Is it a profitable rental investment to build your house to rent it out, rather than making it your main residence? The answer is a big YES. By choosing to have a new house built, you ensure that you have a good place for your retirement and a secure transmission. In addition, by choosing to build to rent, you benefit from tax incentives that allow you to ensure a profitable rental investment.
Building a new house: what tax advantages?
Today, 70% of people who build their new home do so to make it their main residence. But the construction of a detached house can also prove to be a profitable rental investment.
As highlighted by Se Loger in its article on the rental investment of a new house, the advantages of building to rent are numerous:
- The current rental stock is currently made up of only 20% new houses (and 80% apartments). But with the increase in demand for housing with an exterior, the houses are now highly sought after by families for long-term rentals.
- The duration of the rental lease is thus extended: by 80 months compared to 30 on average for an apartment. The rental risk is then reduced by investing in a new home.
- 9 out of 10 buyers want a property with a good DPE and a new house must, with the RE 2020, to have, in addition to new materials, to respect the latest thermal and sound regulations. A new rented house will therefore be a more sustainable investment.
Financial aid for renting a new home
Some financial aid for the construction of his detached house in 2023 are only offered for main residences, such as the social accession loan or the zero-rate loan.
But some financial aid is only offered to people who choose to build a detached house and can apply to rental investment:
- The Pinel device for rental investment, extended to 2024. Implemented in 2014, the Pinel device allows you to benefit from a tax advantage in the form of a tax reduction of up to €63. To benefit from it, the owner is required to rent out his accommodation for a period of 000, 6 or 9 months. In 12, the corresponding tax reductions amount to 2023%, 10,5% and 15%. To benefit from the device, it is in particular necessary to acquire the new housing or in VEFA. The latter must also be located in a collective residential building.
Property tax exemption : as the owner of a new home, renting your property is a great way to save on property taxes. You will be exempt from taxes for two years from January 1 of the year following the rental. And if your house meets certain energy criteria, this exemption can even be extended for up to five years, thanks to what is called the “high level of energy performance” exemption, which applies to “low consumption” houses. .
The many advantages of rental investment when building a house
When we discuss the subject of the rental investment of a new house, there is rarely any question of tax exemption. Indeed, if, at the rental level, many people do this for tax exemption, they will then rather turn to developer specialists who mainly make apartments in areas where we can make tax exemption.
Because it is not possible to deduct tax on the rental everywhere on the territory. There are indeed particular zones, which are called “tense zones”. And the tax exemption of the rental is done mainly on these zones A and A1. A device that hardly concerns the construction of individual houses.
In tense areas, there is almost no construction of individual houses for rental. We are talking here more about building bars, large structures like Bouygues, Nexity, Kauffman & Broad…
The interest of investing “in stone” for its future
As pointed out by Cyril Sarrazin, sales representative at Maisons SIC, “in more rural areas, we have demand for the construction of houses for rental, from people who want to invest in stone rather than letting their money lie dormant on life insurance which does not bring in anything. The so-called "rural" area is also in housing shortage (but on a smaller scale and is neglected by tax exemption solutions), it is rare to have periods of vacancy in rental housing, especially if they are recent and allow a good control of energy consumption.”
Rental investment in new homes more profitable than in old ones
The advantages of rental investment on single-family homes are numerous, compared to old ones with renovation work.
As Cyril Sarrazin points out, “We must first take into account energy law which is being put in place, on all that is an energetic sieve which can no longer be rented. We find ourselves today, with the cost of existing real estate, added to that of energy renovation work (which is not always eligible for certain premiums in the context of rental) to exceed the budget for new construction. And in the new, we do not need to take care of anything, we do not have to run after the craftsmen when they want to intervene on the site so as to be able to rent.
Another advantage of rental investment in new construction: a certain peace of mind, as confirmed by Cyril Sarrazin: “when we move towards new construction, we also have the certainty of guaranteed housing, in compliance with construction rules. We are covered by a ten-year, by a work damage insurance, by a guarantee of completion of the work... We are here on a much more secure investment and more stable tariff than if we buy an old building, for which we an estimate of work but in reality, we are never right in the estimate; there are always things added on top.”
Investing in rental property by building a new house is therefore a bit guaranteed to fit within your budget.
Who are those who make rental investment with new homes?
The rental investment represents barely 30% of the final use of a new house that is being built. There are therefore still many audiences who could benefit from this system of rare profitability. Today, according to Cyril Sarrazin, “People who want to rent a new house are often people who earn a very good living and who want to invest in the medium or long term. Or, it is people who are a little older with a profile of 45-65 years old, who decide to make investments through SCI so as to be able to transfer part of their assets or capital by limiting the taxation linked to the succession.
The disadvantages of making rental investment in the old
There is no downside to renting a new detached house. Only benefits, unlike rental investment in the old one.
One of the main problems, in the old, “it's that you find yourself stuck with your investment. You have the possibility of being able to obtain certain subsidies from the ANAH, which will take charge of your energy renovation. However, your property is locked in rental for 9 years. This means that you will not be able to resell your property for 9 years. So it's certainly not for speculation."
The high profitability of a rental investment in new construction
Despite the fluctuating wear rates, the still high insurance costs, having a new house built to rent out remains very profitable today.
“Because making a new house for rental allows you to always be in control of the profitability of the investment: here we are going to create an asset that is depreciable in relation to the client's capacities. For a property in a main house, we come to meet a minimal customer need, on which we, the builders, will help them readjust their budget according to their wishes.”
The support of Maisons SIC in your rental investment project for a new house
Professional and experienced new home builders like SIC houses do not support at all in the same way customers wishing a main residence and those who want to invest for rental.
“When we make rental investments, we are not at all in the same vision: the client has a well-defined budget to invest. We absolutely have to find a rental construction solution that will fit within the budget and that will allow customers to amortize their property. Efforts are never about the financial aspect. What they are offered then is rather to reduce the finishing service or the size of the accommodation in terms of surface area or even simplify the architecture of the construction. These are two completely different ways of approaching construction. And with the SIC house teams, the financial teams as well as the commercial teams, we have the possibilities of helping people to calculate their profitability in the event of a rental investment. We also support them on this aspect.”
Do you want to get started in rental investment? Contact the Maisons SIC teams !