Is it still profitable to rent furnished?

For several years now, you've been planning to buy an apartment to invest in rental property, but the French Finance Law 2025 has upset your plans?

While you were thinking of renting a furnished apartment to take advantage of the tax benefits of LMNP status (non-professional furnished renter), you're beginning to think that it might be wiser to opt for a bare-bones rental? But in 2025, is furnished rental still an attractive option for investors? And what about its tax advantages?

We explain why furnished rental remains a profitable strategy when you're looking to invest in rental property.

How profitable is furnished rental?

To find out whether a rental property, whether empty or furnished, is profitable, you need to look at its rental yield.

To determine this, we need to analyze the return on a rental property (rental income) in relation to all its costs (mortgage, property tax, non-recoverable charges, maintenance, rental management fees, GLI).

The advantages of renting furnished accommodation

The rent for a furnished apartment is higher than for a bare-bones rental. Indeed, as it is equipped with furniture and appliances, landlords can charge tenants a higher rent, in the order of 10 to 30%.

What's more, furnished rentals are highly sought-after, especially in student cities. Many students prefer to live in fully-equipped accommodation, rather than having to buy furniture. Even if the rent is higher, it's still economical. It's also less of a burden when you're planning to move to another city during your studies.

As well as bringing in higher rents,renting a furnished apartment is reassuring for landlords, as they are sure to find a tenant quickly with this type of lease.

The disadvantages of renting furnished accommodation

However, there are a few disadvantages to renting a furnished property.

• The turnover rate is high, as students often rent this type of apartment. As a result, you have to relet regularly to sign a lease with a new tenant.
• Vacancy is also more frequent, given the profile of the tenants. Yes, the rent is higher, but it can be difficult to rent for more than 10 months of the year.
• Last but not least, renting a furnished property requires more maintenance (and sometimes even work). In addition to renovations in the event of damage caused by the tenant, you also need to renew furniture and equipment as they wear out.

Empty or furnished rental for greater profitability?

Not sure whether to rent empty or furnished?

For optimum profitability, it's advisable to rent a furnished apartment if it's a small surface area (studio, T1 or possibly T2) and the property is located close to a university or business school.

On the other hand, if you're planning to rent a T3 or T4, it's best to opt for an empty rental, as this type of property tends to attract tenants who are looking to stay in the same place for several years.

Tax changes to LMNP status: will furnished property still be profitable in 2025?

If property owners want to become investors, it's not just because of the rents generated. It's also because it's attractive from a tax point of view. However, with the evolution of the finance law in 2025, the question arises: is it still worthwhile to rent furnished with LMNP status?

Furnished rental is still attractive in 2025

Good news! Yes, renting furnished accommodation is still worthwhile in 2025!

LMNP status still offers tax benefits, including optimized taxation of rental income thanks to the deduction of depreciation. Simplicity of management also remains a strong point of LMNP status, whether under the micro-BIC or real estate regime.

Long-term rental investment for maximum profitability

However, the French Finance Act 2025 requires property owners to rethink their approach to rental investment.

Before the tax reform, taxable capital gains were calculated without taking into account deducted depreciation. However, since January 1ᵉʳ 2025, depreciation has been added back into the calculation of the capital gain: the tax payable on resale is therefore much higher.

So what do you need to understand as an investor?

Furnished rental remains an attractive option forlong-term rental investment. Capital gains are exempt from income tax after 22 years, and from social security contributions after 30 years.

Buying a property to rent out on a furnished basis for a few years before reselling it, in order to make a capital gain, is therefore no longer a profitable strategy in view of the changing tax environment. As a property owner, it's important to take a long-term view if you want to continue to benefit from the tax advantages of furnished rental.