Rental investment could suffer from the effects of the crisis

The health crisis is forcing investors to delay their rental property purchases. Contrary to what experts predicted, the real estate market seems to be reviving quickly after the containment. Some are concerned, however, about the impact of the health crisis on rental investment. A recent study shows that, if this type of investment should not suffer from the crisis, strictly speaking, the timetable and the objectives of the investors appear slightly modulated. Decryption.



Investments postponed

The health crisis is impacting all areas of the economy. After several weeks of stoppage and uncertainty, the real estate market is recovering, and, it seems, faster than expected. Rental investment, which was very popular before the crisis, is picking up slowly and is likely to grow in the coming months, despite the uncertainties linked to the casualization of tenants. This is at least what emerges from a study carried out in early April by, in partnership with the Observatoire du Moral Immobilier (OMI). If 37% of the investors questioned affirm that the confinement will have had the effect of postponing their rental investment project, 43% of them indicate that they intend to finalize their purchase at the time of the deconfinement or in the months to come. It is important to note that the majority of these investors expect (6 out of 10 investors questioned) a significant decrease in property prices, a drop which therefore becomes a factor justifying the wait and the postponement. The study also shows a climate of confidence among investors, of which only 27% fear a decline in their purchasing power. Before the confinement, rental investment was a popular investment, in particular because real estate remained considered as a safe haven that ensures the protection of financial assets and that rental provides additional income.

Immediate rental yield

According to the same survey, 61% of investors would turn to a property with an immediate rental yield, dwellings or housing complexes inhabited or habitable with a low vacancy rate. 23% of respondents would focus on geographic areas with high rental demand to reduce the risk of vacancy rates. Only 15% of those surveyed plan to resell, imagining to realize a capital gain in the coming years.

The attraction of proximity

The study also indicates that the attractiveness of proximity remains moderate among investors. Roughly three out of ten investors would therefore buy property that is close to home while 61% of investors indicate that this criterion is not decisive in their choice. Current interest rates and the expected fall in property prices confirm the attractiveness of the investment, despite the crisis. Rental yields remain competitive compared to other financial products, despite latent uncertainties.



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