Investment: think outside the box

When it comes to rental investment, the first thing that comes to mind is an apartment or a house. But alongside these classics, there are other options whose profitability may surprise you. With a small outlay of capital, mobile homes, parking lots or commercial premises can open up a world of opportunities.

Mobile home
Add a touch of vacation to your investments

Perhaps this summer you had the opportunity to try out a mobile home vacation. And it's given you some ideas. Why not invest in this type of accommodation and rent it out? It's a booming sector, attracting retirees as well as families looking for a pied-à-terre for their summer vacations.
A well-equipped mobile home in a tourist area can be rented out almost all year round. You can therefore expect an average return of 10% for a reasonable capital outlay. A second-hand, fully-equipped, relatively recent mobile home can be negotiated at between €15,000 and €20,000. For a first investment, this can be a good opportunity. All the more so as, unlike a second home, it will not be subject to property tax or council tax. A mobile home is considered a movable asset, not a building. This also means that the purchase of a mobile home does not require a notarial deed. The only cost is the tourist tax, which is paid to the local council. From a tax point of view, if you opt for LMNP (Loueur en Meublé Non Professionnel) status, the tax impact can be significantly limited, and VAT recovery of up to 20% is possible.

Location is everythingWhichevertype of investment you choose, location will be the No. 1 criterion in your choice. A quality location is the guarantee of good profitability.

Parking lots
Give them pride of place

As you've no doubt noticed, finding a parking space in the city is becoming increasingly complicated. There are many would-be parking lot tenants, some of whom are prepared to pay a high price to park with peace of mind. In this context, buying and renting parking spaces can be a good deal. Attractive price, attractive return, easy rental... it's the ideal investment for first-time investors. The capital outlay doesn't have to be large. It all depends, of course, on the location, the region and the type of parking lot (covered or not, underground, with or without surveillance cameras...). But generally speaking, this type of investment costs less than a house or apartment. On the other hand, if the parking lot is in a building, find out about the co-ownership charges. Unpaid charges are rare, and damage is virtually non-existent.
From a legal point of view, you benefit from flexible regulations. As the owner, you are free to set the rent, the term of the lease and the conditions for terminating the tenancy. The profitability of this type of investment is much higher than that of a rental property: between 6 and 10%, or even more, depending on the location and characteristics of the space(s) rented. And if you wait between 3 and 5 years, your parking lot will have paid for itself, and you'll have repaid all the sums committed to your investment.
In terms of taxation, if the annual rental income does not exceed €15,000, the owner benefits from the "micro-foncier" system. The tax authorities will apply a flat-rate deduction of 30% for costs and expenses. In the same way as for a building or apartment, you will be subject to property tax.

Commercial premises
The key to good deals

Investing in commercial property is a great opportunity, especially if you live in a large city and choose premises in a busy, attractive area. Cheaper to buy than residential property, you can expect a gross annual return of between 4% and 10%. From a management point of view, this type of investment offers you great flexibility and security. You sign a long-term lease with your tenant. In other words, a 9-year lease that can be terminated every 3 years by the tenant. Hence the name "3-6-9" lease. The tenant cannot terminate the lease before the end of a 3-year period. This ensures a certain degree of rental stability. Unpaid rent is also less frequent.
In the event of payment problems, the commercial lease, governed by company law, will enable the owner to recover his premises by court order quickly and without the constraints that exist in the context of a "classic" bare dwelling lease.
Another advantage is that the lease can be drafted more flexibly. The terms of payment and assumption of expenses (rent, security deposit, property taxes, maintenance work on the premises, etc.) are freely determined by mutual agreement between the owner and tenant. Except, for example, in the case of major works underArticle 606 of the French Civil Code , or rental management costs, which cannot be charged to the tenant.
The tax aspect is also interesting. Very often, this investment is made through a Société Civile Immobilière (SCI), which buys the premises. Income is taxed as "revenu foncier". Expenses and other works are deductible from rental income. You can create land deficits that can be deducted from your land income, up to a limit of €10,700 per year.

Commercial premises: empty or occupiedBuyingoccupied commercial premises gives you an idea of the profitability right from the start. In the case of empty premises, the rent should be based on market values for a similar property.

Storage space
A promising sector

You need to store equipment or furniture for the duration of a move, or even longer... But where? Who hasn't faced this problem?
By buying and renting a storage space (cellar, box, warehouse...), you'll be responding to an ever-increasing demand from individuals and companies.
In major cities, the expected return on a storage space is generally between 6 and 10%. To maximize profitability, it's important to target the right location. Especially if you're planning to reach out to retailers.
It may also be a good idea to buy a large surface area and split it up into several lots. This will increase the number of tenants. Profitability will have little impact on costs and charges, which are lower with this type of property.
It is possible to pass on property tax, warehouse management costs and even certain works to the tenant.

Marie-Christine Ménoire