Studio or large apartment? What should you target for a rental investment in 2022? And for what profitability? According to a study published by Meilleurs Agents on May 30, 2022, “the profitability of a studio is more interesting than that of a large apartment in almost all of the 51 largest cities in France”.
In 95% of cases, “the profitability of a 1-room type property is greater than the profitability of a 4-room type property or more. Indeed, on average, the gross profitability of a studio (type 1 room) is 6.2%, compared to 5.2% for T4, so a gross performance 1 point higher on average for small dwellings”, note the authors of the study.
According to Best Rate, which analyzed average prices and rents as of May 1, 2022, the average gross profitability of a T1 is 6.2%. This is 1 point more than the average gross profitability of a T4, which is 5.2%.
Only “Lyon, Villeurbanne and Nice are exceptions with a profitability equivalent to Lyon and Nice in both cases (T1 versus T4)”, specifies Meilleurs Agents.
As for Paris, gross profitability is the lowest of the largest cities in France. The rate is 3.3% for T1 and 2.8% for T4et type goods.
“Contrary to what one might think, all the cities in the Top 50 have higher profitability than expected in Paris, regardless of the type of property. However, the share of tenants in the capital (around 65%) is among the strongest in the Top 50, which reduces the risk of rental vacancy. Moreover, it should not be forgotten that, more than a rental investment aimed at profitability, investing in the capital is generally perceived as an excellent means of achieve a great added value in the long term”, nevertheless observes Barbara Castillo Rico, Head of economic studies at Meilleurs Agents.
So what are the 10 cities where gross yield is more attractive for studios than large apartments? Check out the standings in the slideshow below.