Student residences offer many advantages: easy management and maintenance, moderate cost, tax breaks, etc. As a dynamic contributor to society, Bouygues Immobilier undertakes Residence and Service developments that include a range of attractive student accommodation options.
Three good reasons to invest in student accommodation - 28 July 2008
Take advantage of a booming market
- Benefit from favourable market conditions
Demand for student accommodation is high, and public sector supply is falling short. According to a survey conducted in 2006 by the Observatoire National de la Vie Etudiante, one-third of students struggle to find suitable accommodation, and that figure rises to two-thirds in the Paris Region. Against this background, residences offered by the private sector are proving extremely popular. In today's market, the private sector is building 3 residences for every 1 provided by the state. This strong appetite for private sector accommodation is fuelled by increasing expectations in terms of comfort and convenience: students want furnished accommodation with features that will leave them free to focus on their studies.
- Profit from permanent market demand
With stable demographics in the 18-24 age range and students spending longer in full-time education, the flow of young people entering further education is constant. The sustained numbers of post-graduate students is resulting in a continued rise in the average age of the student population. The stock of rented accommodation therefore enjoys a new wave of demand every year, and given the fact that all student residences are near campuses, finding tenants quickly is never a problem
- An assured good return on your investment
According to the 2006 Observatoire National de la Vie Etudiante survey, you can expect a rental yield of between 5% and 7% from a student residence, depending on location. Student residences offer excellent prospects for medium-term growth. The lack of supply, rising demand, a yield well above that offered by traditional products and limited risk all combine to explain the growing interest being shown in this market by investors.
Good to know : According to the 2006 Observatoire National de la Vie Etudiante survey, 60% of students move out of their family homes when they enter further education.
Minimise your investment and maximise your return
- Your initial investment is reasonable
Investing in student accommodation is still less costly up-front than other types of buy-to-let investment. The fact is that buying a student room costs much less than a large apartment, and the ongoing expenses are proportionately lower too.
Unlike an apartment or a house, student accommodation offers you the opportunity to build a property portfolio at modest up-front cost
- You benefit from tax breaks
The way your rental income is taxed depends on your status. As a furnished property landlord, you have the choice of 2 statuses:
LMP (Loueur en Meublé Professionnel or Professional Furnished Property Landlord)
To be treated as a professional rented property landlord, you must be registered in the registre du commerce et des sociétés. In addition to this, your annual rental income (including tax) must be higher than €23,000 or represent at least 50% of your total income. You will then be taxed on the net gain you make. Where the difference between your rental income and expenses is a negative amount, you may deduct this loss from your other income (deductions include the purchase cost of the property, excluding any depreciation). When you sell the property, you will be liable to business capital gains tax on any gain you make. You will receive total exemption from capital gains tax if, after 5 years of LMP status, your rental income for the two most recent years does not exceed €250,000.
LMP (Loueur en Meublé Professionnel or Professional Furnished Property Landlord)
To be treated as a professional rented property landlord, you must be registered in the registre du commerce et des sociétés. In addition to this, your annual rental income (including tax) must be higher than €23,000 or represent at least 50% of your total income. You will then be taxed on the net gain you make. Where the difference between your rental income and expenses is a negative amount, you may deduct this loss from your other income (deductions include the purchase cost of the property, excluding any depreciation). When you sell the property, you will be liable to business capital gains tax on any gain you make. You will receive total exemption from capital gains tax if, after 5 years of LMP status, your rental income for the two most recent years does not exceed €250,000.
LMNP (Liqueur en Meublé Non Professionnel or Non-Professional Furnished Property Landlord)
You will be treated as a non-professional landlord if you are not registered in the registre du commerce as a professional furnished property landlord or if your annual total rental income (including tax) is less than €23,000 or represents less than 50% of your total income. Your tax liability is calculated in the same way as if you were a professional landlord. Your only obligation is to keep an up-to-date account showing all rental income received. This book must be available for inspection by the tax authorities on demand. However, any losses you make cannot be offset against your total income. They are deductible only from any gains made as a result of other non-professional BIC (Bénéfices Industriels et Commerciaux - Business Income) activities during the current year or the 5 preceding years (this excludes micro-BIC status). For non-professional landlords, gains made on the sale of furnished property are taxable under the private property capital gains arrangements. Total exemption from capital gains tax is granted if you have owned the property for over 15 years.
-The BIC and micro BIC tax schemes
When you rent out furnished accommodation, you are conducting a business, and your income is therefore taxable as BIC (Bénéfices Industriels et Commerciaux - Business Income). There are 2 business tax schemes: the micro BIC and régime réel actual profits schemes.
- If your rental income for 2007 was €73,300 or less, you will be covered by the micro BIC scheme. Under this scheme, you will receive a rebate in respect of expenses up to 71% of your declared rentals.
- If your deductible expenses are over 71% of the rents you received, then you should opt for the régime réel tax scheme, which offers you the option of deducting the actual amount of your expenses.
The VAT status of your rental will depend on the services you supply with the accommodation. For the investor to be liable for VAT, the manager (commercial lettings operator) must offer 3 of the following 4 services:
- breakfast
- regular cleaning of the premises
- supply of household linen
- reception service
If the development is subject to VAT, the investor can reclaim the VAT element of the purchase price.- regular cleaning of the premises
- supply of household linen
- reception service
Some operators may offer services such as: laundry, pool, sports hall, multimedia room, etc. A real plus for tenants!
- The opportunity to invest at little or no cost to yourself
Use our simulator to make your calculations and view your monthly payments.
Having your property looked after by a management company
Bouygues Immobilier develops its Residence and Services schemes in partnership with reputable professional property management companies (like Réside Etudes). The co-owners of student residences sign a commercial lease with the residence management company for a minimum period of 9 years.
The management company then:
The management company then:
- pays you a rental regardless of the residence occupancy rate. The amount of these rentals is reviewed annually in line with the index referred to in the contract
- selects tenants and collects the rent
- takes care of all the necessary maintenance work
-
insures the property
Contact us
| Régions | Directions régionales Bouygues Immobilier | Contacts | |
| Alsace | Direction Régionale Est | +33 (0)3 88 37 87 24 | |
| Aquitaine | Direction Régionale Aquitaine | +33 (0)5 56 00 18 00 | |
| Basse Normandie | Direction Régionale Nord Ouest | +33 (0)3 20 43 82 46 | |
| Bourgogne | Direction Régionale Rhône Bourgogne Auvergne | +33 (0)4 72 68 79 73 | |
| Bretagne | Direction Régionale Atlantique | +33 (0)3 20 43 82 46 | |
| Centre | Direction Régionale Centre Loire | +33 (0)2 47 75 24 60 | |
| Champagne Ardenne | Direction Régionale Est | +33 (0)3 88 37 87 24 | |
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Franche Comté |
Direction Régionale Est (Haute Saône) | +33 (0)3 88 37 87 24 | |
| Direction Régionale Rhône Bourgogne Auvergne | +33 (0)4 72 68 79 73 | ||
| Haute Normandie | Direction Régionale Nord Ouest | +33 (0)3 20 43 82 46 | |
| Ile de France | Direction Régionale Ile de France | +33 (0)1 55 38 27 78 | |
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Languedoc Roussillon Midi Pyrénées |
Direction Régionale Midi Pyrénées Languedoc Roussillon : | ||
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Perpignan
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+33 (0)4 68 51 55 10 | ||
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Toulouse
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+33 (0)5 62 14 36 20 | ||
| Lorraine | Direction Régionale Est | +33 (0)3 88 37 87 24 | |
| Nord-Pas-de-Calais | Direction Régionale Nord Ouest | +33 (0)3 20 43 82 46 | |
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Pays de la Loire |
Direction Régionale Atlantique | +33 (0)3 20 43 82 46 | |
| Direction Régionale Centre Loire (Maine et Loire) | +33 (0)2 47 75 24 60 | ||
| Picardie | Direction Régionale Nord-Ouest | +33 (0)3 20 43 82 46 | |
| Poitou Charente | Direction Régionale Aquitaine ( Charente ) | +33 (0)5 56 00 18 00 | |
| Direction Régionale Atlantique ( Charente Maritime ) | +33 (0)3 20 43 82 46 | ||
| Direction Régionale Centre-Loire ( Deux-Sèvres, Vienne ) | +33 (0)2 47 75 24 60 | ||
| PACA | Direction Régionale Provence | +33 (0)4 96 11 78 68 | |
| Direction Régionale Côte d'Azur | +33 (0)4 93 18 43 03 | ||
| Rhône Alpes | Direction Régionale Rhône Bourgogne Auvergne | +33 (0)4 72 68 79 73 | |