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What is "Paris Corporate Housing"
Furnished rental vs. Unfurnished rental
Long-term rental vs. short-term rental
Getting ready for renting my property
What is "Paris Corporate Housing"
How do you operate?
Paris Corporate Housing is a real estate agency, holding the Brokerage card T14264 and the Property Management card G5883 issued by Paris Police Authorities.
We have strong connections with corporate clients, allowing us to find the best tenants on the market for our landlords.
Why focus on Corporate?
Coroporate clients are simply the best clients.
- Companies always pay their rents, they are the "AAA" of tenants.
- Apartments are perfectly maintained in 99% of the cases, either because we package the rental with cleaning services, or simply because employees do not want to have issues with their HR departments in the case that their apartment is signaled to these departmens as unclean or poorly maintained.
- Lease contracts with Corporate clients are more flexible, esp. on the fees.
What geography do you cover?
We focus on the location that are the most attractive to corporate clients.
- In Paris, these are the 8th, the 16th, the 17th arrondissements (particularly the western part of the 17th), the 15th (particularly the northern portion), and also the 1st, 2nd, 3rd, 4th , 6th, and 7th arrondissements
- Locations along Metro line 1, from Pont-de-Neuilly to Bastille
- Some western suburbs: Neuilly, Levallois, Boulogne (north), Suresne.
What type of apartment are you looking for?
We focus mainly on the properties expats are looking for
These properties are renovated or in very good condition, and vary from 30 sqm (~320 sq ft) to 300 sqm (~3200 sq ft)
These properties can be furnished or unfurnished.
What is your background?
The 2 founders, Thibaut Allix (Essec) and Xavier Daché (Centrale), met at Bain and Company, where they were strategy consultants.
They traveled extensively and realized that the "corporate housing" was a business segment in Asia and the US that was virtually not addressed in France.
They also felt that many landlords were expecting a high level of commitment and professionalism which is common in the consulting world, but not always matched in the real estate industry in Paris.
What is your company vision?
We want to become the #1 corporate housing agency in Paris and a key player in the premium residential market in Paris for rental and buy-sell segments.
We also aim at becoming the preferred real estate agency for owners of premium properties in Paris.
To reach this goal, we invest significantly:
- In IT systems to be the fastest on the market
- In Marketing, to show properties at their best through beautiful photos and videos.
- In People to assemble the best team.
Furnished rental vs. Unfurnished rental
What is your typical rental duration?
- 90% of the leases we sign are 12-month renewable contracts, which is the norm on the market
- Very often, the lease is renewed. The average stay is around 16-18 months
- All leases are 3-year renewable contracts
- Expats choosing unfurnished rentals typically stay between 3 and 5 years.
In terms of taxes, which is most attractive between furnished and unfurnished rental?
Furnished rentals are generally the most attractive option in terms of taxes.
The main reason is that it allows owners to amortize the property (over a duration of between 30 and 50 years) on top of deducting all charges. This generally avoids the needs to pay taxes for the first 5 to 10 years.
I own my property through a "SCI", can I rent furnished?
The short answer is "no".
A "SCI" is meant to rent only unfurnished properties. If you want to rent your property as furnished, one solution is to convert the "SCI" to a company-like status the "SCI à l"IS", meaning the SCI will pay taxes like companies do. This can be very expensive particularly if you sell the property. Another solution is to create another company (ex. a "SARL"), which will be the tenant of the SCI, and which will buy the furniture to rent the property as furnished to the final tenant. This is complicated and comes with taxes at the SARL and SCI levels.
Long-term rental vs. short-term rental
Why don't you offer short term rental?
Most short term rentals in Paris are illegal, or available for a period of time which is too short for our business model.
Short-term furnished rentals in Paris are legal only under strict conditions:
- If the property is the landlord's main residence, it can be rented on a short-term basis for 4 months maximum per year.
- If the property is not the owner's main residence, it cannot be rented on a short-term basis, unless the owner "buys" the right to do so. This process is complicated and very expensive (~2000€ per sqm).
What are the benefits of long-term rental?
Renting long-term has 3 main benefits:
- Occupancy rates are very high and very predictable (in short-term rentals, outside of the most touristic areas, occupancy can drop significantly, esp. from mid-Jan. to mid Apr. and from mid. Oct to mid. Dec.
- Wear and tear is much lower than in short-term rentals (less prone to "parties", less suitcases bumps...)
- In case of water damage or building renovations, it's unlikely a "long-term" tenant will leave, while the apartment could hardly be rented on a short-term basis
Unfurnished rental: what is the tax system?
Unfurnished rental income must be filed under "Revenus Fonciers" and are subject to revenue taxes and social withholdings.
- If your rental income is lower than 15,000€, you can benefit by default from the "Micro-Foncier" status and you are entitled to a 30% flat reduction. - If you decide to choose the "Foncier au réel" status or if the rental income is above 15,000€, you can deduct all charges (incl. interests on a mortgage). A specialized accountant is almost necessary.
Furnished rental: what is the tax system?
Furnished rental income must be filed under "BIC" (Bénéfices Industriels et Commerciaux) and is subject to revenue taxes and social withholdings.
- If your rental income is lower than 32,900€, you can benefit by default from the "Micro-BIC" status and are entitled to a 50% flat reduction.
- If you decide to choose the "BIC au réel" status or if the rental income is above 32,900€, you can deduct all charges (incl. interests on a mortgage) and amortize the property, which usually leads to tax elimination. A specialized accountant is almost necessary.
What if I am a foreign resident?
Rental income from a French Property must be filed on a tax return in France.
The tax rate for landlords living outside of France is 20%.
Also, since 2012, rental income is subject to social security withholdings (15.5%). A decision form the European Justice Court in February 2015 should force France to suspend the social security withholdings. However, the bill has not yet been passed, and it will most likely concern only landlords residing in the European Union.
What if I own the property through a company (SCI, SARL, ...)?
You will probably need the help of a specialized accounting firm. The main implication tax-wise lie in the property amortization.
During the rental period, you save on taxes (same as "LMNP" status), but unlike the "LMNP" status, if you decide to sell the property, the company will pay taxes on the amortization. Also, if the shareholder wants to withdraw money from the company, it is usually accomplished through a dividend payment, which is also subject to taxes.
How to calculate the taxable base of my rental income (furnihsed or unfurnished rental)?
For furnished and unfurnished rental, the taxable base calculation starts by adding up the annual rent, and by substracting all the deductible charges like the mortgage interests, the cost of renovation or any on-going expenses for maintenance.
The main difference between furnished and unfurnished rental is the possibility to amortize the asset in the "BIC au réel" tax system. This has a major impact by stongly reducing the taxable base in case of funished rental.
Can you help me handle my taxes?
If we manage your property, we will send you a document every year to help you prepare your tax return.
We however do not file the tax returns on behalf of landlords: we can recommend a specialized accounting firm in the case that you need assistance.
Can you help me clarifying which tax system would be most relevant to my personal situation?
Yes, we can provide detailed explanations on how the tax system works. However, we are not "tax experts" and we always recommend our clients to consult a professional tax expert, or notary, or specialized accountant.
Do you rent only to corporate clients?
This is our specialty, so if you want to rent your apartment only to a corporate client, this will be the only profile we will search for.
However, if your property is not a perfect match for a corporate tenant, or if you work with other agencies not focusing on corporate clients, we will also look for prime non-corporate candidates to optimize your occupancy rate.
On average, how long do you need to rent a property?
If the rent is set at market price, the apartment ready to be visited and if it is a match for corporate clients' criteria, the occupancy rate is above 90% and in fact near 100%.
This means that in most cases it takes less than 2 weeks to find a tenant. There can be then a short delay before the actual beginning of the lease contract.
To "win the race", we anticipate as much as we are able by beginning the search for tenants well in advance (4 to 6 weeks for furnished rentals, 4 to 8 weeks for unfurnished rentals).
What are the fees for the tenant search?
- Corporate lease: no tenant search fees
- Main residence: 1 month's rent including charges
- Corporate lease: 1 month's rent including charges
- Main residence: 1.2 month's rent including charges
Do you impose exclusivity?
No we do not impose it, but we incentivize owners to give us an exclusivity, at least for a month.
We have higher-than-average marketing costs, ensuring full commercial coverage of our corporate tenant portfolio.
In addition, the ongoing creation of didactical material for owners (info on corporate rentals, evolution of the law, tax regimes and their ever-changing rules, etc).
Please refer to our price grid.
Does your service offering cover property management?
Yes, property management is one of our key services, and we do our best to deliver top-notch quality.
Property management is very important to some landlords who live abroad or who do not have enough time to deal with the issues that accompany renting a property.
It can also be very important to the tenants when it comes to deciding on a property. With a property manager, they know they will always have someone reactive to intervene in case of a problem.
What tasks do you take care if you manage my property?
We take care of both financial and operational aspects.
- On the financial side: we bill for the rents, ensure they are paid, pay bills related to the property when needed, pay the rent to you and prepare a yearly document for your tax filing.
- On the operational side: we take care of the walk-in and walk-out inspections, manage all questions from the tenant, organize the cleaning between tenants, and deal with all potential issues for which landlords are responsible, from dealing with water damage to having a refrigerator repaired. More details here.
What are the fees for property management?
We charge between 5% and 10% + VAT, depending on the rent amount and the management complexity level.
- The management fee is higher for properties with individual gas-fueled heaters (as we need to manage the yearly inspections and the recurring issues when boilers have to be restarted for a new tenant)
- The management fee is higher if the apartment is rented with internet included (as we become the hotline for any internet/phone/TV related issue)
Do companies always pay their rent?
Yes, large companies always pay their rent. We have had not one unpaid rent in 4 years' time.
How much is the security deposit and what does it cover?
Furnished rental: the deposit is equal to 2 months' rent with charges included.
Unfurnished rental: the deposit is equal to 1 month's rent, excluding charges.
The security deposit covers potential damages to the property or its furnishings.
How does home insurance work?
Tenants subscribe to their own home insurance. We have developed a partnership with an insurance company to be able to offer a high-quality service for tenants when requested.
As a landlord, you also need to subscribe to your own home insurance (as a "non-occupant"). This insurance will protect you in the case of damages not covered by the tenant's insurance (ex: a leak in the common areas damaging a wall in the apartment).
Can I subscribe to an insurance policy for unpaid rent?
This kind of insurance does exist, but we do not offer it.
The reason is that it usually covers the basic mainstream cases of renting to a typical case of an individual or couple, salaried with a 2-year fiscal history in France and permanent work contracts with salaries higher than 3 times the monthly rent. This type of insurance would either not cover the niche market we address (too specific) or would be too expensive. If you still want to subscribe to insurance of this kind, please let us know in advance and contact your own insurance broker.
Getting ready for renting my property
What are the required diagnostics?
For furnished or unfurnished rentals, you will need to provide several diagnostics:
- DPE (Energy performance). This diagnostic is valid for 10 years.
- CREP (Lead). This diagnostic is valid for 6 years.
- ERNMT (Risks, such as floods). This diagnostic is valid for 6 months.
The asbestos assessment must also be available if the tenants asks for it.
For unfurnished rentals, a surface certificate is also required ("Surface habitable").
What equipment is required?
- By law, the apartment must be ready to live in. This means there must furniture (table, chairs), a bed, an equipped kitchen (at least a cooker and fridge) and kitchenware.
- To match the criteria of the expatriates market, the furniture must be in excellent condition.
- Very often, bed linens (2 sets per bed) must be provided.
For unfurnished rentals, there is no required equipment. An equipped kitchen is however a plus.
What are the key points of your lease contract?
We use the Tissot templates, which is market best practice.
These templates follow of course the law. The advantage is that all parties know that the clauses are standard and according to French law. This ensures a faster closing with companies (no need to go through a long validation process with their legal departments).
Please note that for confidentiality reasons, some high-end properties are "off-market." If you are looking for a property above 1M€, feel free to contact us to find out which properties may currently be available.
Can you help me buy a property?
No, we do not act as flat hunters.
However, we will be glad to put you in touch with flat hunters with whom we work regularly.