Setting the right rent for a rental investment

In Paris, the rent for a rental investment has been regulated by law since 2019. The landlord cannot freely set the rent: they must comply with the increased reference rent published by the prefecture, calculated by geographical area, number of rooms, construction period and type of rental. Only a rent supplement, justified by exceptional characteristics, allows the cap to be exceeded.

Introduction

Setting the right rent is a decision that determines both the profitability of your investment and the speed at which you will find a tenant. A rent set too high lengthens vacancy periods. A rent set too low erodes your yield. In Paris, rent control adds a regulatory constraint that every investor must factor in from the property search phase.

In 2026, with a median rent of approximately 28 euros/m² for unfurnished and 33 euros/m² for furnished lettings according to the Observatoire des loyers de l’agglomération parisienne (OLAP), the gaps between arrondissements remain significant. This guide gives you the keys to setting a compliant, competitive and profitable rent.

Table of contents

• How does rent control work in Paris?
• What do reference, increased and reduced rents mean?
• When can you apply a rent supplement?
• How do you set the rent in practice, step by step?
• What impact does the rent have on rental profitability?
• Frequently asked questions

How does rent control work in Paris?

Since 1 July 2019, no Paris rent may exceed the increased reference rent, that is the reference rent plus 20%. The system came after a first attempt between 2015 and 2017 that was annulled by the administrative court; it is based on the loi ELAN and defines a reference rent by geographical zone (80 neighbourhoods in Paris), by property type (number of rooms), by construction period (four periods) and by type of rental (unfurnished or furnished).

The landlord cannot set a rent higher than the increased reference rent, which corresponds to the reference rent plus 20%. In the event of non-compliance, the tenant may refer the matter to the departmental conciliation commission (CDC) and then the court to obtain a rent reduction and reimbursement of overpayments.

Penalties have been tightened. Since 2022, the prefect can impose an administrative fine of up to 5,000 euros for an individual landlord and 15,000 euros for a legal entity in the event of exceeding the increased reference rent without a justified rent supplement.

Rent control also applies upon lease renewal and when changing tenants. A landlord cannot freely increase the rent between two tenants: the rent remains capped at the increased reference rent in effect at the time of reletting.

What do reference, increased and reduced rents mean?

The reference rent is the median rent observed in the neighbourhood for a given type of property; the increased reference rent is the applicable cap (reference + 20%) and the reduced reference rent is the floor (reference - 30%). The reference rent is recalculated annually by OLAP from data collected from landlords.

As an example, for a pre-1946 one-bedroom in furnished rental in the 6th arrondissement, the reference rent may be 32 euros/m², giving an increased reference rent of 38.40 euros/m². For a 40 m² apartment, the maximum rent excluding supplement would therefore be 1,536 euros/month.

In the 19th arrondissement, for the same type of property, the reference rent may drop to 22 euros/m², giving an increased rent of 26.40 euros/m² and a maximum rent of 1,056 euros/month for 40 m². The yield gap between arrondissements is therefore directly linked to the purchase price differential.

Reference rents are available on the DRIHL website and the City of Paris website. They are updated every year on 1 June.

When can you apply a rent supplement?

The rent supplement allows the increased reference rent to be exceeded when the property has location or comfort features that clearly distinguish it from comparable properties in the same area. Accepted characteristics include an exceptional view (unobstructed view of a monument, of the Seine), a terrace or private garden, ceiling height above 3.30 metres, remarkable architectural features (marble fireplace, period Versailles parquet), or premium amenities (concierge, swimming pool).

The rent supplement must be stated and justified in the lease. The tenant may contest it within three months of signing the lease before the CDC, then before the judge.

In practice, the rent supplement is a powerful tool for distinctive properties. A top-floor apartment with terrace in a Haussmann building in the 8th arrondissement can justify a supplement of 5 to 10 euros/m². A property hunter identifies these properties whose rental potential exceeds the standard framework.

Note: since a 2024 decree, certain characteristics can no longer justify a rent supplement, notably shared bathroom facilities, signs of damp or dilapidation, and poor energy performance (DPE F or G). A property rated F or G cannot benefit from any rent supplement.

How do you set the rent in practice, step by step?

Setting the rent follows a four-step process. First, check the increased reference rent applicable to your property on the DRIHL website by entering the address, number of rooms, construction period and type of rental. Note the per-square-metre cap.

Second, assess whether your property justifies a rent supplement. List the distinctive features and compare with similar properties in the neighbourhood. If the supplement is justifiable, estimate it based on comparable listings.

Third, analyse the actual rental market. The rents effectively charged in your micro-neighbourhood, observable on listing platforms, give you a market indicator. A rent set at the regulatory cap but above the actual market will lengthen vacancy.

Fourth, factor vacancy into your profitability calculation. In Paris, the average vacancy is approximately 2 to 4 weeks between tenants for a correctly positioned property. An overly ambitious rent can push this vacancy to 8 or 12 weeks, cancelling out the marginal gain.

For furnished rentals, reference rents are approximately 15% to 20% higher. Switching to furnished can therefore improve yield, provided you meet the legal furnishing requirements (decree of 31 July 2015). Our guide on furnished rental in Paris details these requirements.

What impact does the rent have on rental profitability?

Rent is the numerator of the profitability equation. For a property purchased at 400,000 euros in the 11th arrondissement, a rent of 1,200 euros/month generates a gross yield of 3.6%. A rent of 1,400 euros/month (justified by a rent supplement) raises this yield to 4.2%. The 200 euro/month difference represents 2,400 euros/year, or 0.6 points of gross yield.

In furnished rental, the same property could be let at 1,500 euros/month thanks to the higher furnished reference and the rent supplement, bringing the gross yield to 4.5%. However, furnished rental costs are higher (furniture, turnover, management) and reduce the net yield.

The choice of rent also affects the tenant profile. A rent at the cap attracts tenants with solid financial profiles (income above three times the rent). A moderate rent in an attractive arrondissement generates strong demand and allows the best application to be selected, reducing the risk of unpaid rent.

For a detailed profitability calculation under different rent scenarios, see our rental profitability guide. Our property hunters specialising in rental investment integrate the analysis of potential rent from the property search phase.

Frequently asked questions

How can I find the reference rent for my apartment in Paris?

The reference rent can be found on the DRIHL website (Direction regionale et interdepartementale de l’hebergement et du logement). Simply enter the property address, number of rooms, construction period and type of rental (unfurnished or furnished). The result shows the reference rent, the increased reference rent (+20%) and the reduced reference rent.

Can you exceed the increased reference rent with a rent supplement?

Yes, a rent supplement is permitted if the property has exceptional characteristics compared to similar properties in the neighbourhood: a remarkable view, a terrace, ceiling height above 3.30 m, luxury fittings. The supplement must be justified in the lease and the tenant can contest it within the first three months.

Does rent control apply in Île-de-France outside Paris?

Yes. In Île-de-France, Plaine Commune (Saint-Denis, Aubervilliers…) and Est Ensemble (Montreuil, Bagnolet…) apply rent control. Outside Île-de-France, the system is also in force in Lyon, Bordeaux, Montpellier and Lille. The list is expanding gradually, and each area publishes its own reference rents.

Is rent for a furnished property regulated differently from an unfurnished one?

Reference rents for furnished properties are approximately 15% to 20% higher than for unfurnished properties, reflecting the furniture and equipment provided. The regulation applies in the same way, with an increased reference rent serving as the cap, to which a rent supplement may be added if justified.

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Looking to invest in a rental property in Paris with an optimised rent? Our property hunters analyse the rental potential of each property before acquisition. Contact us to define your strategy.