Investing in real estate in 2025: where to invest your money so that it really works?

Investing in real estate in 2025 can mean buying a rental property, putting your money into REITs, or opting for paper money. Faced with a context of slowly falling rates (around 3%) and stable or slightly falling real estate prices, opportunities exist. This comprehensive guide helps you choose your strategy, target the most profitable cities, calculate your performance and avoid pitfalls.

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🏗️ The different strategies for investing

Before you start, it is essential to identify the strategy that best fits your profile, your financial goals and your appetite for active management.

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📌 Physical rental investment

Investing in an apartment or a house for long-term rent is a concrete and accessible approach as soon as you get a loan. Today, credit rates are particularly attractive: in June 2025, Pretto announced 2.84% over 15 years, 2.90% over 20 years and 2.95% over 25 years for the best cases (Source: Pretto). These rates often allow for positive or very limited cash flow, provided the project is optimized.

In tense areas, gross profitability varies between 4% and 6%, while in medium-sized cities with moderate prices, it can exceed 7—8%. The choice between bare, furnished or shared accommodation has a direct impact on rents, taxation and tenant turnover. In the middle of negotiating a loan, a borrower can also obtain discounts on rates, especially if they are part of a first-time buyer or CSP+ profile.

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🧱 Stone-paper: SCPI and crowdfunding

If you prefer an investment without rental management, SCPIs (Société Civile de Placement Immobilier) represent an interesting solution. In 2024, they posted an average gross return of 4.72% (Source: Investor Avenue), offering a good compromise between performance and effort.

For those who want a higher return, real estate crowdfunding offers greater prospects: platforms like Homunity delivered 8 to 12% gross in 2024, with an entry ticket available from €1,000 and an investment period of 12 to 36 months (Source: Homunity). This formula provides an attractive return but requires the careful choice of projects, because the amounts invested remain locked in place throughout the duration of the loan.

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🏡 Primary or secondary residence

Buying to live there or for mixed use allows you to launch a real estate project while limiting risks. Your main home becomes a heritage asset, and you can generate additional income with a summer vacation rental. It is a prudent path that combines security (no rental vacancy when you live there) and potential to generate a financial surplus, while living in a property that you own.

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📈 The 2025 context: favorable conditions

Understanding the real estate market environment in 2025 is essential to secure your investment and anticipate its future performance.

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Attractive interest rates

In June 2025, real estate credit rates hit a new low, around 2.84% over 15 years, 2.90% over 20 years and 2.95% over 25 years for the best profiles, according to Pretto (Source: Pretto), which is a clear relief compared to the increase in 2024. This decrease is confirmed by Réassurez‑Moi, which observes 2.95% over 15 years, 3.04% over 20 and 3.15% over 25 years (Source: Reassure me). A lower financing cost reduces monthly payments and improves cash flow, making rental projects more profitable and accessible.

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Rental Market Trends

Large cities such as Marseille, Montpellier and Toulouse show gross returns of between 5% and 6%, while medium-sized cities such as Mulhouse or Saint-Étienne exceed 7%. In fact, Marseille recorded a gross return of 5.36%, and Montpellier reached 6.10%. The top 10 most profitable cities also include Saint‑Étienne (10.12%), Le Mans (9.26%) or Angers (7.44%), which shows the value of targeting less traditional, but efficient, segments.

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Energy regulation and renovation

Since January 1, 2025, the law prohibits the rental of housing classified F and G, and the constraint will extend to housing classified E from 2034 (Source: Le Monde). These new standards require investors to budget for thermal renovation work, which can cost several thousand euros per home. Integrating these costs into the projected profitability is essential to avoid an unpleasant resale surprise or an extended rental vacation.

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🏙️ Choosing the right city: criteria and returns

To optimize your project, the choice of the target city is as crucial as the selection of the property itself. This choice conditions rental demand, vacancy and, ultimately, the profitability generated.

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Rental tension vs. yield

Medium-sized cities often offer a better ratio between purchase price and rent. For example, Mulhouse posted an exceptional gross return of 12.2% in May 2025, with prices around €1,267/m² and average rents of €12.9/m². For its part, Saint‑Étienne is progressing with a yield of 9 to 10%: an average price close to €1,300/m² for a rent of around €11/m², generating a gross return of 9.15%.
Cities like Limoges, mans or Niort also offer returns in excess of 7%. These performances can be explained by affordable prices, stable demand (students, young workers, medical staff, etc.) and a low vacancy rate.

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How to calculate profitability?

Basic formula

Calculating the gross return remains an essential reflex: annual rent ÷ (purchase price + expenses) × 100.
It is a first quick estimate to know if a project deserves to be studied in depth (Source: Vinci Immobilier).

Net adjustments

To refine the analysis, it is essential to remove non-recoverable expenses, property tax, management fees, PNO insurance and a provision for work from the annual rent. This net profitability is much more representative of the real gain generated by the property.

Cashflow and IRR

The Cashflow is the net monthly balance between rental income and expenses. The SORTING (internal rate of return) makes it possible to assess the overall performance of an investment, by integrating all financial flows (rentals, loans, resales). A simulator such as Finary calculates the IRR to guide the investor.

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⚠️ Pitfalls to avoid

Even in a favorable market, certain pitfalls can cause a real estate project to fail, especially without good preparation.

Making the story too good: watch out for excessive returns

It is tempting to believe the promises of exceptional returns, sometimes announced at more than 10% gross. However, these figures are often calculated excluding expenses, without taking into account trustee fees, insurance and rental management fees, or the rental vacancy. According to Investor Secrets, unexpected management fees and the uncertain evolution of tax systems can considerably reduce or even cancel out these alleged profits.

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Hidden costs: plan ahead so as not to be surprised

A real estate project incurs costs that are often forgotten. Before buying, you must include the costs of mandatory diagnostics, compliance costs (electrical, gas, DPE), potential thermal renovation work, or unexpected events such as a faulty water heater. A study ofInvestment‑locatif.com Remember that a monthly or annual maintenance budget often represents 1 to 3% of the price of the property, to be provisioned from the start.

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Taxation in change: from Pinel to LMNP, pay attention to the rules

Since the abolition of the Pinel system at the end of 2024, it is imperative to choose an appropriate tax regime. While Pinel made it possible to reduce taxes by 9 to 14%, its absence pushes investors towards solutions such as the Denormandie law, the land deficit or the status LMNP (Non-Professional Furnished Renter). The latter offers significant advantages, such as the recovery of VAT and the depreciation of the property, thus improving net profitability. An ADIL simulator makes it possible to assess the most relevant tax scenarios.

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Management and responsibilities: delegate or start?

The management of a shared or seasonal rental property requires a lot of time to manage entries and exits, cleaning and maintenance. Without delegation, an investment can quickly become time-consuming. According to Investor Secrets, the management fees for these solutions may be higher than expected, significantly reducing the announced profitability. Entrusting management to an agency allows you to gain peace of mind but impacts the net return.

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✅ Conclusion

Investing in real estate in 2025 remains an excellent option, especially thanks to accessible rates and attractive returns in secondary cities. success depends on your strategy, the careful selection of the market, and your ability to anticipate costs and taxation. It is better to surround yourself with professionals (notary, real estate hunter, tax consultant) to secure and optimize your project. Undertaking this approach methodically and realistically guarantees a sustainable, profitable and structuring investment for your future. Buying with complete peace of mind with a real estate hunter, discover our service here.

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