Cities where investing in an existing thermal power station yields higher returns compared to new construction for real estate.
Renovating a Discounted 'Leaky Home' Could Be a Profitable Real Estate Investment. Here's Where It's Worth Doing.
© our site/Freepik By Christine Lejoux Real estate department head Published on , last modified at
Leaky homes, energy-guzzling dwellings rated E, F, or G on the energy performance diagnosis (DPE), are not always a turn-off for property buyers. According to Guillaume Martinaud, president of the Orpi real estate cooperative, "some first-time buyers are willing to buy a leaky home, which is synonymous with a discount." These homes sell for 7% to 15% less than those rated D, as per Grand Paris notaries. Buying and renovating a leaky home could be more profitable than investing in a new property, but it depends on the local real estate market and the disparity between the cost of new and old properties.
While we don't have specific data from the Maslow.immo platform on cities where the prices per square meter of new residential real estate are over 1,000 euros more than that of leaky homes E and F, it's a strategy worth considering in cities with a significant price gap between the two.
First-time Buyer versus Rental Investor
If new homes are 15% to 20% more expensive than older properties, it's due to factors such as the cost of land acquisition, construction materials, VAT, and new environmental standards. A first-time buyer in Boulogne-Billancourt, for instance, spends 2,200 euros less per square meter on a leaky home compared to a new home. Rental investors, on the other hand, may have to foot the bill for energy renovation before 2028 for F-rated homes and 2034 for E-rated homes, which can be costly.
However, even for a rental investor, buying and renovating a leaky home can be more financially beneficial than investing in a new one. By spending approximately 750 euros per square meter for energy renovation, an investor spends less than they would on a new property, especially in the Ile-de-France region where seven of the ten cities with the largest price gap between new and leaky homes are located.
Warning on the Cost of Energy Renovation
On the contrary, in cities like Caen and Lille, investing in new properties is more cost-effective due to the lower price per square meter and the mandatory energy renovation costs for rental properties. It's important to weigh these factors to ensure a profitable investment.
Good news for homebuyers: mortgage rates stabilize in May
The Bottom Line
Investing in renovating a discounted leaky home can be a wise decision, but it's crucial to conduct thorough research on the local real estate market and evaluate the cost of energy renovation. Dive into our platform to find detailed information on energy renovation subsidies, costs, and professional services.
Housing Tax: Government Closes Door to Any Return, Even as a "Modest Contribution"
>> Our Service - Energy Renovation: Calculate the Amount of Your Subsidies (MaPrimeRénov', CEE...) and Find the Right Professional for Your Work See Their Publications Related Articles * Real Estate Investment* Property Purchase* Rental Real Estate* Energy Performance Certificate (EPC)* Energy Renovation
- First-time buyers might consider purchasing a leaky home, as some are willing to accept the discount associated with these energy-inefficient dwellings.
- According to Guillaume Martinaud, president of the Orpi real estate cooperative, renovating a leaky home could potentially result in more profit than investing in a new property.
- In cities with a significant price gap between new and leaky homes, buying and renovating a leaky home could be more financially beneficial for both first-time buyers and rental investors.
- Conducting thorough research on the local real estate market and evaluating the cost of energy renovation is crucial to ensure a profitable investment in a leaky home.
- For personal-finance management and real-estate investing, consulting with the Maprimerénov service from our platform can provide valuable information on energy renovation subsidies, costs, and professional services, ultimately helping one make informed decisions.
