Fifteen years ago, when we first talked about turning our little studio into a rental instead of selling it, we did not know there was a name for what we were about to do. It turns out “buy and hold” is one of several distinct approaches people use to build income from property, and looking back, we picked ours almost by accident rather than by comparing the alternatives. We wish someone had laid them out for us the way we are about to lay them out for you.
There is no single best real estate investment strategy, only one that fits your capital, your appetite for hands-on work, and how quickly you want to see a return. Buy and hold, house hacking, REITs (or their French cousin, SCPIs), and short-term rentals each solve a different problem, and most people who do well in property end up specialising in one rather than juggling all four.
- Buy and hold rewards patience: steady rent, long-term appreciation, and tax deductions on mortgage interest and depreciation.
- House hacking (living in one unit of a multi-unit property, renting the rest) lowers your own housing cost while you build equity.
- REITs and SCPIs let you invest in property without ever managing a tenant, in exchange for less control and no direct tax perks of ownership.
- Short-term rentals can out-earn long-term leases per month, but they come with tighter local rules and far more day-to-day work.
Buy and hold: the strategy we know best
This is what we ended up doing with our studio, and the logic is straightforward: buy a property in a market with real rental demand, hold it for years, and let rent plus gradual price appreciation do the work. It rewards patience over quick wins.
Picking the right location matters more than almost anything else in this strategy. We looked at population trends, job growth and how many similar studios were already sitting empty nearby before we committed, and we would tell anyone starting out to do the same rather than trust a gut feeling about a neighbourhood.
Managing the property afterwards is its own decision: some owners hire a property manager, others, like us, handle it directly because we enjoy the contact with tenants. Either way, mortgage interest, insurance and depreciation typically remain deductible against rental income in France, which is worth discussing with an accountant familiar with your specific situation.
House hacking: living in your investment
House hacking means buying a property with more than one living space, a duplex or a house with a separate studio, and renting out what you are not using yourself. The rent from the other unit helps cover the mortgage, which can make this an accessible entry point for someone without a large deposit saved up.
It does mean sharing a building with your tenants and taking on landlord responsibilities from day one: vetting people carefully, drafting proper lease agreements, and being available when something breaks. Lenders often factor in the expected rental income when assessing a house-hacking purchase, which can improve what you are able to borrow in the first place.
REITs and SCPIs: exposure without the keys
If managing a property yourself has no appeal, REITs (real estate investment trusts) and their French near-equivalent, SCPIs (sociétés civiles de placement immobilier), offer a way to hold property indirectly. You buy shares or parts, and the underlying company or fund owns and manages a portfolio of income-producing buildings on your behalf.
SCPIs delivered an average distribution rate of around 4.9% in 2025, according to sector figures reported by several French financial advisory sites, with entry tickets starting from a few hundred euros a share. That accessibility is genuinely attractive, but entry fees average close to 10%, which usually means holding the investment for several years before it pays off.
The trade-off compared to direct ownership is control: you cannot choose the tenant, the building, or the renovation schedule, and dividends are never guaranteed. What you gain is diversification across many properties and tenants at once, plus the ability to sell shares far faster than you could sell a physical building.
Short-term rentals: higher income, higher workload
Renting a property nightly or weekly through platforms like Airbnb can produce meaningfully higher income than a traditional lease, especially in a tourist destination like ours. It also demands the most hands-on management of the four strategies: furnishing to a higher standard, professional photos, constant guest communication, and cleaning between every stay.
The regulatory side has tightened noticeably. Furnished tourist rentals generally require a registration number from the local town hall, mandatory in high-demand zones, and the tax treatment changed again for 2025: the allowance on income from unclassified furnished tourist rentals dropped from 50% to 30%, capped at €15,000 in revenue, a real cut compared to previous years. Rules vary by commune and change often enough that checking with your local mairie before committing is not optional.
Comparing the four at a glance
| Strategy | Hands-on level | Best suited to |
|---|---|---|
| Buy and hold | Moderate | Patient investors seeking steady rent |
| House hacking | High | First-time buyers with limited capital |
| REITs / SCPIs | Very low | Hands-off investors wanting diversification |
| Short-term rentals | Very high | Owners in strong tourist areas, willing to manage actively |
Source: SCPI distribution rate, French real estate advisory sector reporting (2025); furnished tourist rental tax allowance change, French finance law reporting (2025).
A note on what changed since Pinel ended
Anyone who researched rental investment a few years ago probably remembers the Pinel scheme, the tax reduction for buying new-build rental property. It ended for good on 31 December 2024, and as of our last check, no direct replacement scheme has taken its place, though mechanisms like Loc’Avantages and the LMNP (non-professional furnished rental) status remain available. That shift alone has pushed some investors from new-build buy-and-hold toward furnished rentals or SCPIs instead.
We are two retirees sharing what worked for us, not financial advisors, and every one of these strategies interacts differently with your personal tax situation, so a conversation with an accountant or notaire before committing real money is worth far more than anything in this article. If you are still weighing whether real estate investing suits you at all, we go through that question directly in our piece on the pros and cons of investing in real estate, and the legal side of whichever strategy you lean toward is covered in our overview of the regulations around real estate investing.
Published 4 August 2023. Last updated 29 July 2026.
Sources: SCPI distribution rate reporting via French real estate advisory sites (2025); furnished tourist rental tax allowance reform (2025); Pinel scheme end date, Cour des comptes and Notaires de France reporting (2024-2025).