Investing in LMNP in 2025 — Strategies and Tips Investing in LMNP in 2025 - Strategies and Tips

LMNP definition

LMNP, or Non-professional furnished renter, is a tax status advantageous for real estate owners who want to rent furnished properties. This status, open to all without the need for real estate experience, makes it possible to generate additional income through the rental of furnished apartments or houses.

To be eligible for the LMNP, certain conditions must be met:

Furnished character of the accommodation : The goods should be equipped with furniture that is essential for a comfortable daily life.

Income Threshold : Annual rental income must not exceed 23,000€, including rents and expenses, thus differentiating the LMNP Of the status LMP.

Activity statement : It is essential to declare the furnished rental activity to the tax authorities, which may require obtaining a number SIRET.

Rental conditions: The property must comply with all standards and regulations in force for short or long term rentals.

The LMNP thus offers an accessible and flexible opportunity to diversify sources of income through real estate investment.

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Why choose LMNP to invest in 2025?

The status LMNP has a number of advantages, especially on The fiscal plan, with attractive tax cuts. In addition, it offers stable earnings thanks to a variety of potential tenants, simplified management, and the possibility of diversifying your real estate portfolio. Finally, it can also generate a added value in the long term thanks to factors such as location and market trends.

Point of attention: While the status LMNP offers many advantages, it is also important to understand Professional Furnished Rentals (LMP), an option that is distinguished by specific criteria and advantages.

The status of Professional Furnished Rental Company (LMP) differs from LMNP in several points:

To be eligible for LMP status, The annual income from furnished rentals must exceed €23,000 and exceed the other income from the tax household's work. In addition, it is necessary to register for Trade and Companies Register. This transition of LMNP unto LMP may occur automatically when these thresholds are crossed.

The status LMP offers distinct advantages, especially in terms of taxation :

• LMP renters are exempt from Real Estate Wealth Tax on rented properties.
• In addition, in the event of an LMP deficit, it is possible to deduct it from the overall income, which can significantly reduce income tax.

Finally, the capital gain regime is more favorable in LMP, with an exemption possible under certain conditions, such as a minimum period of ownership of the property.

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What are the advantages of investing in LMNP?

LMNP non-professional furnished rental is a very interesting and profitable real estate investment solution, which has numerous tax benefits allowingoptimize the taxation of your rental income. Here are the main benefits of this investment:

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Attractive taxation

En LMNP, owners can opt between two tax regimes : the Micro-Bic And the diet BIC-real. The diet Micro-Bic Offer a 50% lump-sum reduction on rental income, thus simplifying tax reporting and reducing the tax base. The real regime, for its part, allows a precise deduction of the actual expenses related to the rental (such as management fees, maintenance fees, loan interest, etc.) and depreciation of real estate and its furniture. This option is particularly beneficial for owners with high expenses, as it can significantly reduce the tax on rental income.

Impact on social security contributions : the revenue generated by the LMNP are not subject to social security contributions, which is a significant advantage over other forms of business income. However, they are subject to social security contributions, but often to a lower rate than that applied to professional income.

Flexibility in rental management

Choosing the type of rental : in LMNP, you have the freedom to choose between different forms of rental, whether they are rentals of short term, of vacation rentals, or of long term rentals. This diversity allows owners to adapt to different market demands and to maximize the occupancy of their property.‍

Management directly or through a manager : the owners in LMNP can choose to manage their property themselves or to entrust this management to a professional. Direct management offers more comprehensive control and reduced costs, while management through a professional can provide expertise and significant time savings.

Setting the rent: Under the status LMNP, owners have a certain freedom to set the rents, while respecting the rent ceiling rules in force. These rules also apply to furnished rentals, but with one particularity: LMNP rents are generally set at a level around 15% higher than those for bare rentals. This additional margin reflects the supply of furniture and equipment, allowing prices to be adjusted according to the characteristics of the property, its location and market demand.

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Rental income security

Diversifying revenue sources : The LMNP allows the rental of various types of property (apartments, houses, service residences, etc.), thus offering a diversification of sources of income. This diversification can reduce the risk of dependence on a single type of property or rental market.

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What are the risks of investing in LMNP in 2025?

Although accessible and attractive, this real estate investment involves certain inherent risks that you should know before you start in order to take the right precautions. Here are the main ones:

Administrative and fiscal complexity : the diet LMNP can be administratively complex, especially when it comes to filing income and choosing the tax regime (Micro-Bic or Real Diet). The need to keep accurate accounts, especially under the real regime, can be a challenge for owners who are not familiar with the aspects Taxation and accountants of real estate management.

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Reporting requirements : the owners in LMNP must comply with certain reporting obligations, such asObtaining a SIRET number and the declaration of their rental income for taxes. These steps can be perceived as restrictive, especially for those who are new to furnished rentals. Subscribing to an accounting support service such as Qlower is recommended.

Rental risks : as with any rental investment, there is a risk of rental vacancy, that is to say periods during which the property is not rented. This can affect the profitability of the investment, especially if the property is located in an area with low rental demand.

Management and maintenance costs : the management of a furnished property involves maintenance and repair costs potentially higher than for a naked rental. In addition, the renewal and maintenance of furniture can represent an additional cost for the owner.

How do I get started in LMNP?

Becoming a Non-Professional Furnished Rental Company (LMNP) requires the following of several important steps, taking into account various legal, fiscal and administrative aspects. The first thing to check is that you meet the conditions to qualify for the advantageous tax status of Non-professional furnished renter.

Reminder of the criteria to be respected:

• Be an individual who rents the unit directly under their own name.
• Do not carry out this activity in a professional capacity.
• Do not exceed a ceiling of 23,000 euros of annual net taxable income thanks to the rents received.
• Ensure that rental income does not exceed other income from work.

This status of LMNP is accessible to any individual regardless of your status: employee, liberal profession, liberal profession, retiree, student... The main thing is to stay below the ceilings of owned housing and rental income to take advantage of tax advantages.

Here are all The steps to prepare yourself well in advance and increase your chances of success:

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The creation of the status

Buying or owning a furnished property : the first step is to own or acquire a property that you want to rent. This property must be furnished, that is, equipped with all the elements necessary for immediate occupancy.

Activity statement : it is necessary to declare your activity of furnished rental. To do this, you will need to get a number SIRET, by registering with the Business Formalities Center (CFE) of The chamber of commerce and industry Or of The Chamber of Trades and Crafts.

Bookkeeping : according to the tax regime chosen, you will have to hold a Adapted accounting. For the Real regime, this involves more detailed accounting management, including Depreciation of goods and furniture.

Declaration of rental income : In furnished rentals, the tax return must be transmitted remotely in advance of the reporting period for individuals (Before the end of April).

Compliance with local regulations : be sure to comply with all local regulations concerning furnished rentals, especially with regard to safety, housing standards and declarations to the town hall if necessary.

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The choice of tax system

As LMNP, you have the choice between two tax regimes :

• The Micro-Bic diet, which offers a 50% lump-sum reduction on rental income and simplifies tax reporting.‍
• The real regime, which allows The deduction of actual expenses, including Depreciation of goods and furniture. This regime is more complex from an accounting point of view but almost always more advantageous for owners with significant expenses.

By following these steps, you will be able to effectively establish and manage your business of LMNP. It is important to stay up to date with the latest regulations and practices in the field of furnished rentals to ensure optimal management in accordance with the law.

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What are the different types of property to invest in?

Investment in LMNP offers several real estate options, each with its own characteristics:

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LMNP New

Investment in new homes (studios or 2 rooms off-plan) with advantages such as the absence of major works and reduced costs. Partial recovery of the initial VAT paid is possible, although high prices may impact profitability (2.5 to 4%).

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LMNP Old

Purchase of old homes on the traditional market, offering more accessible prices and better potential profitability (4 to 7%), but with the risk of future work.

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LMNP Tourism

Investment in tourist residences with services, managed by operators. Specific tax benefits, delegated management, and returns of 4% unto 6%, but with a dependency on the manager.

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LMNP Residential

Acquisition of furnished apartments or houses for a classic year-round rental. This type of investment targets small homes and offers a gross return of 3% unto 6% with moderate risk.

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LMNP Commercial Lease

Combining the advantages of a rental investment with those of operating a service residence. High return potential (6 to 10%), but with specific taxation and constraints. Specialist advice recommended.

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How to choose your LMNP property for a successful investment?

Choosing the right property in Non-Professional Furnished Rental (LMNP) is decisive for
guarantee a successful investment. The idea is to find the right balance between tax optimization on the one hand and measured risk on the other to ensure good final profitability.

Geographic area : Choose a location in a area with high rental demand, such as big cities, tourist areas, or university towns.

Proximity to amenities : Make sure that The property is close to essential amenities such as transport, shops, schools.

Rental request : Evaluate rental demand in the region for ensure the viability of the investment.

Market prices : Compare the prices of similar properties in the area for guarantee an investment at market price.

Market Adequacy : Choose a type of Property that corresponds to the demand of the local market. For example, small areas are often sought after in student areas.

Yield calculation : Estimate the potential return of the property taking into account rental income and expenses.

Added Value Potential : Consider the potential of added value at the resale of the property.

New or Old : Weigh the pros and cons between investing in the new and the old (often cheaper but may require renovations).

Property inspection : Conduct a thorough inspection of the property to identify any necessary work and the energy performance of the home..

In short, take the time to study all these aspects before signing your acquisition to make the right decision!

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How to choose your accounting and tax management company?

Once the property is purchased, it is also important to choose which partners and services will allow you to outsource certain administrative tasks and manage your LMNP investment with confidence. Let's look at the possible choices:

Services to be outsourced

Several missions can thus be entrusted to companies specialized in the management of LMNP:

• ‍Rental management : drafting of leases, inventory, payment of rents and charges, technical monitoring of the property.
• ‍Administrative management : tax declarations, condominium fees, General Assemblies, insurance.
• ‍Accountancy : maintenance of accounts and monitoring tables.‍
• Tax Management : possible optimizations, declarations of results, monitoring of possible deficits.‍
• Heritage advice : arbitration, resale and transmission...

Some companies offer comprehensive services including all this while others specialize in certain areas. You are free to compare different stakeholders according to your needs.

How do you select your management company?

Here are some important criteria for choosing the right future management partner LMNP :

The services offered
Validate that the company offers all the services you need: rental management alone? Or package including the administrative and accounting part? Attention also to any additional services invoiced in addition (bailiff fees...).

Experience with this type of investment

How many properties do they manage in LMNP currently? For how many years? A good experience is a guarantee of professionalism. You can also inquire with current customers.

Management costs

Compare multiple quotes. Are they transparent about billing: percentage of rent? Yearly package? Service fees? This will be deductible from your rental income and therefore to be included in your forecast..

Technology and Tools

Evaluate the technological tools used by the company for accounting management. Having access to an online customer portal to keep track of your finances can be an advantage.

Location

A company located near your property will allow more responsiveness to manage possible technical problems or unpaid rent.

Quality of service

Read online reviews to assess reputation and customer relationships: dedicated contact person? Easy to reach them? Availability? It is essential for you to feel confident. Do not hesitate to test for yourself by calling them to judge the professionalism.

Initial consultation

A lot of companies offer a free initial consultation. Take the opportunity to assess their expertise and the quality of their customer service.

We are coming to the end of this guide on investing in Non-professional furnished rental. You now have all the keys to get started with peace of mind!

From the definition of the criteria to be met in order to benefit from the LMNP tax status In addition to practical advice for choosing your management company, we have reviewed the essential information you need to succeed in this business.

Now you also know what are the main advantages to be expected in terms of profitability And offiscal optimization thanks to this real estate investment popular with individuals. But also the inherent risks to be anticipated with a few precautions.

Now all you have to do is get started! We are at your side to support you on this project and answer all your additional questions. Contact Qlower whenever you want!

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