Rental property: how to boost your yields in Toulouse
The rating jumped 3% in 2021, and should increase by the same amount within a year, according to our conviction index. It must be said that the cancellation in court of the local inter-municipal urban plan will cause new programs to fall behind, and support an already strong rental demand, with nearly 118,000 students. “Concerns weighing on the aeronautical sector have now been lifted, and the economy has remained solid,” notes Manuel Ravier, co-founder of Investissement-locatif.com.
Surfaces in good condition
To exceed the 3.5% return served by studios in the city center, which will reach an average of 150,000 euros for 25 square meters, it is necessary to target the residential districts of Saint-Cyprien, Croix de Pierre, Les Minimes, Saint-Agne , or Rangueil. At the limit between these last two sectors, this 32 meters, in a residence of 2002 with parking and terrace, for example went to 115,000 euros. The additional 5,000 euros to be expected to furnish this already renovated two-room apartment will then bring the yield to 5.5% (550 euros per month). On the new side, prices were to remain on the rise, and trim a yield that is already rarely above 3%. This three-room apartment of 58.39 square meters, with a 7 square meter balcony, in the Heritage program near the University of Rangueil, was nevertheless signed off plan at 252,000 euros. That is, by complying with the Pinel ceiling for the sector of 658 euros, a gross profitability of 3.1%.
Surfaces with works
The climate and resilience law, which will ban the rental of G-class properties from 2025, will create many opportunities here. The brick buildings in the city center are indeed paid to renovate, like those of the 1960s. Example with this 18 square meter studio in Saint-Agne, dating from this period, rented 320 euros (i.e. 5.5% yield ). It will require 5,000 euros to change the radiators and install double glazing, with no guarantee of a better grade than the current F…
Already sold for 125,000 square euros, this 33 meter will undergo 25,000 euros of work. But it will then rent for 690 euros per month (i.e. 5.5% profitability). Others prefer roommates. “Students always favor this formula,” observes Fabien Gobbo, of ADL Immobilier. After 20,000 euros of square work, this 66 meters on the fourteenth floor out of 16 of a 1959 tower of the Allées Charles-de-Fitte, will have an additional bathroom, and will have been divided into three furnished rooms, rented 450 euros each. It will serve 7.7% yield.
Airbnb rules
Vacation rentals may not have a ripple here, either on the size of accommodations or on their number. All that is required is a change of use authorization. And the announced incomes are attractive: according to the Welkeys concierge service, it is necessary to count 8,000 euros per year in the case of a studio (32 euros net per night, for 70% occupancy rate), and 13,000 euros in the case of a two-room apartment (52 euros net per night, for an equivalent occupancy rate). “The most commendable thing is to target a business clientele,” advises Claire Pouget, of the Quintésens group.
The areas intended for them show an occupancy rate of 66%, for a 6% yield. Like this three-room apartment of 60 square meters, in the Chalets district, paid 230,000 euros, and for which 35,000 euros of work are planned. It should bring in 16,000 euros per year, nearly double that of conventional rental.
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The Investor Dashboard
The professionals who took part in our survey: ADL Immobilier, Quintésens, Investissement-locatif.com, Welkeys, Bouygues Immobilier.
Advertised price methodology
We asked ClubFunding, the leader in real estate crowdfunding in terms of volumes financed, to establish for each city the evolution of prices in the old one year from now. The platform is based either on the operations of accompanied property merchants, by reporting their average exit price, in 2022 and 2023, at the current price. Either on a survey of real estate operators, tenant takes into account the purchasing capacity of local buyers, the ease of obtaining building permits and the effects of catching up on the coast from one city to another.
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