The Real Return on a Paris Rental Investment: The True Numbers

A gross yield of 3.6%. A net yield of 2.5%. A net-net yield of 1.6%. These are the three figures an investor in the 30% tax bracket actually obtains for a 35 sqm one-bedroom in the 11th arrondissement, rented unfurnished. The 2-point gap between gross and net-net is the distance between the estate agent’s brochure and the bank statement at year-end. It is also this distance that enables informed decisions, provided it is measured honestly.

What gross yield does a one-bedroom in the 11th deliver?

3.58% gross: 13,800 euros of annual rent on 385,560 euros invested, notaire fees included. Related to the 357,000 euro purchase price alone, as the classic formula set out in our rental yield calculation guide does, the same property would show 3.87%. Every simulation below uses the total amount invested, the more demanding base.

An investor purchases a 35 sqm one-bedroom apartment in the 11th arrondissement at 10,200 euros/sqm, totalling 357,000 euros. Notaire fees for an older property amount to 8%: 28,560 euros. The total invested amount is 385,560 euros. This is the figure that forms the basis of any rigorous yield calculation, not the purchase price alone, not the listed price, not the “net vendor” price that the estate agent highlights.

The regulated rent for a furnished 35 sqm one-bedroom in the 11th is around 1,150 euros per month in 2026, including a rent supplement justified by the property’s condition and features. The gross annual rental income is 13,800 euros. The gross yield stands at 3.58%. This is the figure shown on the listing. It is also the least relevant figure in the equation.

What charges really weigh on a Paris rental?

4,037 euros a year against 13,800 euros of rent, or 29% of receipts: 1,400 euros of non-recoverable condominium charges, 1,104 euros of letting management, 500 euros of property tax, 500 euros of maintenance, 383 euros of averaged vacancy and 150 euros of landlord insurance.

Non-recoverable condominium charges are the heaviest line item. For a 35 sqm one-bedroom in a period building in the 11th with a concierge: 1,400 euros per year, or 40 euros per sqm per year. This covers the owner’s share of building charges: building insurance, management company fees, non-rechargeable common area maintenance, and concierge allocation. Recoverable charges (cold water, household waste, routine maintenance) are passed on to the tenant through service charge provisions.

Property tax amounts to 500 euros per year for a one-bedroom in the 11th, a moderate amount reflecting the City of Paris tax policy, which is relatively contained compared to some suburban municipalities where property tax can be double for an equivalent property.

Landlord insurance (PNO) costs 150 euros per year. It covers incidents occurring during vacancy periods and damage under the owner’s responsibility (water damage from embedded pipes, structural maintenance failures).

Vacancy is low but not zero. Between tenants: a one-month gap for the exit inventory, any minor works, finding a new tenant, and the entry inventory. Over an average lease period of 2 to 3 years for furnished rentals, this represents approximately 383 euros per year on an averaged basis.

Routine maintenance, including a water heater replacement every ten years (800 euros), paint refresh and sealing at each tenant change (1,500 euros every two to three years), and minor repairs (taps, locks, outlets), averages out to approximately 500 euros per year over the holding period.

Delegated property management by a professional costs 8% of collected rents, or 1,104 euros per year. This item is optional but realistic for an investor who does not wish to handle tenant searches, inventories, rent receipts, and routine incidents personally.

Total annual charges reach 4,037 euros. Net income after charges is 9,763 euros. The net yield stands at 2.53%. The gap from gross is 1.05 points: more than a quarter of the gross yield has disappeared into charges. And taxes are still to be paid.

Unfurnished or LMNP: which leaves more net income?

LMNP, by almost a full point of yield: 2.53% net-net against 1.58% for unfurnished letting at a 30% marginal rate, or 3,680 euros more income per year on the same property.

For unfurnished rental under the actual expenses regime, deductible charges reduce taxable income. After deducting the charges (condominium, property tax, insurance, works, management fees) and the loan interest, approximately 6,000 euros in total, taxable property income is approximately 7,800 euros. At a marginal tax rate of 30% plus social contributions of 17.2%, the tax reaches 3,680 euros. The net-net yield falls to 1.58%.

At a 41% marginal rate, the tax climbs to 4,538 euros and the net-net yield drops to 1.36%. More than half the property income goes to taxes and contributions. This is the price of unfurnished rental for high earners, a price many investors discover too late, after the purchase.

The LMNP (furnished non-professional landlord) regime under actual expenses radically transforms the result. Depreciation of the property (excluding land estimated at 15-20% of value, giving a depreciation base of approximately 300,000 euros over 25-30 years = 10,000-12,000 euros per year) and furnishings (15,000 euros over 7 years = 2,143 euros per year) creates an annual accounting charge of 12,000 to 14,000 euros. Against net income of 9,763 euros, depreciation absorbs the entire taxable result and even generates a carry-forward deficit (within the limit of non-professional BIC income). The taxable result is zero. Zero tax. Zero social contributions.

The net-net yield under LMNP equals the net yield: 2.53%. The gap with unfurnished rental at a 30% marginal rate is 0.95 points, or 3,680 euros per year in additional income for the same property. Over 20 years, the cumulative difference exceeds 73,000 euros. For an investor at the 41% marginal rate, the gap is 1.18 points and the cumulative difference over 20 years approaches 91,000 euros.

Choosing LMNP for a Paris rental investment is, in virtually all tax configurations above the 11% bracket, an arithmetic certainty.

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What do capital gains add on top of the rent?

Around 2.5% a year, as much as the net-net rental income itself: over ten years, a property bought for 385,560 euros and appreciating at that pace is worth 493,000 euros, an unrealised gain of 107,000 euros.

A net-net yield of 2.53% is modest. But this figure captures only one component of total performance. Capital gains, the appreciation of the property’s value, are the invisible component that changes the entire equation.

Over the past fifteen years, prices per sqm in Paris have risen by an average of 2 to 3% per year, with significant variations by arrondissement and cycle. The 10th gained 35% between 2014 and 2020. The 19th rose by over 40% during the same period. The 2022-2024 correction (5 to 8% decline linked to rising interest rates) was followed by a gradual recovery in 2025-2026.

A property purchased for 385,560 euros that appreciates by 2.5% per year is worth 493,000 euros after ten years. The unrealised gain of 107,000 euros represents an additional return of 2.5% per year. The total return (net-net rental income under LMNP + appreciation) reaches 5 to 5.5% per year. Over 20 years, with 2.5% annual appreciation, the property is worth 632,000 euros, a capital gain of 246,000 euros that brings the total annualised return above 6%.

How much does credit multiply the initial stake?

By 2.1 over twenty years: 632,000 euros of accumulated wealth for 299,592 euros actually paid out, deposit and savings effort combined.

Credit leverage is the third performance driver. An investor who contributes 20% (77,112 euros) and borrows 80% at 3.2% over 20 years deploys 77,112 euros of equity for a 385,560 euro asset.

Monthly mortgage payments amount to approximately 1,740 euros. Net rental income (813 euros per month under LMNP) covers 47% of the monthly payment. The monthly savings effort is 927 euros, or 11,124 euros per year. After 20 years, the investor owns a property estimated at 632,000 euros (assuming 2.5% per year) for an initial deposit of 77,112 euros and a cumulative effort of 222,480 euros.

The 632,000 euros in accumulated wealth for a total investment (deposit + effort) of 299,592 euros represents a multiplier of 2.1. This multiplier is exclusive to real estate: neither REITs (financing limited to 50%), nor life insurance (no leverage), nor stocks (marginal and risky leverage) offer a comparable mechanism.

Does Paris property beat equities or REITs?

Not on pure yield: REITs pay 4 to 5% net and equities 7% a year historically, against 2.53% net-net under LMNP. But none of them offers credit leverage, which lifts the total return on equity to 8-12% a year.

REITs (SCPI) offer an average yield of 4 to 5% net in 2026 with fully delegated management. But they do not allow the same credit leverage, do not benefit from LMNP depreciation, and their liquidity is limited (resale times of 1 to 6 months, potential discount in withdrawal periods).

Euro-denominated life insurance yields 2 to 3% net, comparable to LMNP net-net, but without leverage and without property appreciation. Unit-linked funds offer potentially higher returns but with incomparable volatility.

The stock market shows an annualised historical return of 7% (dividends reinvested), significantly higher than pure rental yield. But the volatility is incomparable: a 30% crash wipes out years of returns in weeks. Parisian property offers structural stability that the stock market cannot guarantee.

Which levers improve the return on a Paris rental?

Four, ranked here by power: LMNP status (up to 1.8 points of net-net yield), a negotiated purchase price, the choice of arrondissement and control of condominium charges. The section below takes them in the order you act on them.

Purchase price is the first actionable lever. Across Home Select’s 1,200+ mandates, the average negotiation margin is 6%. On 357,000 euros, that represents 21,420 euros in savings, and 23,100 euros less to finance once proportional notaire fees are taken into account: the gross yield rises from 3.58% to 3.81%, or 0.2 points gained every year for the entire holding period.

The choice of arrondissement is the second lever. Gross yield varies from 2.5% in the 6th (high prices, regulated rents) to 4% in the 19th (accessible prices, strong demand). The best arrondissements for investing combine controlled pricing, a gross yield above 3.5%, and capital gains potential driven by infrastructure projects (Grand Paris Express) or neighbourhood dynamics.

Controlling condominium charges is the third lever. Avoiding condominiums with a concierge, swimming pool, or a recently installed lift under an expensive contract can represent 500 to 1,000 euros per year in savings, or 0.15 to 0.25 percentage points of net yield.

LMNP status under the actual expenses regime is the fourth lever, and the most powerful. It improves the net-net yield by 0.5 to 1.8 points compared to unfurnished rental, depending on the marginal tax rate.

Should you invest in Paris for the return?

Not for rental yield alone, which is lower than in the regions. For total return, yes: rent, appreciation and leverage combined produce 8 to 12% a year on equity over fifteen to twenty years.

Let me be frank: if you are looking for pure rental yield, Paris is not the best destination. Lyon, Bordeaux, Nantes, or Marseille offer net yields of 4 to 6%, two to three times higher. But these cities offer neither the same wealth security, nor the same capital gains potential, nor the same resale liquidity, nor the same bank leverage.

Paris rental investment is justified by total return: the combination of rental income, capital appreciation, and credit leverage. Over a 15 to 20-year horizon, this combination produces a wealth result of 8 to 12% on equity that few investments can match with such controlled risk.

It is precisely to optimise each component of this total return that using a property hunter makes the difference: a negotiated purchase price, a property on the right floor in the right building, a healthy condominium, an energy performance rating that will not penalise resale. Across 1,200+ transactions, we have learned that every detail counts, and that the sum of these details makes the difference between an investment that stagnates and one that builds wealth.

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