A property purchase intended for rental is about more than finding an apartment and signing the paperwork at the notary’s office. Rental returns depend on decisions made well before the first viewing: the type of rental you choose, the property’s energy rating and the tax regime you select. Each factor affects the project’s final profitability.
Property energy rating: the first thing to check before buying a rental property
Before comparing prices per square metre, check the property’s DPE rating. Since 2025, properties rated G can no longer be rented out. You can still buy one, but you won’t be able to rent it out as it stands.
Rents are frozen for properties rated F or G. No increase is allowed when the rent is reviewed annually, the lease is renewed or the property is rented out again. A poor energy rating therefore limits both your ability to rent out the property and your rental income.
Why does this often get overlooked? Because many prospective investors focus on location and price without considering how the DPE rating affects day-to-day management. If you find an attractively priced property rated F or G, you can quickly compare it with better-rated properties in the same area using several listings on Concept Déco’s real estate website.
In a condominium, renovating the energy performance of a single unit can be held up by collective decisions. Check which renovation projects have been approved at the general meeting before committing. If the condominium association refuses to carry out insulation or heating work, bringing your property up to standard could be delayed for years.
Rental profitability: what gross yield doesn’t tell you
Gross yield is the annual rent divided by the purchase price. This figure is quoted everywhere, but it hides what matters most.
Costs that eat into your actual returns
Property tax, non-recoverable condominium fees, non-occupant landlord insurance and management fees if you hire an agent all reduce your actual yield. For a small property, these costs can account for a significant share of the rent collected.
Then there’s vacancy. One month without a tenant out of twelve directly reduces your returns. Choose areas where rental demand exceeds available supply to limit this risk.
Repairs and touch-ups between tenants
Freshening up a property between leases—painting, flooring and taps—takes time and money. Factor these costs into your calculations from the outset. A newer property or one renovated before purchase can keep these expenses down for several years.
- Check the condition of the plumbing, electrical system and windows before signing the preliminary sale agreement.
- Ask for the minutes of the last three general meetings to anticipate approved or upcoming condominium work.
- Estimate the cost of bringing the property up to energy standards if its DPE rating is E or lower.
LMNP tax treatment and resale: the 2025 depreciation trap
Under the actual-expenses tax regime, the non-professional furnished rental (LMNP) status lets you claim depreciation on the property. While you’re renting it out, this reduces your taxable income, sometimes to zero. It may seem like a good deal—and it is, as long as you don’t sell.
Since February 15, 2025, depreciation claimed is deducted from the acquisition price when calculating the capital gain on resale. In practice, the more depreciation you’ve claimed, the higher your taxable capital gain will be when you sell.
A ministerial response published in the Journal officiel on March 24, 2026, clarifies that this rule also applies to depreciation claimed before 2025. If you’ve claimed depreciation on a property for ten years, all of it will be included in the calculation when you sell.
Before choosing the actual-expenses regime under LMNP, run resale projections for five and ten years from now. Annual tax savings could turn into a significant extra cost when you sell, especially if the local market hasn’t risen enough to offset it.
Selling a rental property: rules and deadlines to follow
Selling a property with a tenant in place is subject to specific rules. The existing lease continues under the new owner. If you want to sell the property vacant, you must give the tenant notice within the legal timeframe and provide a valid reason (sale, repossession for personal use, or a legitimate and serious reason).
Listings and disclosure requirements for an F- or G-rated property
If your property is rated F or G, sale listings must state that it has excessive energy consumption. This disclosure directly affects how buyers perceive the property and, consequently, its sale price.
Energy-inefficient properties sell at a discount compared with equivalent, better-rated homes. Renovating before putting the property on the market can improve its DPE rating and limit this loss in value, provided the cost of the work is less than the increase in the sale price.
- Gather all required reports (DPE, asbestos, lead, electrical and gas) before publishing the listing.
- Notify the current tenant by registered letter within the timeframe set by law.
- Prepare a complete file for the notary: proof of ownership, condominium bylaws and the latest service charge statements.
A successful rental investment depends on practical trade-offs, not one-size-fits-all formulas. DPE rating, LMNP tax treatment, actual costs and sale requirements all change the equation. Take the time to calculate them before signing—that’s what makes the difference between a profitable investment and one that disappoints.
