Before we ever signed anything, we spent a good six months arguing with ourselves, quietly, over coffee, about whether renting out our studio instead of selling it was even a good idea. Michel made a list of everything that could go wrong. Cathy made a list of everything that could go right. Fifteen years later, both lists turned out to be roughly accurate, which is probably the most honest thing we can tell anyone weighing the same decision today.
Real estate can produce steady income, tax advantages and long-term appreciation, but it also demands real capital up front, real time on an ongoing basis, and it is far less liquid than most other investments. Neither side of that equation should be dismissed, and the right answer depends entirely on your own finances and how much hands-on involvement you actually want.
- In favour: rental income, potential tax deductions, historical long-term appreciation, and the ability to use borrowed money (leverage) to increase your buying power.
- Against: high entry costs, ongoing expenses that do not pause when a tenant leaves, a genuine time commitment, and money that is hard to access quickly if you need it.
The case in favour: what actually worked for us
Rental income was the first thing we noticed, a genuinely steady stream once we had reliable tenants in place, and on the French Riviera specifically, prime areas like Nice and Antibes have been showing rental yields in the range of 4 to 6% according to recent market analysis, which is a respectable return by most standards.
The tax side surprised us too. Mortgage interest, property management fees and depreciation are generally deductible against rental income in France, and holding a property long enough changes the picture further: capital gains on a sale are currently subject to 19% income tax plus 17.2% social contributions (a combined 36.2%), but this tapers with the length of ownership, reaching full income tax exemption after 22 years and full exemption including social contributions after 30 years, under the rules in place as of 2025. A reform under discussion could shorten that timeline in the coming years, so this is worth checking again before any sale.
Leverage is the part people underestimate. Borrowing most of the purchase price through a mortgage means your own capital works harder, and as the loan gets paid down, equity builds even without a single euro of price appreciation.
The case against: what nobody tells you upfront
The entry cost is the first wall most people hit. Beyond the deposit itself, notaire fees run roughly 7 to 8% on an older property, and that is before any renovation the place might need. None of that is optional or negotiable.
Ongoing expenses do not take a break either: taxe foncière, co-ownership charges, insurance and maintenance all continue whether or not the property is occupied. If rental income falls short some month, the difference comes out of your own pocket, not the property’s.
Then there is the time. We manage our studio ourselves because we enjoy it, but finding tenants, handling maintenance calls and dealing with the occasional dispute is real work, not passive income in the way it sometimes gets marketed. Hiring a property manager solves that, at a cost that eats into your return.
Liquidity is the last piece, and the one that matters most in an emergency. Selling a property can take months, sometimes longer in a slow market, so money tied up in bricks and mortar is not money you can access on short notice the way you could with savings or shares.
Market risk sits underneath all of it. Property values do not move in a straight line, and while the Riviera has generally trended upward, interest rate changes and shifts in local demand can soften both prices and rents for a stretch. Anyone who tells you real estate only goes up has simply not been watching the market long enough to remember a quieter stretch.
Weighing it side by side
| Factor | In favour | Against |
|---|---|---|
| Income | Steady rent, 4-6% yields in prime Riviera areas | Vacancies and late payments happen |
| Costs | Deductible mortgage interest and depreciation | High entry costs, ongoing charges regardless of occupancy |
| Time | Can be delegated to a manager | Genuinely demanding if self-managed |
| Access to funds | Equity builds through leverage over time | Selling takes months, sometimes longer |
Source: rental yields in Nice and Antibes, Investropa French Riviera market analysis (2025); capital gains tax rates and holding-period exemptions, French property tax reporting via Notaires de France and LégiFiscal (2025).
So, is it right for you?
We cannot answer that for anyone else, and we would be suspicious of any article that claims it can. What we can say is that the decision came down, for us, to whether we could absorb a bad year without panicking, and whether we actually wanted the day-to-day involvement rather than just the idea of it. Both turned out to matter more than the numbers on our spreadsheet.
A few honest questions worth sitting with: can your budget handle a vacant month or an unexpected repair without strain? Do you want to be involved hands-on, or would a property manager’s fee be worth the peace of mind? And how soon might you need to access this money for something else?
We are two retirees describing what we learned from our own studio, not financial advisors, and every situation carries its own tax and legal details that deserve a real conversation with a notaire or accountant. If the pros outweigh the cons for you, the next natural question is which vehicle to actually use, which our overview of the different ways to invest in real estate walks through, and financing the purchase itself is covered in our piece on financing a real estate investment.
Published 5 July 2023. Last updated 29 July 2026.
Sources: rental yield data, Investropa French Riviera Real Estate Market Analysis (2025); capital gains tax rules, Notaires de France and LégiFiscal.fr (2025).