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Why invest in a period property?
Summary
One of the very first steps when purchasing a property is choosing the type of asset you wish to acquire. The dilemma between buying new or old inevitably arises, along with questions regarding the advantages and drawbacks of each category. Period real estate carries with it specific characteristics that must be identified in order to secure a successful investment.
By definition, this designation refers to houses, apartments, and buildings already constructed and previously occupied. In concrete terms, a dwelling is considered period once it has been completed for more than five years and has changed ownership at least once.
This segment of the market is not solely defined by the age of its buildings. It also distinguishes itself by the diversity of its architecture: Haussmannian apartment blocks, Art Deco buildings, 1960s Brutalist residences, or classic townhouses. Such properties are appealing for their character and the use of noble materials.
Investing in period real estate therefore means gaining access to unique properties while also benefiting from a dynamic market. Demand remains buoyant—driven by the attraction of city centres and the scarcity of available land—while supply remains varied. This balance creates fertile ground for opportunities, both for primary residence buyers and for rental investors.
The advantages of period real estate today
Acquiring a period property offers several advantages:
- Purchase prices are generally more attractive compared with new-build real estate.
- Your investment can be supported by various tax incentives and financial aid.
- A purchase combined with quality renovation enhances the value of your real estate asset, whether residential or rental.
More attractive purchase prices
Investing in older stock is often favoured because of its price per square metre: according to SeLoger.com, a new property costs between 15 % and 20 % more than a period one. In other words, with an equivalent budget, you can acquire a larger, and often better located, property than a new-build.
Lower prices for period properties can be explained by several factors:
- The age of the building: an apartment block constructed 50 years ago, without a lift or refurbished communal areas, will command a lower value than a newly equipped residence.
- The property’s overall condition: old windows, outdated electrical systems, inefficient heating—major renovation requirements weigh heavily on the sale price.
- Authentic charm as a cost factor: for instance, the mandatory use of wooden windows instead of PVC when renovating a Haussmannian apartment may drive up renovation costs, which paradoxically may depress the property’s purchase price.
Note
The defects of a period property are equally powerful arguments in price negotiations. The new-build market generally leaves less room for discussion.
Provided the property complies with current energy performance regulations (DPE), a rental investment in period real estate is often more profitable, as rental income is determined primarily by location and habitable surface area.
For buyers of a primary residence, acquiring a period property allows part of the budget to be allocated to renovation, thereby enhancing both the property’s value and the comfort of its occupants. In other words, investing in older real estate often facilitates capital appreciation on resale.
By working with Maison Kyka, our team guides you through the search, acquisition, and renovation of a period property. This comprehensive approach ensures every aspect of your real estate project is managed seamlessly, allowing you to make a sound investment without stress.
An investment encouraged by favourable legislation
Specific tax incentives for period real estate
There are four main tax mechanisms that may be applied when investing in a period property:
- Malraux Law: allows for a 22 % or 30 % tax reduction on renovation costs, depending on the property’s location, provided the works involve the building in its entirety, up to €400,000. The property must be rented as a principal residence within 12 months of completion.
- Historic Monuments Law: allows for the full (100 %) deduction of restoration costs, provided the building is classified as a Historic Monument or listed on the supplementary register (ISMH), and that the owner undertakes to conserve it.
- Pinel Ancien / Denormandie Scheme: allows a 12 %, 18 % or 21 % tax reduction depending on the rental period (6, 9, or 12 years). Works must represent at least 25% of the total purchase cost, capped at €300,000. Rents and tenant incomes are regulated, and the property must be located in an eligible zone (Action Cœur de Ville, ORT, etc.).
- Cosse Law / “Loc’Avantages”: allows a 15 % to 65 % tax reduction on rental income, up to 85% through a social rental agency. A convention must be signed with the ANAH; rent is capped, tenant income thresholds apply, and the dwelling must meet minimum energy performance (DPE class E, D minimum from 2028).
General tax mechanisms applicable to period real estate
Four general mechanisms may also support your investment:
- Property deficit (“déficit foncier”): allows charges and renovation costs to be deducted from rental income, with deficits carried forward for up to 10 years, under the actual tax regime (unfurnished rental).
- LMNP status (Non-Professional Furnished Landlord): provides favourable taxation for furnished lettings. The investor may opt for the micro-BIC regime, with a flat 50 % deduction on rental income, or the actual regime, allowing depreciation of the property, works and furnishings while deducting expenses (property tax, interest, fees). This often neutralises rental taxation for 10 to 12 years.
- Censi-Bouvard Law: allows an 11 % VAT-exclusive tax reduction on acquisition cost over 9 years, provided the property is a furnished unit within a managed residence (student housing, retirement homes, etc.).
- Tax credit for energy renovation: enables partial deduction of expenses aimed at improving a dwelling’s energy performance (insulation, efficient heating, ventilation), provided works are carried out by RGE-certified professionals.
Loans and financial aid
Purchasing a period property also grants access to a range of financial assistance:
- PTZ (Zero-Interest Loan): for first-time buyers under income conditions, financing part of the purchase of a principal residence, provided renovation works account for at least 25% of the total cost.
- Eco-PTZ: offers up to €30,000 over 15 years to finance energy renovation works (insulation, heating, sanitation), available to both owner-occupiers and landlords.
- ANAH subsidies (National Housing Agency): cover up to 50% of renovation costs (energy efficiency, accessibility), in return for regulated rental commitment (6–9 years), subject to rent and tenant income thresholds.
- Energy Savings Certificates (CEE): provide variable grants depending on the works and location, paid by energy suppliers, provided the work is carried out by RGE-certified contractors.
Strong value-enhancement potential through renovation
For those wishing to shape a property to their own taste, period real estate proves particularly attractive due to its strong potential for transformation and value creation on the market.
Three main levers reinforce this strategy:
- Location: older properties are generally found in prime areas—lively city centres, historic quarters, or districts well served by public transport. Such strategic locations naturally attract tenants and future buyers alike.
- Renovation: opening up a kitchen, rethinking spatial circulation, optimising natural light, or improving insulation are all improvements that enhance a property’s appeal and justify immediate revaluation. For rental purposes, renovating an apartment ensures faster occupancy, higher rent, and reduced vacancy rates, particularly in “high-demand” zones such as Paris.
- Market resilience: in the long term, real estate remains a safe haven. According to INSEE, prices for period housing in France more than doubled between 2000 and 2020, with an average annual increase of 4–5 %. Despite occasional downturns, property remains a robust hedge against inflation and a resilient asset class.
Advice
Be careful not to overestimate potential returns: purchasing a property requiring renovation means carefully calibrating your budget and focusing on value-enhancing improvements. Certain “invisible” costs (plumbing, electrical) are indispensable but have a limited impact on resale value.
Anticipating the drawbacks of investing in older properties
Avoiding the pitfalls of period real estate is primarily about anticipating them from the outset:
- Plan for higher acquisition and maintenance costs than with new-build real estate.
- Anticipate potential renovation and compliance works.
- Familiarise yourself with legislation and co-ownership rules if you intend to rent out your future property.
Higher acquisition and maintenance costs
Notarial fees average 7–8 % of the purchase price, compared with only 2–3 % in new-builds. This means you must plan for a larger personal contribution to cover this unavoidable cost.
Additional charges may also arise post-acquisition. In an older building, maintenance represents a heavier burden on the budget. Roofs, common areas, or ageing plumbing require ongoing attention. Certain repairs can be costly: façade restoration, replacement of a collective boiler, refurbishment of stairwells. These operations, essential to preserving the property’s value, may significantly increase annual expenditure.
Advice
Before purchasing, request the latest minutes of the co-ownership’s general meetings. These will reveal whether major works have been approved but remain unpaid—costs you will need to assume even as a new owner.
Anticipating renovation and compliance works
Renovation and regulatory compliance are almost systematic when acquiring a period property.
A comprehensive survey prior to purchase is essential and facilitates:
- Identifying priority works: thermal and acoustic insulation, electrical system upgrades, plumbing, or heating.
- Detecting potential hidden defects such as damp, water infiltration, or the presence of lead or asbestos.
Attention
Although the law provides protection against hidden defects, legal recourse against the seller remains lengthy and costly. You must demonstrate that the defect is serious enough to invalidate the sale or justify a significant price reduction—something not always straightforward.
These sometimes burdensome works may delay occupancy and require rigorous project management. Yet they also offer real opportunity: optimising layouts, maximising light, or improving energy efficiency ratings. A well-conceived home renovation project reconciles comfort with long-term asset appreciation.
By engaging professionals such as Maison Kyka, you gain peace of mind: a clear budget estimate, meticulous planning, and compliance with prevailing standards.
Specific challenges of renting out period properties
Purchasing with a view to renting comes with certain regulatory constraints that may reduce expected profitability.
In large cities and “high-demand” areas such as Paris or Île-de-France, rental prices are capped by the ALUR Law. Rent cannot exceed a prefectoral ceiling, limiting margins even if the property has been meticulously renovated.
ADVICE
To circumvent rent control regulations, you may opt for a Civil Code lease. This type of rental agreement allows full freedom in setting the lease term, termination conditions, and rent amount, but it applies exclusively to corporate housing, secondary residences, and seasonal rentals.
The issue of energy performance ratings (DPE) is equally critical. Since January 2025, it is forbidden to rent out F- or G-rated dwellings (“energy sieves”). A large proportion of period stock falls into this category. Before investing, always check the energy rating and plan for necessary upgrades.
Co-ownership may also impose restrictions, such as prohibiting short-term lettings (Airbnb-type rentals) or limiting certain structural works (e.g. installing a lift). Such constraints may directly affect your rental project and expected returns.
In summary: the pros and cons of period real estate
Are you considering investing in an older property? With Maison Kyka, benefit from bespoke guidance from acquisition to finishing touches, and create the home of your dreams.
