Furnished rental : what are the advantages ?
Furnished rental offers owners certain advantages, not only fiscal ones.
What is a furnished rental?
A furnished apartment is "a decent apartment equipped with a sufficient number and quality of furnishings to allow the tenant to sleep, eat and live there properly according to the requirements of daily life".
Today, the tenant of a furnished apartment expects more comfort and services than he did ten years ago.
The lifestyle, the professional mobility brings an eclectic clientele and it is a question of answering their needs because the offer is important in the big cities.
To start, what is the mandatory furniture?
The list of the minimum mandatory furniture only appeared in 2015 (application decree of the Alur law of August 5):
- Bedding including comforter or blanket ;
- Shutters, blinds, curtains or other "device for obscuring windows in rooms intended to be used as a bedroom" ;
- Cooktops ;
- Oven or microwave;
- Refrigerator and freezer,
- Dishes needed for meals;
- Kitchen utensils;
- Table and seating ;
- Storage shelves ;
- Light fixtures;
- Housekeeping equipment adapted to the accommodation.
But renting furnished today, especially in dynamic cities with high mobility, often implies providing more services than the minimum.
To date, tenants will appreciate Internet (with fiber if possible), a television, linens (sheets, towels, dish towels), a coffee maker. The minimum cleaning and housekeeping kit.
Of course, beyond that, in a sometimes dense and competitive market, you need attractive decoration, impeccable cleanliness and regular maintenance of the property.
Renting furnished: an attractive tax system
Income from furnished rentals is considered as industrial and commercial profits (BIC). You can declare your income at a fixed rate or in real terms.
The Lokim agency advises owners to use the simulators (free of charge) which allow you to check the most favorable option according to your personal situation (loan, income, taxes etc.).
In the fixed price option, a 50% deduction will be applied. In the actual case you can deduct certain expenses such as management or rental fees, certain work, interest on loans, etc.
It is possible to make this declaration alone or to use an accountant whose fees will also be deductible.
An interesting return on investment ?
The profitability is to be calculated with all the parameters and not only the rent.
Certainly the rents in furnished rentals are on average 15 to 20% higher than empty rentals, however it is necessary to take into account in Paris, for example, the framing of the rents which limits the price/sqm excluding charges and additional services for the main residence lease, mobility lease and student lease.
This is an important issue, especially in cities with a population of more than 200,000. Depending on the surface area of your property and its location, this framework has a greater or lesser impact.
You must also take into consideration maintenance, furniture replacement, and possible vacancies between two rentals.
Flexibility of rental periods
Within the framework of a furnished lease, you can rent for short, medium and long periods.
In the case of an empty lease, the lease is for 3 years.
For a furnished lease, you can leave to live or sell it every year (not every 3 years).
Less formalism for the sale - no pre-emption of the tenant and the possibility to enjoy his property between two rentals.
You wish to rent a property in Paris, you want more information contact Lokim agency.
