Buying a studio in Paris to rent out: the complete calculation

A 20 m2 studio in the 10th arrondissement, listed at 196,000 euros, rented at 850 euros per month. On paper, the calculation seems simple: 10,200 euros annual rent for an investment of 210,700 euros including fees, giving a gross yield of 4.8%. Except that this figure means strictly nothing. Between co-ownership charges, property tax, insurance, vacancy, management and taxation, the real yield falls to a level that many investors would rather not examine too closely.

At Home Select, we have been supporting investors since 2011, with more than 1,200 mandates completed, including a growing share of rental projects. What we consistently observe is the gap between the dreamed yield and the real yield. That gap is what we document here with three complete simulations, line by line, without rounding the corners.

Why the studio remains the preferred entry point

The Parisian studio concentrates several advantages for the starting investor. The entry ticket sits between 150,000 and 250,000 euros depending on the arrondissement, an amount financeable with a 30,000 to 50,000 euro deposit and a 20 to 25-year mortgage. Rental demand is structurally strong: students (Paris and its suburbs count over 700,000 enrolled in higher education), young professionals starting their careers, workers on temporary assignments, expatriate executives on short postings. The vacancy rate in Paris for small units hovers around 2 to 3%, one of the lowest in the entire European Union. A well-located studio on the 3rd floor or above in a decent building rents within two weeks, often within a few days.

The typical tenant profile is also an advantage. A young professional or student does not have the same requirements as a family: no need for a separate kitchen, no school proximity criteria, higher tolerance for small spaces and street noise. The furnishing needed for a studio is limited, a bed, a table, two chairs, storage, a refrigerator, hob, microwave, and the furnishing cost sits between 3,000 and 5,000 euros. This investment is recouped in four to six months of rent differential between furnished and unfurnished.

But the studio also has structural weaknesses that would be dishonest to overlook. Fixed charges weigh proportionally heavier on a small unit. A 20 m2 studio pays virtually the same property tax as a 35 m2 one-bedroom in the same building, and the co-ownership charge per square metre is often higher for small units (the share of charges does not decrease in linear proportion to the surface area). Tenant turnover is also more frequent: a studio tenant stays an average of 18 to 24 months, compared to 3 to 5 years for a three-bedroom family home. Each tenant change costs between 500 and 1,500 euros: check-out inventory costs, potential paint refresh, a few days to weeks of vacancy, reletting fees if using a manager. Cumulated over 20 years, these rotation costs represent 8,000 to 15,000 euros of lost yield, a figure rarely included in quick simulations.

Three complete simulations, three arrondissements

We selected three arrondissements representing different investment profiles: the 10th (dynamic, strong demand from young professionals, Canal Saint-Martin and Republique area), the 18th (attractive value for money, student population, proximity to Montmartre) and the 13th (moderate prices, urban renewal, proximity to university campuses). For each simulation, we model a 20 m2 studio in good condition, 3rd floor or above. We systematically advise against ground floor and first floor for rental investment. The rent discount for a ground floor reaches 10 to 15%, vacancy is twice as high as upper floors, and resale is penalized. A rental investment goes upstairs, without exception.

Simulation 1: the 10th arrondissement

The 10th shows an average price of 9,800 euros/m2 in 2026, but for a well-located studio between Republique and Canal Saint-Martin, prices easily reach 10,500 euros/m2. This arrondissement attracts young executives and creative professionals, with an intense neighbourhood life and exceptional transport links (lines 3, 5, 7, 11, Gare de l’Est and Gare du Nord within walking distance). Our assumption: a 20 m2 studio purchased at 196,000 euros, 4th floor, good general condition, energy rating D, older stone building with concierge and keypad entry.

The acquisition costs calculation is the starting point too many investors overlook. On 196,000 euros, notaire fees represent 7.5% for existing properties, or 14,700 euros. The total invested budget therefore reaches 210,700 euros. This figure, not the purchase price alone, must serve as the basis for the yield calculation. Some property portals and agents display a gross yield calculated on the price excluding fees, a flattering but misleading presentation that artificially inflates the yield by 0.3 to 0.4 percentage points.

The regulated rent for a furnished studio in the 10th is around 850 euros/month in 2026, rent supplement included. The reference rent cap for a furnished studio built before 1946 sits between 38 and 42 euros/m2 depending on the OLAP zone, or 760 to 840 euros for 20 m2. If the property has features justifying a supplement (unobstructed view, exceptional light, recent renovation, balcony, superior equipment), 850 euros is achievable. In unfurnished rental, the rent falls to 700-750 euros/month. We take the furnished rate at 850 euros/month, or 10,200 euros/year. The gross yield stands at 4.84%, a figure that catches attention but does not withstand methodical examination of the charges.

Here is the detail item by item. Co-ownership for a 20 m2 studio in an older building in the 10th with concierge: approximately 900 euros/year in non-recoverable charges, meaning the strict owner’s share (building insurance, property manager fees, non-rechargeable common area maintenance, concierge share). Property tax: 350 euros. Landlord non-occupancy insurance, made mandatory by the ALUR law of 2014: 150 euros. Provision for routine maintenance, calculated from experience, a water heater to replace every ten years (800 euros), paint and grout refresh at each tenant turnover (1,200 to 1,500 euros every two years at studio rhythm), minor repairs (plumbing, locks, electrical outlets), averaging approximately 400 euros/year. If you delegate letting management to a professional, add 8% of collected rents, or 816 euros/year. Finally, vacancy allowance: even in a market as tight as Paris, expect one month of gap every two to three years between tenants (refurbishment time, search, viewings, inventory), or 283 euros/year on average.

Total annual charges: 2,899 euros. Net income after charges falls to 7,301 euros. Net yield drops to 3.46%. The gap from gross is already 1.38 percentage points, and we have not yet touched taxation.

In unfurnished rental, net rental income is taxed at the progressive income tax rate, plus 17.2% social contributions. For an investor at the 30% marginal rate, the total tax burden represents 47.2% of taxable rental income. After deducting allowable charges (co-ownership, property tax, works, loan interest if applicable, management fees), taxable income stands at approximately 6,500 euros. Tax and social contributions then reach 3,068 euros. The net-net yield falls to 2.01%. At the 41% marginal rate, the tax burden rises to 58.2% of taxable income, tax climbs to 3,783 euros and the net-net yield drops to 1.67%. Taxation is the silent gravedigger of Parisian unfurnished rental yield.

In LMNP (non-professional furnished landlord status) under the actual expense regime, the landscape changes radically. Property depreciation, calculated on the value excluding land (land represents approximately 15 to 20% of the total value in Paris, with the remainder depreciable over 25 to 30 years), creates an annual accounting charge of 6,000 to 7,000 euros. Furniture depreciation (5,000 euros initial equipment over 5 to 7 years) adds 700 to 1,000 euros/year. Total depreciation of 7,000 to 8,000 euros/year absorbs nearly all the accounting result, or even all of it. The taxable result is zero. Zero tax, zero social contributions. The net-net yield in LMNP equals the net yield after charges: 3.46%. The gap with unfurnished rental at the 30% marginal rate is 1.45 percentage points, or 3,000 euros/year of income preserved through the tax status choice alone. Over 10 years, that is 30,000 euros.

Simulation 2: the 18th arrondissement

The 18th offers a lower entry ticket: 9,200 euros/m2 on average, with pockets at 8,500 euros/m2 in the Marcadet, Clignancourt and Jules Joffrin areas. Prices rise to 10,000-10,500 euros/m2 around Les Abbesses and La Butte, but these micro-neighbourhoods are more about heritage investment than yield. For pure rental investment, the Simplon, Chateau-Rouge (undergoing revaluation), and Lamarck-Caulaincourt areas offer the best compromise between contained purchase price and sustained rental demand from students (Sorbonne Nouvelle is accessible via line 12), young professionals and newcomers to Paris.

Our assumption: a 20 m2 studio purchased at 184,000 euros, or 197,800 euros including notaire fees (7.5%). Stone building, 3rd floor, keypad entry, no concierge, energy rating D.

The regulated furnished rent in the 18th is around 780 euros/month in 2026. Annual gross income is 9,360 euros, and gross yield 4.73%. Annual charges are slightly lower than in the 10th: no concierge reduces co-ownership by approximately 150 euros/year. Detail: co-ownership 750 euros, property tax 280 euros, landlord insurance 130 euros, routine maintenance 350 euros, letting management at 8% 749 euros, vacancy 260 euros. Total: 2,519 euros. Net income after charges: 6,841 euros. Net yield: 3.46%.

In unfurnished rental at the 30% marginal rate, the net-net yield is 2.10%. In LMNP under the actual expense regime, depreciation (approximately 6,500 euros/year on the building + 700 euros/year on furniture) absorbs the taxable result. Net-net yield in LMNP: 3.46%. The 18th presents an almost identical yield profile to the 10th, with a lower entry ticket by 12,900 euros, an advantage for investors seeking to limit their personal deposit or monthly mortgage payments.

Simulation 3: the 13th arrondissement

The 13th is the arrondissement that surprises investors who only look at the Right Bank’s golden triangle. At 8,600 euros/m2 on average, one of the lowest prices on the entire Left Bank, it offers direct access to the Latin Quarter (lines 5 and 7), a major university campus (Paris-Cite and Paris-Saclay Tolbiac campus, numerous schools), and a large-scale urban renewal programme (Paris Rive Gauche, BNF, line 14 extension, future Grand Paris Express station).

A 20 m2 studio in the Place d’Italie or Gobelins area: 172,000 euros, or 184,900 euros including notaire fees. The regulated furnished rent is around 750 euros/month, or 9,000 euros/year. Gross yield: 4.87%, the highest of our three simulations, thanks to the lower purchase price. Annual charges (co-ownership 700 euros, property tax 250 euros, landlord insurance 120 euros, maintenance 350 euros, letting management 720 euros, vacancy 250 euros) total 2,390 euros. Net income: 6,610 euros. Net yield: 3.57%.

In LMNP under the actual expense regime, annual depreciation (approximately 5,800 euros/year on the building + 700 euros/year on furniture) covers the entire result. Net-net yield in LMNP: 3.57%. The 13th achieves the best yield of our three scenarios, and this is no coincidence: it is the arrondissement where the purchase price to rent ratio is most favourable for small units, thanks to student rental demand that keeps rents at a high level relative to acquisition prices.

Comparative summary of the three arrondissements

The 10th represents a total investment of 210,700 euros, monthly rent of 850 euros, gross yield of 4.84%, net yield of 3.46% and net-net LMNP yield of 3.46%. The 18th requires 197,800 euros, for a rent of 780 euros, gross of 4.73%, net of 3.46% and identical LMNP net-net of 3.46%. The 13th, the most accessible at 184,900 euros, shows a rent of 750 euros, gross of 4.87%, net of 3.57% and the best LMNP net-net at 3.57%.

The primary lesson is clear: the purchase price is the first yield lever. Between the 10th and the 13th, the 25,800 euro price gap produces a yield differential of 0.11 percentage points per year, or approximately 200 euros/year. Modest in appearance, but cumulated over 20 years with reinvestment of the deposit difference, the total gap exceeds 30,000 euros. The second lesson is equally clear: the tax status choice (LMNP vs unfurnished rental) weighs more than the arrondissement choice. The gap between LMNP net-net and unfurnished net-net reaches 1.3 to 1.8 percentage points depending on the marginal rate, ten times more than the gap between the 10th and the 13th.

What the numbers do not tell: capital gains and leverage

A net-net yield of 3 to 3.5% is modest compared to other investments. But this rental yield calculation captures only part of the real performance. Parisian property has two additional return drivers that standard financial investments do not simultaneously offer: capital appreciation and credit leverage.

Over the past fifteen years, prices per square metre in Paris have grown on average 2 to 3% per year, with accelerations in certain transforming arrondissements (the 10th gained 35% between 2014 and 2020, the 19th over 40% in the same period). A studio purchased at 184,900 euros in the 13th, using a conservative 2.5% annual appreciation, is worth 236,000 euros after ten years. The latent gain of 51,000 euros represents an additional return of 2.5% per year, invisible in the rental yield calculation but very real in the investor’s wealth. The total return (net-net rent + appreciation) then reaches 5.5 to 6% annualized. Over a 20-year horizon, cumulative appreciation potentially exceeds 115,000 euros, an amount greater than all net rents collected over the period.

Credit leverage amplifies this result further. With a 20% deposit (37,000 euros) and a loan at 3.2% over 20 years, monthly payments are 850 euros. The 750 euros rent covers 88% of the payment, reducing the actual savings effort to 100 euros/month, or 1,200 euros/year. At the end of the loan, the investor holds a property estimated at 300,000 euros (assuming 2.5%/year) for an initial deposit of 37,000 euros and a cumulative effort of 24,000 euros. The wealth created for a total investment of 61,000 euros represents a multiplier of 4.9. No other investment accessible to an individual, REITs, life insurance, stock market, offers comparable leverage with such a controlled level of risk.

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The property hunter’s role in rental investment

Finding a studio in Paris is not difficult: spend ten minutes on SeLoger or LeBonCoin. Finding the right studio, the one that maximizes yield without compromising investment security, requires expertise that property portals do not provide. The factors separating a successful investment from a mediocre one are almost always invisible in an online listing.

Co-ownership condition is the first hidden factor. A facade renovation voted at a general meeting represents 5,000 to 8,000 euros in exceptional charges for a studio. A lift replacement: 3,000 to 5,000 euros. A communal water pipe replacement: 2,000 to 4,000 euros. These amounts appear in general meeting minutes and the multi-year works plan, which our property hunters systematically consult before any viewing, not after. The co-ownership regulations also deserve careful reading: some older buildings contain clauses that prohibit or restrict furnished rental, killing an LMNP project from the start.

Floor level and orientation make a quantifiable difference. A dark studio on the first floor facing a courtyard rents 80 to 120 euros/month less than a bright studio on the fourth floor facing a quiet street, a fact verified across hundreds of transactions. Over twenty years, this rent gap represents 19,000 to 29,000 euros in lost income. The actual energy rating determines the long-term viability of the letting: a studio rated E can still be rented in 2026, but progressive bans (F in 2028, E in 2034) create long-term uncertainty that a D or C rating eliminates.

Across the 1,200 mandates completed since 2011, Home Select achieves an average negotiation margin of 6%. On a studio listed at 196,000 euros, that represents 11,760 euros in savings, an amount that covers the property hunter’s fees and improves the yield by 0.3 percentage points per year over the entire holding period. Beyond pure negotiation, it is the full set of preliminary checks (co-ownership, energy rating, technical condition, compliance with rent caps, actual rental potential) that secures the investment and prevents unpleasant surprises.

Unfurnished or LMNP: the clear verdict for a studio

For a studio in Paris, LMNP status (non-professional furnished landlord) wins in virtually all configurations. The advantages stack up: accounting depreciation neutralizes taxation for 8 to 12 years; furnished rent is 10 to 15% higher than unfurnished; the one-year lease (nine months for a student) offers more flexibility to adjust rent or recover the property; furniture is depreciable over 5 to 7 years, creating an additional charge that further reduces the taxable result.

The LMNP entry cost is modest: furnishing of 3,000 to 5,000 euros (recovered in a few months of rent differential), an accountant at 600-900 euros/year for the BIC actual expense declaration (itself a deductible charge). The annual additional cost is marginally offset by the tax saving from the first year, and very substantially from the second.

The only case where unfurnished rental may be justified: an investor at the 11% marginal rate (income below 27,500 euros), who wants no furniture management burden and prefers the stability of a three-year lease to limit turnover. For any investor at the 30% marginal rate or above, LMNP is the clear winner.

Pitfalls to avoid absolutely

The first pitfall is confusing gross yield with net-net yield. The gap systematically exceeds 1.5 percentage points in LMNP and 2.5 to 3 points in unfurnished rental. An investor who decides based on the gross yield displayed by the estate agent is preparing an arithmetic disappointment.

The second is the ground floor. The 10 to 15% savings at purchase never compensates for the cumulated rent loss (15-20% less) and doubled vacancy. Over 20 years, a ground-floor studio earns 30,000 to 50,000 euros less than an identical studio on the 4th floor of the same building.

The third pitfall is the co-ownership with pending works. A facade renovation (5,000-8,000 euros), a lift (3,000-5,000 euros), a roof (8,000-12,000 euros) can wipe out two to four years of net yield. Reading the general meeting minutes is mandatory, not optional.

The fourth is the too-small studio. Below 15 m2, bank financing becomes complicated, tenant turnover accelerates and resale stalls. The optimal size sits between 18 and 22 m2.

Finally, poor energy ratings. Properties rated F and G are progressively exiting the rental market (G banned since 2025, F in 2028). A rating of E is a bet on the regulatory calendar. A D or better secures the property against any tightening. Studios rated F already show a 10 to 15% discount, an opportunity for the investor who budgets an energy renovation, a trap for those who ignore it.

The Parisian studio: a wealth-building investment

Nobody gets rich quickly with a rental studio in Paris. The 3 to 3.5% net-net yield in LMNP does not compete with the historical stock market performance (7% annualized long-term) nor with certain provincial investments (5-8% net in dynamic mid-sized cities). But the Parisian studio offers a combination that these investments do not deliver: security (near-zero vacancy, structural demand independent of the economic cycle), leverage (financing up to 100% of the price via credit), and capital appreciation (2-3% per year long-term trend). The total return, rent + capital gain + leverage, reaches 8 to 12% on equity, a result that only the stock market can theoretically match, but with incomparable volatility.

For investors seeking pure and immediate rental yield, other strategies exist: co-living, commercial premises, parking spaces. For those who prioritize building solid wealth over a 15 to 20-year horizon, the studio remains the natural entry point and the most reliable foundation for an investor’s journey in Paris.

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