Increase Your Rental Yield in France: 6 Tips for 2026

Updated on 30 July 2026

To increase the profitability of a rental property investment in France, you need to optimise your taxation (LMNP), carry out targeted renovations, deduct your expenses, renegotiate your loan, and make the most of every part of the property, such as a parking space. This article details 6 practical tips to optimise a rental real estate investment in 2026, whether you already own the property or are still in the buying phase.

Key takeaways

• LMNP status lets you choose between a flat-rate allowance (micro-BIC) and the actual deduction of expenses and depreciation.
• Since the 2025 Finance Act, unclassified short-term tourist rentals only get a 30% allowance, compared with 50% for standard furnished lets.
• Renovations lower the purchase price and increase deductible expenses, but their depreciation is added back into the capital gain if the property is resold after 15 February 2025.
• Renegotiating your mortgage and insurance, or separating a parking space from the lease, are simple ways to boost your rental yield without changing property.

Tip #1: How to reduce your taxes under LMNP status

The non-professional furnished lettings status (LMNP) reduces the tax on your rental income through either a flat-rate allowance (micro-BIC regime) or the actual deduction of expenses and depreciation (actual expenses regime), whichever you choose. This tax regime can be worthwhile for rental property investors. Its main advantages, which will help you maximise your rental yield, are numerous:

• Ease of setup: you do not need to set up a company to benefit from this LMNP status. A tax declaration is enough. Support from an expert (an accountant or similar) may be useful in the first year.
• The option to choose between the micro regime (a 50% allowance for a standard furnished let or a classified tourist rental, but only 30% for an unclassified tourist rental since the 2025 Finance Act) and the actual expenses regime, particularly worthwhile if you have carried out renovations (see below).

Tip #2: Which type of furnished rental to choose under LMNP

Three types of furnished rental are available to you, each with different levels of profitability and constraints: the standard lease, house-sharing, and short-term rental. In practice, this means furnishing your property. You will need to equip your furnished rental with beds, sofas, appliances and kitchen utensils, among other things. You will then have a choice between 3 main types of rental:

• Standard furnished lease: you rent out your house or apartment under a furnished lease, for a one-year term that renews automatically. Each month you will receive a rent payment from your tenant and must provide them with a rent receipt. This type of lease is the closest to an unfurnished let. The property yield is more attractive than a standard unfurnished let, but it is not the most advantageous option under LMNP.
• House-sharing: whether under a single joint lease or individual leases, profitability is higher than with a standard furnished lease. Your apartment naturally needs to be suited to hosting at least 3 flatmates to be profitable. House-share offers today are increasingly turnkey, with a rent that includes water, electricity, internet, and more. This type of lease is in high demand among students, so the location of your investment will be a key success factor.
• Short-term rental: you offer your property for seasonal rental, by the night or by the week. This is the most profitable type of rental, sometimes exceeding 10% net, but it is also the most time-consuming. You will need to welcome guests, manage bookings, and handle cleaning after each stay. It is possible to delegate all or part of these tasks, depending on your financial and personal goals. Here too, the location of your property will play an important role in achieving good profitability on a furnished rental.

Tip #3: Carry out renovations

As an investor looking for profitability, avoid properties that have already been renovated and impulse buys. Properties that offer the most financial benefits are the ones that still need renovation. To do this, you will need to work with trustworthy, skilled tradespeople. The advantages of carrying out renovations are as follows:

• A more attractive purchase price: you will get the property at a lower price given its condition, compared with one that has already been fully renovated.
• Creating property value (capital gain): well-executed renovations can generate a capital gain on resale, taxed under the private individuals' real estate capital gains regime. But since 15 February 2025, depreciation deducted under the actual expenses regime is added back into the calculation of this capital gain, including depreciation taken before 2025: according to impots.gouv.fr, this reform reduces the tax advantage of the actual expenses regime on resale.
• Reducing your taxes: renovation costs count towards your tax return, letting you reduce your taxes. Keep your tradespeople's invoices and your material purchase receipts safe. This sometimes lets your expenses exceed your income, wiping out your tax bill entirely.
• Charging a higher rent: an attractive apartment, well renovated and carefully decorated, will be more appealing. You can expect higher rental yields as a result.

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Tip #4: Which expenses and costs can you deduct under LMNP?

LMNP status lets you deduct many expenses (co-ownership charges, maintenance, depreciation, renovations, utilities, insurance), which reduces your taxable income by the same amount. To improve the profitability of your furnished rental, you can deduct a wide range of costs and charges. This is made possible in particular by LMNP status. You can therefore deduct:

• Co-ownership charges
• Maintenance and cleaning costs for the property
• Depreciation of the property investment as well as of certain furniture, particularly appliances;
• Renovation and fitting-out work;
• Utility bills, and internet or TV/streaming subscriptions;
• Insurance and loan interest (see below).

This list is not exhaustive: you may also be able to deduct other costs related to the rental management of your apartment, which will further increase your property yield (concierge fees, accounting, consumables, and so on).

Tip #5: How to renegotiate your loan and insurance

You can increase the profitability of your furnished rental at any time by renegotiating your insurance policies and your mortgage. As a landlord, you must take out non-occupier landlord insurance, and sometimes tenant insurance or cover specific to short-term rentals. This represents a significant budget item. The same goes for your mortgage, where it can be worth renegotiating either the interest rate or the term. While this is not always straightforward in practice, do not hesitate to discuss it with your bank. New regulation makes it easier to shop around for mortgage insurance. Either way, renegotiating or switching providers can save you tens, or even a few hundred, euros a year. You can also consider refinancing your mortgage for a rental property investment.

Tip #6: Separate the parking space from the lease

One last tip to optimise your rental property investment: make the most of parking space investments, storage spaces (cellars), and revise your rent upward. Rent moves in line with market prices in your area. Stay informed of this trend by monitoring rental prices for properties similar to yours. Also factor in inflation, since rental prices track the rate of inflation. Finally, parking spaces, garages and cellars rent out very well in certain cities. Whether you acquired them at the same time as your apartment or separately, separating them out to rent them individually will also allow you to increase your rental yield.

An informed investor is a profitable investor

There are many levers for optimising your rental yield: LMNP status, renovations, deducting expenses, renegotiating your loan, and making the most of every part of the property. LMNP status lets you benefit from tax advantages, whether you own a studio or a house, even though the tax treatment on resale has become stricter since 2025. Tools like Finary also let you track the value of your rental property alongside the rest of your wealth, so you can compare its profitability with that of your other investments. A profitable investor is, above all, an informed investor, who puts these tips into practice.

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Frequently asked questions

What is the average rental yield on a real estate investment in France?

Profitability depends heavily on the location, the type of rental (unfurnished, standard furnished, house-share, short-term) and the tax regime chosen. Short-term furnished rentals are generally the most profitable on a gross basis, but also the most time-consuming and the most affected by the 2025 tax tightening on unclassified furnished rentals.

Is LMNP status still advantageous after the 2025 tax reform?

LMNP status remains worthwhile on a day-to-day basis thanks to the flat-rate allowance or the deduction of expenses and depreciation. Its advantage on resale has, however, been reduced: since 15 February 2025, depreciation deducted under the actual expenses regime is added back into the capital gain calculation, according to impots.gouv.fr.

How do you calculate the net yield of a rental property investment?

Net yield is calculated by dividing the annual rent received, minus expenses, property tax and management fees, by the total purchase price, including notary fees. The tax regime chosen (micro-BIC, actual expenses, or unfurnished letting) then affects the after-tax net yield.

Micro-BIC or the actual expenses regime under LMNP: which should you choose?

The actual expenses regime becomes worthwhile once your actual costs (renovations, loan interest, depreciation) exceed the flat-rate micro-BIC allowance, which is 50% for a standard furnished let or a classified tourist rental, and only 30% for an unclassified tourist rental since 2025.

Sources

impots.gouv.fr, Je vends un bien immobilier donné en location meublée, comment se calcule la plus-value

LégiFiscal, Revenus 2025 : les locations type Airbnb moins favorables

AMF, liste blanche PSCA, Finary SAS