Buying real estate: why invest in energy grids

For Lior Pardo and Rafael Pardo, co-founders of Investing in the Old, the gradual application of the law on climate and sustainability is a godsend for those who want to invest in real estate.

France has 4.8 million energy sieves in its construction fund, including 2 million leased ones. These abandoned and poorly maintained houses consume a lot of energy for heating and are the main greenhouse gas emissions. Faced with an environmental emergency, the 2021 Climate and Sustainability Act aims to achieve carbon neutrality by 2050. One aspect of this law concerns housing by accelerating their thermal reconstruction. By 2028, it is planned to gradually ban the lease of thermal colanders.

Thus, from January 2023, housing with energy consumption over 450 kWh / m2 will be prohibited from renting. About 90,000 homes were affected by the incident. Similarly, rents for F and G ratings can no longer be increased if work is not carried out. As a result, real estate professionals are seeing an increase in the list of houses with ratings E, F and G in their DPE.

Investors are looking for thermal filters

Landlords, sensitive to the limitations of the law and its timetable, prefer some to sell their property rather than overhaul it. Thus, according to a study by Unpi, less than a third of owners plan to begin repairs. Prices are falling everywhere, except for big cities, Paris is in the lead, and are attracting the attention of investors looking for a bargain.

In the period from 2020 to 2021, sales of energy-intensive homes increased by 7.7%, with the largest share of thermal screens showed the rural departments of the Hautes-Alpes, Loser, Cantal and Creuse. According to a study by Meilleurs Agents et Se Loger, the cost of housing classified F and G is now 18% lower than real estate rated A or B.

Falling prices should continue and even increase as the various terms of the Climate and Sustainability Act approach. If the investment seems attractive, several criteria should be considered, such as the general condition of the building, its geographical location and the condition of the rental market. Analysis is important to ensure the profitability of the project, especially since it will be necessary to carry out heavy repairs to ECD property to reflect at least a rating of D.

Significant assistance for repair work

Repair work on thermal sieves costs tens of thousands of euros. These renovations, aimed at making housing decent, focus on three points: external and internal insulation, ventilation and energy consumption for heating.

To encourage and support landlords and landlords, the state offers a variety of incentive schemes. Success MyPrimeRenov‘allowed to partially finance the reconstruction of 800,000 projects in 2021. Renewed in 2022, the system, piloted by Anna, has funding of 2 billion euros. It is open to all households and allows them to receive a subsidy depending on the nature of the work. Another trendy device, zero-rate eco-credit or eco PTZ allows you to get an interest-free loan of up to 50,000 euros and without checking the condition. In addition to these two flagship schemes, there is also local assistance to partially fund the repairs.

Finally, landlords can benefit from a reduction in income tax through dDenormand device. To benefit from this, work must be done that accounts for at least 25% of the value of the property, which must also be located in one of the 222 cities of the “Heart of the City” program. The landlord undertakes to rent vacant housing as the main housing for a period of 6 to 12 years to the tenant in compliance with the conditions of resources.

In the case of furniture leases, LMNP status encourages landlords to carry out repairs, allowing them to deduct these costs from their rental income under the actual regime. Tax authorities go so far as to allow a deficit of land that can be postponed for several years to reduce income tax.

Thus, despite the new energy standards for real estate, thermal screens have every argument to entice investors, even the least experienced, to invest in stone. Many of the benefits will be maintained, even expanded, during the new five-year term of Emmanuel Macron.

Thus, due to the reconstruction of housing, the carbon footprint of the real estate market is limited.