Airbnb in Paris an opportunity or a danger

Should you invest in Parisian accommodation to rent it for vacation? Is it more profitable than a year-round rental? Paris is one of the flagship destinations for customers of the Airbnb site, the answer is rather yes, especially at the prices charged on this platform. But the risk is to see the capital slowly transform into a museum city, emptied of its inhabitants.

Airbnb, the new El Dorado for rental investors?

In a previous article, we talked about the good and bad sides of seasonal investing. Let us recall some figures here: in 2023, hotels in Paris and the Paris metropolitan area recorded 22.4 million arrivals. Not only does this number of visitors not take into account private apartment rentals, but moreover, among these 22 million customers who slept in hotels, how many would be ready, during their next excursion to Paris, to try the Airbnb experience for accommodation? And why wouldn’t you be one of those who welcome them for a seasonal rental?

Paris, the first Airbnb city in the world

Born only 6 years ago, the American start-up Airbnb is breaking records: it is now worth more than 20 billion dollars, has 17 million users worldwide, and extends into 34,000 cities scattered across the world. 190 countries (7 less than the number of countries officially recognized by the UN!). We no longer ask: “Which hotel are you staying in?” “, but: “Have you booked an Airbnb? “.

In 2023, a study (reported here ) revealed that in Spain, the number of beds rented via Airbnb had exceeded its hotel equivalent. What about in France, and particularly in Paris? The figures differ. At the start of 2023, experts spoke of 40,000 housing units; but a Deutsche Bank survey published in 2023 (and cited in this article ) estimates this number at more than 88,000 apartments. In any case, Paris is the first Airbnb city in the world, far ahead of San Francisco, where the platform was born.

Very attractive profitability

If we are to believe a Senate estimate, an owner who rents his home on Airbnb could earn an average of €3,600 per year. However, the experts on the issue, if they do not all agree among themselves, have at least one thing in common: they emphasize how far the senatorial estimate is from the mark. And they explain to us that the earnings from a well-managed seasonal rental, for a property located in a tourist area, can greatly exceed the income from a classic long-term rental.

A study carried out by JDN and reveals that twelve days of rental via Airbnb would be enough to generate income equivalent to one month’s rent for traditional rentals. In short, Airbnb rentals would bring in 2.6 times more than their traditional equivalent (3.5 times more in certain very touristy areas according to the Huffington Post ).

As for rental rules, an individual has the right to rent his main residence for up to 4 months per year, or 10 days per month on average. After 4 months, he must change its use and declare his property as “furnished for tourism” with the town hall, if and only if his co-ownership authorizes him to do so.

Large disparities depending on the neighborhoods

Of course, the profitability of a property on Airbnb depends greatly on its geographical positioning. Outside of areas with very high tourist potential, in high demand by visitors, profitability drops to a gain of 2 times the traditional amount of rent, which pushes us to put into perspective the economic interest of seasonal rental given the constraints ( availability, major holiday periods, etc.).

Here is a list of the Parisian districts in which renting your property is most profitable:

  • Notre-Dame (4th arrondissement ): €1,216 per square m2 per year, compared to €352 for traditional rental; profitability is 3.5 times higher.
  • Saint-Germain l’Auxerrois (1st arrondissement ): €1,117 versus €342; profitability 3.3.
  • Élysées/Madeleine (8th arrondissement ): €1,104 versus €347; profitability 3.2.
  • Palais Royal (1st arrondissement ): €1,117 versus €353; profitability 3.2.
  • Vivienne/Gaillon (2nd arrondissement ): €1,117 versus €347; profitability 3.2.
  • Currency (6th arrondissement ): €1,092 versus €357; profitability 3.1.
  • Odéon (6th arrondissement ): €1,117 versus €357; profitability 3.1.
  • Saint-Placide (6th arrondissement ): €993 versus €322; profitability 3.1.
  • Triangle d’Or (8th arrondissement ): €1,104 versus €355; profitability 3.1.
  • Place Vendôme (1st arrondissement ): €1,098 versus €368; profitability 3.

In short: should we give in to the sirens of Airbnb rentals?

Renting your main residence on Airbnb to make ends meet is one thing (as long as you have another place to sleep). Investing in an apartment solely for seasonal rental is another. The levels of profitability, as we have seen, can be high in certain neighborhoods, but at the purchase price in these areas (see the average prices per square meter per district here), to achieve an interesting gain, the accommodation is rented 85% of the time, the maximum occupancy rate expected on a platform of this type.

However, to achieve this occupancy rate, it is not only necessary to declare yourself as a “furnished tourist accommodation”, and pay ad hoc taxes (and invest at the same time in another property to compensate for the loss of living space), but also be able to manage its rental all year round. Which involves time, energy, and money, in large quantities. And there is no question of playing the outlaw to rent beyond 4 months without saying a word: the city of Paris has launched a severe fight against offenders, and Airbnb has signed an agreement with the municipality (read on this page ) to help him.

However, if the adventure tempts you, we recommend that you do your calculations carefully and use a real estate loan simulator to be able to determine what rate of return you will need to achieve in order not to lose money when repaying your loan. credit with seasonal rental.

Could Airbnb transform Paris into a museum city?

A profitability 3.5 times higher than the average for a long-term rental, tends to make owners dream. Even if it means falling into illegality. This situation did not fail to attract the attention of the Paris town hall, which estimates at around 20,000 or 30,000 the number of apartments which would be rented in the capital for short periods, but illegally.

For Ian Brossat, deputy mayor of Paris in charge of housing, there is the risk of a significant contradiction: deploying considerable efforts to build 10,000 new homes each year, in a highly densified city where space is a luxury, but at the same time losing astronomical quantities of residential space due to offenders who rent illegally on Airbnb (and other platforms of the same type). This article reports an INSEE study that tends to prove him right: three districts very popular with tourists (the 1st, the 4th, and the 6th ) have recently lost inhabitants.

The risk is to ultimately transform the city center of Paris into a living museum: a city dedicated solely to tourists, like what the centers of Venice and, more recently, Barcelona have become. With, at the end of the day, an area where long-term tenants would almost no longer exist.

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