Buy-to-let investment
Investing in rental property before your main residence: the right order in Lyon
Rental first, main residence later? You stay a first-time buyer, but this first purchase affects your debt-to-income ratio, down payment and zero-interest loan.
Buying a rental property before your main residence is possible and does not cause you to lose your status as a first-time buyer, which only concerns the home you live in. However, the first loan impacts the second: its instalment is counted as a liability, whereas the rental income is often only partially taken into account, the down payment is used up, and the rental income may cause you to exceed the income thresholds for the zero-interest loan.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- Buying a rental property while remaining a tenant in your home does not cause you to lose your status as a first-time buyer, which only concerns your main residence.
- The rental income from a bare rental property is included in your reference tax income and may cause you to exceed the income thresholds for the zero-interest loan.
- On the day of the second purchase, the instalment of the first rental loan is counted as a liability, whereas the rental income received is most often only partially taken into account by the bank.
- The banks' derogation margin favours the purchase of a main residence: a rental project must fit within the standard criteria without relying on flexibility.
- A first rental loan uses up the down payment and delays the rebuilding of the savings necessary for the future purchase of the main residence.
Yes, it is possible: buying to let while remaining a tenant does not cause you to lose your status as a first-time buyer. However, this first loan weighs on your debt-to-income ratio, consumes your down payment, and will come before the bank the day you buy for yourself: simulate the two purchases before the first. The framework: the investment property file; prices and yields: rental property in Lyon.
Do you remain a first-time buyer after a rental purchase?
Yes, as long as you have not been the owner of your main residence: the zero-interest loan targets the occupied dwelling, not the assets held.
Le texte vise la propriété de la résidence principale. Un bien acheté pour être loué, que l'on n'a jamais habité, n'entre pas dans cette condition.
- En vigueur depuis le
- Source
- Article D. 31-10-4 du code de la construction et de l’habitation — Légifrance
emprunteur (ou co-emprunteurs) en accession à la première propriété au sens de l’article L. 31-10-3 du code de la construction et de l’habitation
Le renvoi est fait au texte du prêt à taux zéro : c'est la première propriété de la résidence principale qui compte.
- En vigueur depuis le
- Source
- Légifrance
- Do not live in the property: it would become your main residence.
- The rents from an unfurnished dwelling are included in the resources for the zero-interest loan and may cause you to exceed the threshold. See the PTZ in Lyon.
On the day of the second loan, the first one weighs
The rental instalment is a liability; the rent is often only taken into account in part.
Toutes les charges d'emprunt du foyer sont prises en compte, assurance comprise, y compris celles du prêt locatif déjà en cours.
- En vigueur depuis le
- Source
- Décision D-HCSF-2021-7, art. 1er — Légifrance
- A 'self-financed' rental property still weighs.
- Your current rent disappears from the calculation: 'rental first' is considered to provide comfortable income, not merely adequate income.
- A recent rental loan weighs on the entire life of the second loan.
The method: rental income and debt-to-income ratio.
The rental property must stand without derogation
Ce qui reste est libre d'utilisation, et tous les autres projets se le partagent : locatif, résidence secondaire, et le reste.
- En vigueur depuis le
- Source
- Décision D-HCSF-2023-2, art. 1er — Légifrance
An investor's file must fit within the norm. See the debt-to-income ratio.
Rental first or main residence first
| Situation | Rental first | Main residence first |
|---|---|---|
| You do not know where you will live in a few years (mobility, career) | Defensible: you do not fix your place of residence | Risk of early resale, which is costly |
| Your rented home suits you and its rent is reasonable | Defensible | Little urgency |
| Your income leaves a net margin after the rental property | Defensible | Also possible |
| Your income is just adequate for the intended main residence project | Not recommended: the rental property will close the door | To be prioritised |
| You are relying on a zero-interest loan and your resources are close to the ceiling | To be examined closely: the rents may allow you to fall below the ceiling | To be prioritised |
| A project for a child or an extension is imminent | Not recommended: the need for space will arrive before the capacity | To be prioritised |
Structuring the first loan with the second in mind
The depleted down payment will be missing for the primary residence. Keep the monthly instalment moderate, your savings intact, your rental income documented, and take out no small loans between the two purchases.
Simulating the two purchases
I am a mortgage intermediary working under mandate; I sell neither property nor tax relief.
- Your borrowing capacity for the primary residence alone.
- The same calculation with the rental property in place.
- The remaining grants, with the rental income added.
- The sequence that works, including any waiting period.
Documents to gather and fees online. Compare the two purchase sequences by telephone, with your two most recent tax notices to hand.
Create your file and simulate the two purchases.
Sources
- Décision D-HCSF-2021-7 — Légifrance
- Décision D-HCSF-2023-2, art. 1er — Légifrance
- Légifrance — /codes/section_lc/LEGITEXT000006074096/LEGISCTA000023361850/
- Article D. 31-10-3-2 du code de la construction et de l’habitation — Légifrance
- Légifrance — Article 1417 du code général des impôts
- Légifrance — Article 14 du code général des impôts
Read next
- How much can I borrow? Mortgage capacity in Lyon
- Financing a rental investment in Lyon: what the bank actually looks at Financing a rental investment in Lyon: the rent the bank takes into account, the expected down payment, the mode of operation and the structure that holds up.
- Rental income: how the bank calculates your debt-to-income ratio as an investor Weighting of rents, classical or differential method, disposable income: why two banks calculate an investor's capacity differently.
- PTZ 2026 in Lyon: what you can actually finance in Zone A In Lyon, the PTZ finances new-build properties, not existing ones. Retained income, basis, proportion, deferral: what you can actually finance in Zone A.
- Debt-to-income ratio: the HCSF rule, its derogation margin and how the bank applies it Calculate your debt-to-income ratio as an analyst would: retained charges, residual income, HCSF derogation, and the levers to get back under the cap.
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