An old apartment in a good location, purchased at the right price, can become a money pit if the energy performance diagnosis shows a G label. Since January 1, 2025, properties classified as G+ can no longer be rented out. Investing in real estate in 2024 and beyond means first ensuring that you can actually rent the targeted property without incurring heavy renovation costs right from the signing.
Energy label and rental investment: the filter before purchase
There are still attractive listings on paper, with enticing gross yields, for properties classified as F or G. The regulatory timeline is clear: after G+ properties have been banned from rental since January 2025, G and then F classified homes will follow. Buying an energy-intensive property without budgeting for insulation, replacing windows, or upgrading the heating system means incorporating a risk of rental vacancy from the start.
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In practice, it is recommended to request the DPE even before the first visit. If the property is rated F, you should estimate the renovation costs with a certified contractor and ensure that the amount does not turn the profitability negative. A property rated D or E, even slightly more expensive to purchase, often offers better medium-term visibility.
Specialized resources help frame this type of project: on the Conseil Invest website, you can find tools to compare real estate investment strategies based on each buyer’s profile.
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Mortgage rates in 2025: what banks really require
The average rates for new home loans have fallen below 3.5% in 2025, after peaking around 4% at the end of 2023. The easing is real, but it masks a tightening of lending criteria that complicates life for first-time investors.
Banks strictly apply the maximum debt ratio of 35%. They require more personal contribution and favor profiles with permanent contracts and seniority. For rental investment, forecast rental income is only considered up to 70% in the debt calculation, which mechanically reduces borrowing capacity.
What this changes in practice: you can no longer count on financing at 110% as was common a few years ago. Planning a contribution that covers at least the notary fees (and ideally part of the price) becomes the norm. Without this contribution, the application is often rejected or comes with unfavorable conditions.
Simulate before searching for a property
You save time by going through a broker or a borrowing capacity simulator before visiting. This allows you to set a realistic budget and avoid positioning yourself on a property out of reach. The amount of monthly payments, the loan duration, and the remaining disposable income should be clearly outlined before any purchase offer.
Rental profitability: calculate net yield, not gross
The majority of investment listings highlight a gross yield. This figure does not reflect the reality of what you will actually receive. The net yield includes property tax, condominium fees, insurance, and rental vacancy.
Here are the items to systematically deduct from the annual gross rent to get an accurate picture:
- Property tax, which varies greatly from one municipality to another and can represent one to two months of rent in certain medium-sized cities
- Non-recoverable condominium fees (facade work, roofing, elevator), often underestimated at the time of purchase
- Management fees if delegated to an agency, usually between 6 and 8% of collected rents
- Provision for rental vacancy and unpaid rents, typically set at one month of rent per year
Once these items are deducted, a property listed at 7% gross can drop below 4% net. This is not prohibitive, but it changes the amortization period and the relevance of the investment compared to other placements like SCPI.
Choice of tax status: LMNP, SCI or classic property regime
The status under which you hold the property directly affects the taxation of rental income. Opinions vary on this point, as the best status depends on the amount of rent, overall wealth, and transmission strategy.
The LMNP (non-professional furnished rental) regime remains popular for furnished rentals. It allows for accounting depreciation of the property and furniture, significantly reducing taxable income for several years. In return, it requires more rigorous accounting and a switch to the real regime.
The SCI under corporate tax (IS) is more suitable for investors who want to capitalize income within the structure without distributing it immediately. It also facilitates the transfer of shares. The downside: the capital gain on resale is calculated on the net accounting value, which can generate heavy taxation after several years of depreciation.
Real property regime
For unfurnished rentals, the real property regime allows for the deduction of loan interest, renovation costs, and charges. When significant work needs to be done in the early years, this regime generates a property deficit that can be offset against global income, within the limits set by tax regulations. This mechanism is particularly useful for old properties requiring energy renovation.
A well-structured rental real estate investment relies on three concrete arbitrations: the energy quality of the property, the actual financing capacity, and the tax status suited to one’s situation. Neglecting any of these parameters is enough to turn a seemingly profitable operation on paper into a source of financial stress for years.