by Schuyler Hoffman
Location is 90% of the factors involved for an apartment to have good short-term rental value in Paris. This means it needs to be located near the center of the city. The areas that are most desirable for renters, and thus buyers, are the 3rd, 4th, 6th, and 7th arrondissements. These are also some of the most expensive areas to buy into.
Evaluating the cost of an apartment involves more than just looking at the price. It also involves comparing that price against other apartments in that area and against those of Paris generally. To do this is you can do as the real estate professionals do, use the average price per square meter. The average cost per square meter for an apartment in Paris was 3,500 euro in 2001 ($3,300). You can roughly convert the cost per square meter to the cost per square foot by dividing by 11. For exact conversions go to http://www.internationalliving.com/pmre/Currency Convertor by Moneycorp Global Money Services/Currency Online.html
The average cost per square meter in the 3rd arrondissement in 2001 was 3,621 euro; in the 4th, 4,141 euro; in the 6th, 5,271euro; and in the 7th, 5,050 euro. Keep in mind this is an average. While it may not seem much more than the Paris average, an apartment that is rentable "as is" will be well above the average in that area, while one closer to the average is probably going to require some work to make it rentable. Another rule of thumb the professionals use is estimating an increase of 10% over last year's prices.
So, what is rentable and how much will it cost, in dollars? A two-bedroom apartment of 70-90 square meters will always stay rented. However, they will cost much more than the average and are rarely on the market. A studio will generally be smaller (15-25 square meters) and probably closer to the average in price, but is often harder to keep rented. The most rentable properties on the market are one-bedroom apartments of 40-50 square meters. In these prime arrondissements this means paying a minimum of $200,000 to $300,000.
If you've ever bought real estate before, then you probably know there is often a difference between what you want and what you want to spend. It will be no different here. If you are serious about buying, and the short-term rental value is a primary consideration, be prepared to spend more to make your investment worthwhile. You may well be able to find a suitable apartment in the price range mentioned above. However, apartments we recently looked at, with good rental value, located in the prime areas, are starting at $400,000 to $500,000.
Of course, cost is a bottom line issue when considering a purchase. But there are a number of other variables to consider as well. How much renovation and redecorating work will the apartment need? What is the building itself like? How charming is the apartment? (Renters love charm.) How close is it to the nearest Métro stop? What conveniences are nearby? The list is endless. Plus, there are legal, financial, and administrative issues involved. The good news is, we can help with all of this. We have developed our own resources to aide those seriously interested in buying an apartment in Paris. I encourage you to contact us and begin your adventure in buying real estate in Paris. We will contact you when we have an apartment that is right for you.