The advantages of renting an apartment are many: an attractive tax, rents higher perceived and especially a contractual freedom for the owner.
Furnished rental: an attractive solution
Furnished rentals usually involve more frequent renter changes and a significant investment in furniture, but it has significant advantages that make it more attractive than renting.
Your obligations as an owner
A furnished rental must be decent and meet certain criteria of furniture defined by the law, allowing the tenant to sleep there, to eat and to live in a current way. If the law hardened certain conditions relating to the lease, renting furnished accommodation still allows you to benefit from a great freedom of contract. But you must respect the following points:
The lease is signed for a period of at least 1 year and is renewed tacitly in the absence of leave from one of the parties. The duration of the lease is reduced to 9 months without the possibility of tacit renewal if the tenant is a student.
The period of notice is 1 month in case of leave of the tenant, and 3 months before the expiry of the lease in case of leave on your part (if you want to sell the housing, live there yourself, or for a reason legitimate as non-payment of rent).
The deposit cannot exceed two months’ rent excluding charges. It must be returned within 1 month after the departure of the tenant.
The advantages of furnished rental
You can claim a rent 10 to 30% higher for a furnished rental than for an empty accommodation equivalent in terms of surface, quality and location, which ensures you a better gross profitability.
In the case of a furnished property, your rents are taxed as industrial and commercial profits (BIC) and not as income property, which allows you to enjoy tax benefits. If your rental income does not exceed € 23,000 per year, and if you are not registered in the commercial register as a professional renter, you have the status of non-professional furnished rental property (Leaseback).
You can then choose to be taxed on only half of your revenue (micro-BIC scheme, accessible within the limit of an annual revenue ceiling). But if you wish, you also have the option to opt for the real diet. You can then deduct your expenses as loan interest, and use year-by-year depreciation to arrive at a zero tax result. This is to reduce or even cancel your income tax. To find out more about the taxation of furnished properties, visit the website of the French administration.
Despite the obligations it imposes on you as an owner, the furnished rental remains a tax-attractive solution if you are looking to invest in a rental property.
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