Increasing rental profitability: 6 tips in 2024

Tip 1: exempt yourself from taxation in LMNP

To date, non-professional furnished rentals (LMNP) are the most advantageous tax niche for real estate investors in rentals. Indeed, the main advantages that will allow you to maximize your rental profitability are numerous:

• The ease of setting up, it is not necessary to create a company to benefit from this LMNP status. A tax declaration is sufficient. Support from an expert (accountant or other) may be necessary during the first year.
• Possibility to choose between the Micro diet (50% discount) and the Real regime particularly interesting in case you have made works, we'll come back to that later in this article.

Tip 2: choose the right type of rental in LMNP

Concretely, it's about furnishing your real estate. You will thus equip your furnished rental with beds, sofas, appliances and kitchen utensils, among others. You will then have the choice between 3 main types of rental:

• Classic furnished contract : it is about renting your house or apartment with a furnished rental contract, for a renewable period of one year. Each month you will receive a rent on the part of your tenant and will be required to provide him with a rent receipt. This is the type of rental contract that is most similar to a Naked location. The Real estate yield is more interesting than a traditional rental, but it is not the most advantageous in LMNP.
• The roommate : in a single or individual contract, the profitability here is higher than in a classic furnished contract. Your apartment will of course have to be suitable in order to accommodate at least 3 roommates in order to be profitable. Colocation offers today are more and more complete, offering “turnkey” to roommates with a rent including water, electricity, internet... This is a type of contract that is very much in demand by students, the location of your investment will be a criterion for success.
• Short-term rental : you will offer your housing To the seasonal rental, per night or per week. It is the most profitable type of rental, which can exceed 10% net, but it is also the most time-consuming. Indeed, you will have to welcome travelers, manage reservations, clean up after departures. It is possible to delegate all or some of these tasks, depending on your financial and personal goals. Again, the location of your property will play an important role in order to have a good profitability in furnished rentals.

Tip 3: carry out work and renovate

As an investor looking for profitability, avoid properties that have already been renovated and favorites. In fact, the properties that offer the most financial advantages are those that need to be renovated. To do this, you will need to surround yourself with trustworthy and competent artisans. The advantages of doing work are as follows:

• prix Of purchase more interesting: you will get your property at a lower price considering its condition, compared to a refurbished property.
• Creation of real estate value (capital gain): it is very likely that in the event of resale, you will make a real estate gain thanks to the work carried out. In this case, it is the regime of capital gains for individuals that applies, which is more fiscally advantageous.
• Tax exemption: the work will be taken into account in your tax return in order to Exemnize tax. Carefully keep the invoices of the artisans as well as of your material purchases. This sometimes makes it possible to have expenses greater than income and to completely exempt taxes.
• Renting your home more expensive: a beautiful apartment, well renovated and carefully decorated, will have more appeal. You can expect rental returns higher.

Tip 4: deduct expenses and expenses

In order tooptimize profitability From your furnished rental, you can deduct a variety of costs and expenses. This is in particular possible thanks to the LMNP status. You will thus be able to deduct:

• Condominium fees
• Housing maintenance and cleaning expenses
• Depreciation of real estate investments as well as those of certain furniture, especially household appliances;
• Renovation and development work;
• Energy bills, internet subscriptions or television and series bills;
• Insurance and credit interests (see below).

This list is not exhaustive, you may be able to deduct other expenses related to rental management of your apartment which will increase the real estate yield even more (concierge fees, accounting, consumables...).

Tip 5: renegotiate your credit and insurance

You can increase the profitability of your furnished rental at any time by renegotiating your insurance contracts as well as your mortgage. As an owner, you must subscribe to a non-occupant homeowner insurance, and sometimes to a tenant insurance or specific to short-term rentals. This represents A budget not negligible. The same applies to your mortgage, for which it would be interesting to renegotiate either the interest rate or the term. Although it is not always easy in practice, do not hesitate to discuss it with your banker. The new regulations make it easier to negotiate mortgage insurance. In any case, renegotiating or involving the competition allows you to earn tens, or even a few hundred euros per year. It is also possible to do repurchase of real estate credit for rental investment.

Tip 6: Separate the parking lot from the lease

Last tip to optimize your rental investment : value Investment in car parks, storage places (cellars) and increase the value of the rent. The rent changes according to the market prices in the sector. Keep up to date with this evolution by monitoring the rental prices of properties similar to yours. Also, take inflation into account, because rental prices follow the course of inflation. Finally, car parks, garages and cellars can be rented very well in some towns. Whether you acquired them with or separately from your apartment, separating them in order to offer them for rent will also allow you to increase your rental yield.

In conclusion

The possibilities to optimize its rental profitability are numerous. La furnished rental is undoubtedly the most interesting. LMNP status allows you to take advantage of tax advantages whether you own a small apartment or a house. A profitable investor is an informed investor who knows the tips listed here in order to implement them in practice.