We all have a city close to our hearts. Whether we grew up there or studied there, we know it like the back of our hand and feel comfortable in it. It’s often our favorite destination when it comes to investing in real estate. But is it always a good choice in line with your investment objectives?
To succeed in a real estate investment, it’s better to listen to reason rather than your heart.
Why? Because a real estate investment shouldn’t be chosen like a primary residence. So, how do you determine the potential of a property in a city when you don’t know it well? Beyond the price, what are the criteria to analyze its value objectively in the context of an investment? PATRIMOLINK provides you with some key points to help you see more clearly and make your choice using effective criteria.
1. Economic dynamism
This criterion comes first because it’s important for several reasons. It helps attract potential tenants and increases the chances of ensuring good occupancy of your property.
The presence of a flourishing economic fabric, composed of businesses that feed an attractive job market, acts as a shield against vacancy. The possibility of finding stable and well-paying employment is fundamental in choosing a place to live. Therefore, regardless of the sector, a economically robust city harbors positive demographic dynamics and a concrete need for housing.
Investing in an economically dynamic city is also a good way to find clients with good purchasing power. Tenants with jobs and career prospects are less likely to default on their rent.
Economic dynamism also influences real estate appreciation. A good example can be seen around Cholet, in the Pays de la Loire region. By 2024, Thalès announced the creation of 400 to 500 highly qualified jobs in the region. As a result, the local real estate market experienced a sudden and significant growth. Properties (houses, apartments), as well as building land, are selling very quickly and at prices much higher than in previous years. House prices have increased by 8.2%, and apartments by 12.8%.
PATRIMOLINK closely monitors economic trends across the country, city by city, to identify the best opportunities. We regularly communicate on our LinkedIn page about these topics.
2. Higher education offer
Another criterion to consider is the offer of higher education. Why invest in a student city? The answer is simple: it attracts a significant number of potential young tenants.
Last year, the Senate’s information mission on student living conditions discussed the difficulties students face in finding accommodation. Philippe Campinchi, CEO of the Interprofessional Association of Student Residences and Services, mentioned a “shortage of 250,000 accommodations”. The demand is high, and investor-parents of students know this well – the supply is lacking. An investment, rented out in a student city, therefore has every chance of finding a tenant quickly.
Investing in student accommodation can be part of various investment strategies. From the small area of a studio to the large apartment rented out as a shared flat, or even a student residence, the possibilities are numerous. It all depends on the budget, but also on the desired profitability objectives. Shared flats often offer a more interesting return and rental diversification within a single property. Buying a larger property proportionally saves on square meter costs but, on the contrary, allows for higher rents. They now target a majority of young professionals, in addition to students.
Even if you don’t target a student audience for your investment, a city with universities and schools is often a younger city, offering attractive cultural and sports policies. They are generally dynamic and lively municipalities, pleasant to live in. They also attract other populations, such as young professionals or families. The cities of Tours, Caen, or Rennes are good examples.
We, therefore, remain attentive to campus openings, research centers, tech hubs, and other training establishments to help you assess this criterion.
3. Housing supply and urban planning quality
The third component to consider before investing is the quantitative and qualitative supply of housing available. It is essential to analyze the local real estate market to understand what residents are looking for and what they can find when trying to find accommodation. What is the precise demand of the inhabitants in this city or sector? Is the clientele made up of families of young professionals or students? Is the market saturated or, on the contrary, experiencing rental vacancies? The price criterion is also important. Is real estate highly valued, or is it still accessible?
Knowing your market well is essential for investing in a relevant property.
Another dimension of urban planning is its ability for a city to renew and transform itself. Indeed, some municipalities or neighborhoods may suffer from a dull or even negative image. This is often the legacy of industrial activity or poor public management. Many recent examples show that these reputations are not inevitable. Proactive public policies, new infrastructures, or societal changes can make a difference. Therefore, when planning an investment project, it’s important to stay up-to-date with city news to keep all options open.
Metropolitan areas are best equipped to carry out these large urban operations. Examples include the Confluence district in Lyon or the renovation of the Bassins à flots district in the Bacalan neighborhood of Bordeaux. We dedicated an article to this topic at the end of last year. Initially poorly received, this extensive urban restructuring plan has positively transformed Bordeaux’s urban landscape. In the early 2000s, the Bacalan district was sparsely populated, neglected by businesses and services. Since its renovation, it has become a must-visit area. Many headquarters have settled there, as well as the prestigious Cité du Vin. Its central location makes it a highly sought-after area for both tenants and businesses. Investors who were interested in it when this development was “overlooked” by many did not make a mistake!
But large metropolitan areas are not the only ones. We mentioned it in an article on medium-sized cities: small-sized but well-connected municipalities to major urban areas are now performing well in the real estate market. They have invested in their infrastructure to improve accessibility, attract companies in need of space, and residents looking for quality of life.
Therefore, it’s important not to dismiss a city based on its reputation or its situation at a given time. Communities evolve, especially when they are on the outskirts of a metropolis. PATRIMOLINK closely monitors major urban planning programs to identify future neighborhoods where it may be interesting to position itself.
4. Neighborhood
The fourth point of interest to analyze is the environment offered by the city or neighborhood. By environment, we mean the context of the property in the broadest sense. This notion covers many aspects:
- Public services: is it easy to find a doctor, a place in a nursery or school, a post office? How does the city rank in terms of safety? Dense and operational public services are an important element for the attractiveness of a city.
- Amenities: is the city equipped with the main basic shops, such as a bakery, a tobacconist, or a supermarket? The possibility of shopping near one’s place of residence is an important element for attracting tenants.
- Setting: is the city’s living environment pleasant? Has the municipality invested in green spaces, quality urban furniture, and leisure facilities? Can we note the presence of potential nuisances (smells, noises, visual or atmospheric pollution)? Since the successive lockdowns during the Covid pandemic, tenants are looking for a better quality of life and are therefore very attentive to these conditions.
All these elements make the city or neighborhood a pleasant and attractive place for potential tenants.
PATRIMOLINK has gathered fine expertise on the cities and neighborhoods where we offer projects to only propose the most suitable locations. We regularly communicate on our LinkedIn page about the developments in these areas.
5. Quality of public transportation and its evolution
The last point that influences a city’s appeal is its public transport offer. When we talk about mobility, we first talk about intramural mobility. A well-served city with public transport, dense networks, and frequent services has a definite advantage. Cities are aware of this, and tram or metro line projects abound in recent years.
We also talk about inter-city transport. New transport lines can also change the game for a municipality. Everyone has in mind the example of the LGV linking Paris to Bordeaux in 2 hours or the TGV Est. Put into service in June 2007, it helped to decongest several cities and regions. The city of Reims particularly benefited from it. Three billion euros of public and private investments were pooled to capitalize on the line’s arrival (road works, tram installation, professional premises construction). According to figures published by France Info five years after the line’s inauguration, local authorities’ goals had been exceeded: 150,000 square meters of commercial premises were leased, 110 new companies were established, and nearly 4,500 new jobs were created. The TGV therefore contributed to the city’s valorization.
We regularly communicate on our LinkedIn page about the creation of transport means in different urban centers.
Economic dynamism, higher education offer, urban planning, quality of life, and transport offer: all these elements help you assess the potential of a city in an objective and factual manner. Don’t forget that all these criteria are dynamic. To optimize the success of your real estate investments, it’s advisable to target cities that gather as many of these attractiveness elements as possible. For 8 years, PATRIMOLINK has developed an efficient multi-criteria expertise to analyze cities in a tangible and objective way. Depending on your investment strategy (destination, profitability objective, integration into your assets), we offer you updated and relevant advice. Feel free to contact us to learn more!
Content gathered for informational purposes only and does not substitute for current regulations. Without consultation with our experts, PATRIMOLINK cannot be held responsible for the possible consequences of implementing the advice and information provided in this article.
