Rental real estate: in which cities to invest with the device Denormandie?
The top 20 cities in which it is interesting to invest with the new property tax system Denormandie.
The Denormandie device
The Denormandie device is a new tax device for rental investment in the old real estate. It is for investors who want to buy an existing property to rent it. They can deduct from their income tax between 12% and 21% of their investment, depending on whether they rent their property for 6, 9 or 12 years. To benefit from this tax deduction, they must realize an amount of works representing 25% of the total of the operation, within the limit of 300 000 euros. The work must be billed by a company. The system works in territories where needs are identified and applies "to housing located in the center of municipalities whose need for rehabilitation of housing in the city center is particularly marked."
The Denormandie device would be profitable for 70% of the eligible cities, for an acceptable risk-taking
BestAgents, a specialist in online real estate valuation, studied the profitability of a Denormandie investment and the associated risks, taking into account the cost of borrowing in all metropolitan cities eligible for the scheme (214 cities).
To determine the most interesting investments, MeilleurAgents has put itself in the situation of an individual wishing to invest € 100,000 today. For each city, have been determined:
- the profitability of the investment: it takes into account the total cost of the property (price + works), rental income (depending on the local market, rent ceilings by zone, and the size of the property), annuity payments the loan and the annual tax reduction.
- the risks related to the rental of the property (amplitude of the local rental demand – population corresponding to the ceiling of resources, share of tenants, number of vacant dwellings and HLM) and the depreciation of the good (demographic growth, economic dynamism and evolution of the local real estate market)
The indicators studied made it possible to isolate the cities presenting both a positive profitability and a low risk factor.
The study shows that 70% of metropolitan cities concerned by the scheme have a positive return and a risk profile that makes an investment worthwhile.
The study also shows that the interest of the device is closely linked to the ability of the investor to finance with his own liquidity. In the top 20 most attractive cities, for an investment of € 100,000, the returns without borrowing range between 6.2% and 9.8% and between 0.4% and 2.6% with borrowing.
In any case, MeilleurAgents recommends investing in a city in its region and that is well known: "the ability of the investor to undertake quickly work is essential to be able to rent a property within a short period of time. renovated. And it is important to have a good idea of the local market to rent at the right price, "says Thomas Lefebvre, Scientific Director at MeilleursAgents.
The top 20 most attractive cities to invest with the Denormandie device
The 20 most attractive cities are concentrated mainly in Bourgogne-Franche-Comté, New Aquitaine and Grand-Est (4 cities per region). Limoges, Corbeil-Essonnes and Sarrebourg stand out as the 3 most attractive cities.
|City||Region||Rent / M²||Price M²||Profitability cash investment||Profitability investment loan|
|Limoges||Limousin||€ 9.92||$ 1,234||9.3%||2.0%|
|Evry||Ile-de-France||€ 15.05||$ 2,205||8.2%||2.0%|
|Sarrebourg||Lorraine||€ 8.04||940 €||9.8%||2.0%|
|Marmande||Aquitaine||€ 8.29||$ 1,065||9.1%||2.6%|
|Cognac||Poitou-Charentes||€ 8.32||$ 1,084||9.0%||2.1%|
|Toul||Lorraine||€ 8.31||$ 1,077||9.0%||2.1%|
|Mulhouse||Alsace||€ 9.74||$ 1,155||9.7%||2.5%|
|Chalon-sur-Saône||Burgundy||€ 8.39||$ 1,117||8.8%||2.5%|
|Angoulême||Poitou-Charentes||€ 8.49||$ 1,169||8.6%||2.0%|
|Sarreguemines||Lorraine||€ 8.28||€ 1,060||9.1%||2.5%|
|Laval||Pays de la Loire||€ 8.76||$ 1,303||8.1%||1.3%|
|Bressuire||Poitou-Charentes||€ 8.42||$ 1,134||8.7%||1.3%|
|Pontivy||Britain||€ 8.57||$ 1,209||8.4%||1.9%|
|Saint-Quentin||Picardie||€ 8.06||953 €||9.7%||3.0%|
|Lunel||Languedoc-Roussillon||€ 10.87||$ 1,648||7.9%||1.2%|
|Figeac||Midi-Pyrenees||€ 6.69||$ 1,271||8.2%||1.5%|
|Valenciennes||Nord Pas de Calais||€ 10.97||$ 1,693||7.8%||1.8%|
|Agen||Aquitaine||€ 8.61||$ 1,227||8.3%||1.6%|
|Niort||Poitou-Charentes||€ 8.74||$ 1,295||8.1%||1.4%|
|mende||Languedoc-Roussillon||€ 8.76||$ 1,306||8.1%||1.6%|