Real estate: young people prefer to invest in rental properties

Albane Leprince 6:00 a.m., March 15, 2024

While the rental investment market collapsed in the last quarter of 2023, young executives are increasingly interested in this type of investment.

Aware of not being able to afford the house of their dreams due to property prices that are too high and rates still high, they still want to build up their assets by focusing on rental properties according to a CAFPI study published this Tuesday.

At the real estate loan and credit redemption broker, the share of real estate investment in all its forms increased from 10.1% to 8.5% in 2023. A slowdown which, however, does not slow down the desires of young people! 

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Young people favor new real estate

In fact, 70% of rental investment projects financed through CAFPI concern new properties, via the Pinel system in particular, and young people are following this trend.

This offers a certain flexibility since they can defer their loan repayment by 2 years when entry into use of the property is deferred compared to the date the loan was granted.

But the Pinel system will end in 2025, so young executives will then move towards older properties, according to CAFPI experts, often thermal strainers which will cost less but will require energy renovation work. 

But then why do young people prefer to invest in rental properties?

For the broker, real estate is the only investment that can be financed on credit.

And even if banks generally ask for a deposit of 10% on the purchase, some now accept again to finance them up to 110% (price of the property + notary fees).

Investing by subscribing to a loan also means reducing taxes since charging loan interest on your rent allows you to reduce your taxes.