Real estate investment is often considered as a cornerstone of a successful asset strategy. You want to invest in Paris and can't decide between new and old? Faced with this eternal dilemma, there is no universal answer because such a decision depends on many elements and the preferences of each person.
Paris is one of the most attractive cities to invest in because of its tourist appeal and high rental demand. Older properties are favored by some buyers because they offer several advantages:
There is an abundant supply of old properties on the Paris market that highlight undeniable intrinsic qualities. New programs remain marginal. Moreover, the central location of a property is a vector of satisfaction and reassurance for future buyers.
The purchase price perm2 of the old is often lower than the prices practiced for the new.
However, the price difference fades very quickly thanks to lower medium-term costs in new buildings than in old buildings.
Rental profitability >> New and old properties are equal, even if new properties offer better visibility on medium and long-term profitability than old properties. Older properties offer higher returns, but this is uncertain because unforeseen work can occur: renovation, maintenance, upgrading, modernization, etc. Caution is therefore advised because older properties may have architectural constraints or structural defects.
Resale >> The advantage is with the old. In case of a quick resale, the risk of loss is more important with the new one because the property can no longer be sold at the price of a new house. One should also not forget the threat of the tax advantage obtained in the framework of a purchase via a tax exemption scheme being taken back.
In conclusion, older properties offer higher returns, but this is uncertain because unforeseen work can occur.
In the same spirit, old properties can also present architectural constraints or structural defects that can lead to unforeseen expenses.
New real estate remains attractive for many reasons:
A new property allows a better visibility on the profitability in the medium and long term.
The price differences are palpable between new and old buildings.
The purchase price of a newm2 is about 10% to 15% higher than in the old. At first glance, new buildings seem less attractive, but this would be to take an overly short-term view of the investment...
Transfer taxes (notary fees) for new homes are around 2 to 4% compared to 8 to 10% for older homes.
New homes are more energy efficient than older homes. Considerable progress is made at the time of construction. The technologies used in new constructions and which concern insulation, energy equipment and the use of renewable energies upset the deal. Energy bills are more easily accepted because they are less expensive in new buildings.
Tax argument (tax exemption scheme) >> The tax reduction offered for a new property reduces the amount of the investment. There are many constraints (registration of rental period, amount of rent capped...) for an investment in the new.
Work >>advantageous to the new. Contrary to the old building where big works (cleaning, boiler...) are to be anticipated in the medium term, there is no need to bring the house up to standard or to plan works in the new building and, if necessary, these are covered by the ten-year guarantee*.
*This is a legal warranty to which the contractor is bound for a period of ten years from the date of acceptance of the work.
Consulting a real estate professional is essential to obtain reasoned advice based on your situation. The Mobilis Group has developed a Marketing and Valuation branch to meet the new expectations of its loyal customers concerning new real estate.
For more information, contact our teams at 01 47 20 30 00.
