A Guide to Investing in Paris Short Term Rentals
- UpperKey
- Dec 7, 2023
- 10 min read
Updated: Jun 9
Paris is one of the top tourist destinations in the world, attracting over 30 million visitors per year. With such high tourism demand, short-term rentals like Airbnb have become increasingly popular in the French capital. The Paris region and the Île-de-France region are not only economic powerhouses but also key real estate hubs, making them highly attractive for property investment. Compared to other major French cities and French cities such as Marseille, Paris stands out for its unique combination of global appeal, high rental demand, and strong short-term rental profitability.
For buy to let investors interested in real estate in France, this article serves as a comprehensive guide, with a particular focus on the Paris market. For property investors, Paris short-term rentals can provide excellent returns and strong occupancy rates. This guide from UpperKey, which serves as a guide to investing in paris short term rentals, covers everything you need to know about investing in Paris holiday rentals by answering some commonly asked questions.
Table of Contents
Introduction to the Paris Real Estate Market
The Paris real estate market stands out as one of the most dynamic and sought-after in Europe, offering a wealth of opportunities for those interested in real estate investment. With its blend of historic charm, cultural vibrancy, and economic strength, Paris attracts both local and international buyers looking to purchase properties for personal use or as rental investments. The city’s rental market is particularly robust, with high demand for both long term rentals and short term rentals, especially in the central arrondissements where rental yields tend to be strongest.
For investors, understanding the nuances of the Paris real estate market—including average rental yields, market trends, and the factors driving demand—is essential for making sound investment decisions. Whether you’re considering a pied-à-terre, a buy-to-let property, or a short-term rental, a comprehensive grasp of the local real estate market will help you identify the best opportunities and maximize your returns.
Are short-term rentals allowed in Paris?
Yes, short-term rentals are legal in Paris, reflecting the dynamics of the parisian real estate market. However, there are some regulations in place that owners need to be aware of:
If the property is your primary residence, you can only rent it out as a short-term or seasonal rental for up to 90 days per year. Renting beyond this limit is not allowed, and you may need a permit depending on the circumstances. Fines can apply if these rules are not followed.
Home sharing (renting a room while the owner is present) is not subject to the 90-day limit.
Hosts must register with the local town hall and display their registration number in listings. There is also a tourist tax to be paid.
Ensuring you follow all the correct rules and regulations is important for running a legitimate and compliant Airbnb business in Paris, especially when your goal is generating rental income.
Why do people like short-term rentals in Paris?
Guests choose holiday rentals over hotels for many reasons:
More space and amenities like kitchens and washing machines
Ability to live like a local in a residential apartment
Lower cost compared to equivalent hotel suites
Self check-in flexibility without front desk restrictions
Unique locations unavailable elsewhere like historic buildings
Experiencing authentic neighbourhoods and local culture
Short-term rentals allow travellers to truly immerse themselves in a destination, rather than just visiting briefly as a tourist. By staying in a real Parisian apartment, guests get to shop at little local markets, eat at cafes the locals frequent, and gain insight into the Bohemian Parisian lifestyle. Wandering side streets reveals a different view of the city rarely seen. This appeals greatly compared to anonymous chain hotels situated in crowded tourist areas. Living among Parisians offers a special travel experience many short-term rental guests crave.
Is Paris a good place to invest in property?
With high tourism demand and property prices rising over the last decade, Paris real estate has proven a strong real estate investment. Factors making it favourable include:
Mass tourism is driving occupancy - the city sees 30 million visitors per year
There is a shortage of hotels and accommodation to meet tourism demand
High rents and rising prices provide capital growth
Strong protections in place for landlords and an established rental market
Market tension in Paris, caused by high demand and limited supply, drives up property prices and increases rental returns for investors.
The prime central arrondissements like 1st, 4th, 5th and 6th are ideal areas for investors to target.
Real estate investors are particularly attracted to Paris due to the strong performance of rental property in the city. Typical rental yield for short-term rentals in Paris ranges from 3% to 5%, with rental return varying by district and property type. In addition to immediate income, property appreciation offers a significant long-term benefit for those investing in Paris real estate.
Can a foreigner own an apartment in Paris?
Yes. There are no restrictions on foreigners purchasing real estate in Paris. The process to buy property is the same for foreigners and French citizens, with no legal distinction in rights or procedures. The process involves:
Securing finance as a non-French resident
Setting up a French bank account
Finding and making an offer on the property
Signing a purchase agreement at the notary
Completing due diligence and providing required documentation, such as proof of identity, proof of funds, and a preliminary sales agreement
Finalizing the sale with the notary, who registers the property in your name
It’s advisable to engage a bilingual real estate agent and lawyer to help navigate the buying process.
Be aware that buying costs are high at around 7% of the purchase price. Capital gains tax also applies for non-residents.
Furnished Accommodation Options in Paris
Furnished accommodation has become a cornerstone of the short term rental market in Paris, catering to the needs of tourists, business travelers, and expatriates seeking comfort and convenience. For property investors, offering furnished accommodation through short term rental platforms can significantly boost rental income, as these properties are in high demand year-round. However, property owners must navigate a range of local regulations, including registering their property with the local town hall and displaying a valid registration number in all listings.
Compliance with these rules, along with the payment of the required tourist tax, is essential to operate legally and avoid penalties. Additionally, maintaining high standards of safety and quality is crucial for attracting guests and securing positive reviews. While furnished accommodation can be a lucrative investment, it’s important for property owners to factor in the costs of furnishing, ongoing maintenance, and regulatory compliance to ensure a successful and sustainable rental business.
How do I start an Airbnb in Paris?
The key steps to starting a Parisian Airbnb include:
Research the best area to buy based on rental demand, prices, and returns
View listings and make an offer on a suitable investment property
Finance the purchase as a foreign investor
Furnish the apartment appropriately for holiday lets
Photograph the property, create the Airbnb listing and calendar
Implement a pricing strategy based on seasonal demand
Add house rules, terms and conditions
Manage bookings, check-ins, cleaning and maintenance
Utilising a property management company like UpperKey can help look after guest communications, cleaning, and key handovers.
Purchase Price and Financing
When considering purchasing real estate in Paris, it’s important to be aware that property prices can vary widely depending on the arrondissement, property type, and overall condition. The average price per square meter in Paris typically ranges from €10,000 to €20,000 or more, with prime locations commanding the highest premiums. For non residents, securing financing is possible but may require a larger down payment—often between 20% and 30%—as well as thorough documentation of income and creditworthiness. In addition to the purchase price, buyers should budget for notary fees, property transfer taxes, and real estate agent commissions, all of which can add a significant amount to the total investment. Working with an experienced real estate agent is highly recommended to navigate the complexities of the Paris property market and ensure a smooth transaction from start to finish.
Where is the best place to invest in Paris?
The 1st arrondissement tops the list for Paris Airbnb investment. Other popular areas include Le Marais, Saint Germain des Prés, Montmartre, and neighbouring arrondissements like 10th and 11th.
When deciding, consider things like:
Airbnb demand and occupancy rates
Tourist sites, attractions, transport links
Rental yields in the area
Future capital growth potential
Central locations near Metro stations generally perform best. Proximity to cafes, restaurants and shops is also ideal.
Comprehensive Analysis for Investment in Paris
Before embarking on a rental investment project in Paris, conducting a comprehensive analysis is essential to maximize your chances of success. This process involves assessing key factors such as current property prices, rental demand, and potential rental yields in both the Parisian real estate market and the broader French real estate market. Investors should carefully evaluate the location, size, and condition of the property, as well as the target rental market—whether focusing on long-term tenants or short-term guests.
Understanding the tax implications is also crucial, including the distinction between industrial and commercial profits (BIC) and any available tax advantages for property owners. By thoroughly analyzing the real estate market and considering all aspects of generating rental income, investors can make informed decisions, mitigate risks, and optimize their returns in the competitive Parisian real estate landscape.
How much do you make on Airbnb in Paris?
Paris Airbnb yields average around 2-5% for long-term rentals. However, short-term Airbnb returns are far higher. According to data company AirDNA, Parisian whole apartments yield over 9% on average. Top performing Airbnbs can make well over €8,000 per month in the peak summer season, significantly contributing to your annual rental income.
By buying an apartment in a popular central location at the right price, yields of 6-10% per year are possible. Deduct your expenses and financing costs, and €3,000 - €5,000 monthly income is feasible at current market prices.
What is a good ROI for short-term rental?
A good target is for short-term rental returns to beat 8% per year. The best Paris Airbnbs achieve over 10%. This factors in average occupancy rates around 70-80% in strong locations.
For your ROI calculation:
Annual Revenue – Operating Costs = Annual Profit
Annual Profit / Total Property Cost x 100 = ROI %
When considering ROI, it's important to compare the long term investment potential of Paris real estate to other options like the stock market. Both real estate and the stock market have shown strong returns over a 20-30 year horizon, allowing investors to ride out market fluctuations and benefit from historical growth trends.
Additionally, certain government programs may offer a tax advantage, but investors should carefully weigh these benefits against the overall rental returns to ensure the investment remains attractive after accounting for tax advantages.
Property Management and Maintenance
Successful rental investment in the Paris real estate market hinges on effective property management and diligent maintenance. Property owners must handle a range of responsibilities, from finding reliable tenants and managing rental income to ensuring the property remains in excellent condition through regular upkeep and repairs. Many investors choose to partner with a professional property management company to streamline these tasks and ensure compliance with local regulations, such as registering with the local town hall and paying the required tourist tax.
Regular maintenance not only preserves the property’s value but also helps maintain high occupancy rates and positive guest experiences. By prioritizing property management and adhering to all local regulations, property owners can protect their investment and achieve consistent returns in the competitive Paris real estate market.
How is Airbnb income taxed in France?
Income tax is due on Airbnb rental profits in France. This is done via self-assessment reporting under the Micro BIC scheme.
You declare revenue minus deductible expenses like cleaning, guest supplies and agency fees. 50% of the balance is then assessed as taxable income.
Alternatively, you can opt for the actual system, which is a more precise tax regime requiring detailed accounting and stricter financial management. Under the actual system, you can deduct actual expenses incurred, which may provide greater tax advantages compared to the Micro BIC scheme. It is often necessary to hire a chartered accountant to ensure compliance with tax authorities and to properly complete the more complex tax declarations required by this regime.
French social charges of €800-€3000 also apply depending on income level. If your rental income exceeds certain thresholds, you are required to pay contributions and social security contributions, with rates such as 17.2% applying in some cases. The tax authorities oversee the collection of these social security contributions and ensure compliance with all tax obligations. Accounting help is advisable given the complexity.
Does France plan to close the tax loophole benefiting Airbnb?
The French government has announced plans to increase tax enforcement on short-term rental platforms like Airbnb. Currently, many hosts don't declare their rental income, which costs the state significant tax revenue.
As of late 2024, new measures are in effect:
Platforms like Airbnb now withhold income tax before host payouts
Host ID and income data are automatically reported to French tax authorities
* These changes were introduced under Loi n° 2024‑1039, strengthening transparency and compliance for short-term rental income in France.
These rules now significantly reduce opportunities for undeclared income, making compliance essential for all hosts. With all this in mind, you may want to partner with a property management company if investing in a Paris holiday rental is something you would like to do. Companies like UpperKey can assist hosts by:
>> Finding the right property with rental investment potential and organising viewings
>> Project managing any required renovations and decor installation
>> Creating eye-catching listing photos, ad copy and boosted online exposure
>> Managing all guest communications before, during and after each stay
>> Conducting check-ins/outs, cleaning, and key handovers
>> Optimising pricing rates based on demand forecasts
>> Handling all accounting, payments and regulatory compliance
Using an established local provider gives peace of mind that your investment is well cared for and maximising profitability based on price per square while you focus on other endeavours. With strong potential returns on offer, the expenditure is well justified.
Despite some regulatory challenges, Paris remains a top global city for short-term rental investing. Strong tourism demand, excellent occupancy prospects and high returns make a Paris Airbnb an appealing business. Targeting a central location, focusing on yield optimisation and utilising property management assistance from UpperKey can allow investors to realise profitable income potential.
FAQs
Q1: Is Paris a good place to invest in property?
Yes, due to high rental demand, strong tourism, and limited housing supply, Paris remains one of Europe’s top property investment markets.
Q2: Are short-term rentals in Paris still a good investment?
Yes, especially in central arrondissements. Despite tighter regulations, well-managed short-term rentals can achieve strong returns.
Q3: What is the average rental yield in Paris?
Long-term rental yields average around 3%, while well-located short-term rentals can reach 6–9%, depending on property type and management.
