Several common mistakes can undermine its profitability.
The first is buying a property simply because the asking price seems attractive. An inexpensive apartment in an area with weak rental demand may remain vacant for long periods.
You should also avoid calculating profitability based solely on the purchase price and rental income. Expenses, taxes, renovation work, financing, and vacancy periods can significantly affect the actual return.
Do not overlook the DPE or the condition of the condominium. Poor energy efficiency or major shared renovation projects can result in thousands of euros in additional expenses.
Finally, do not overestimate potential rental income. Setting a rent that reflects the local market generally helps attract tenants faster and reduce vacancies.
There is no single ideal property for every investor.
The best investment is one that combines a reasonable purchase price, genuine rental demand, a market-appropriate rent, manageable expenses, and strong long-term rental potential.
Your decision should therefore be based on local market conditions rather than solely on the price per square meter or a theoretical rental yield.
For a furnished rental investment, it is particularly important to understand the expectations of tenants living in the city and neighborhood concerned.
With over 25 years of experience specializing in furnished rentals, Lodgis helps property owners maximize the appeal of their properties and rent them out in Paris and major cities throughout France.
Have you found a property you are considering buying? Get an estimate of its rental potential to make sure the rent you expect is consistent with actual market conditions.
What type of property is the most profitable to rent out?
No property type is systematically more profitable than another. Smaller apartments may offer attractive gross rental yields in university neighborhoods or major cities, while one-bedroom, two-bedroom, and family-sized properties may attract longer-term tenants. The best choice mainly depends on the relationship between the purchase price, potential rental income, and local rental demand.
What size property should you buy for a rental investment?
The property size should match the profile of your target tenants. A studio or one-bedroom apartment may be particularly suitable for students, young professionals, and people relocating for work, while a property with several bedrooms may appeal to families or be suitable for shared housing. Local demand should guide your decision.
How can you tell whether an apartment will be easy to rent?
Review similar rental listings, local rent levels, transportation options, nearby shops, educational institutions, employment centers, and the profile of neighborhood residents. A rental property professional can also help estimate potential rental income and assess the specific demand for the property.
What rental yield should you aim for?
There is no universal target rental yield. Returns should be assessed based on the city, level of risk, financing, taxation, potential property appreciation, and rental vacancy periods. It is generally better to focus on net profitability rather than comparing gross yields alone.
Should you buy an apartment that needs renovation to rent it out?
A property requiring renovation may allow you to purchase at a lower price and create additional value, provided that renovation expenses are accurately estimated before buying. The cost and duration of the work, as well as the period during which the property cannot be rented, must be included in the profitability calculation.
What DPE rating should you look for in a rental investment?
The better the energy performance rating, the lower the risk of having to carry out major energy renovations in the near future. Properties rated E, F, or G should be assessed particularly carefully given the regulatory timetable for minimum energy performance standards in rental housing. However, a less energy-efficient property can still represent an opportunity if its purchase price adequately reflects the cost of renovation.
Is it better to rent out a furnished or unfurnished property?
It depends on the property, local market, and owner's objectives. Furnished rentals can meet strong demand from students, young professionals, and people relocating for work, while benefiting from a specific French tax framework. Unfurnished rentals may be more suitable for tenants looking to settle in for longer periods. This decision should be made before purchasing so that you can choose a property that matches your investment strategy.
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