Six units in a single building, one deed, one mortgage: the multi-unit rental building (immeuble de rapport) promises in one transaction what an investor buying flats one by one takes ten years to assemble. It changes three parameters. Price, because a whole building trades below the sum of its units sold separately. Risk, because one empty unit out of six costs 16.7% of the rent, not 100%. And the exit, because a building split into a co-ownership can be resold unit by unit, to a far wider pool of buyers.
Provided, of course, that the split is legally possible and economically worthwhile. Since 1 January 2026, every multi-dwelling residential building must hold a collective EPC (CCH — French Construction and Housing Code, art. L. 126-31), converting a building more than ten years old into a co-ownership requires a DTG (diagnostic technique global — a building-wide technical survey, CCH art. L. 731-1), and selling more than five dwellings as a single block triggers heavy obligations towards sitting tenants.
A 10% to 20% discount on a block purchase — that is the range valuation professionals observe between the price of a whole building and the sum of its units, more if it is sold occupied at low rents. No institutional statistic publishes it: it is a negotiating benchmark, not a rule.
What this article covers
This article looks at the yield of a multi-unit rental building through its multi-unit logic: where the block-purchase discount comes from, how several units pool the vacancy risk, which items separate the gross yield from the net yield, the real cost of setting up a co-ownership, tenants' rights when units are sold off, and the 2026 tax levers. A worked example on six units in a mid-sized French city runs through it.
Multi-unit rental buildings: what the law requires before dividing
A rental building held by a single owner is not a co-ownership: no by-laws, no managing agent, no legally individualised units. Dividing it is a legal operation in its own right, whose cost and timetable belong in the investment plan from the outset.
Co-ownership by-laws, schedule of division and the DTG survey
Dividing a built property into units falls under Act No. 65-557 of 10 July 1965. It requires co-ownership by-laws and a schedule of division (état descriptif de division, EDD), drawn from a chartered surveyor's measurements, identifying each unit and allocating it a share of the common parts expressed in thousandths.
Since the ALUR Act No. 2014-366 of 24 March 2014, a further prerequisite applies: converting a building more than ten years old into a co-ownership requires a DTG (diagnostic technique global), governed by articles L. 731-1 to L. 731-5 of the CCH and still in force in 2026. It records the apparent condition of the common parts and costs the works needed over ten years.
The three protections tenants enjoy
Selling the units of an occupied building is not a free hand: three distinct mechanisms apply, and they often stack over time.
| Situation | Seller's obligation | Tenant's deadline | Legal reference |
|---|---|---|---|
| First sale following the division of the building | Offer of sale to the tenant whose lease predates the division | 2 months | Act No. 75-1351 of 31 Dec. 1975, art. 10 |
| Block sale of more than five dwellings | Either a six-year extension of the current leases written into the deed, or an offer of sale to each tenant (plus a structural survey and notice to the mayor) | 4 months to accept, 2 months to complete (4 with a mortgage) | Act No. 75-1351, art. 10-1 (Act No. 2006-685 of 13 June 2006, the "loi Aurillac") |
| Sale with vacant possession at the end of the lease | Notice to sell served six months before the term, amounting to an offer of sale | 2 months | Act No. 89-462 of 6 July 1989, art. 15, II |
⚠️ Warning: the "loi Aurillac" threshold is no longer ten dwellings. Since the ALUR Act, article 10-1 of the 1975 Act covers the block sale of a building with more than five dwellings: a six-unit building falls within the scheme, and a structure built on the old threshold exposes the sale to annulment.
Collective EPC and energy decency: the whole building in 2026
Article L. 126-31 of the CCH, introduced by article 158 of the Climate and Resilience Act No. 2021-1104 of 22 August 2021, requires a collective EPC — an energy assessment carried out at building level — for every multi-dwelling residential building whose planning permission predates 1 January 2013. The timetable was phased: more than 200 units since 2024, 50 to 200 units since 2025, every other configuration, single-owner buildings included, since 1 January 2026. Validity: ten years.
Do not confuse the two levels: since 1 July 2021, the collective EPC no longer counts as the dwelling's EPC. Selling or letting a unit requires an individual DPE (Diagnostic de Performance Énergétique — the French Energy Performance Certificate), which can nonetheless be generated from the building-level assessment under the decree of 31 March 2021.
On the letting side, energy performance has been part of the decency criteria since article 160 of the same Act, which amended article 6 of the Act of 6 July 1989 and introduced article L. 173-1-1 of the CCH: class-G dwellings have been banned from letting since 1 January 2025, class F will follow in 2028 and class E in 2034 (overseas: G in 2028, F in 2031). The ban bites on new leases, renewals and tacit rollovers: a running lease continues to its term, so the deadline is triggered unit by unit, as tenants turn over.
The parameter that changes everything in 2026: the EPC reform lowers the primary-energy conversion coefficient for electricity from 2.3 to 1.9 (decree of 13 August 2025). Around 850,000 dwellings leave the "thermal sieve" (passoire thermique) category without any works — enough to redraw the renovation plan of an older, electrically heated building.
How the yield of a multi-unit rental building is built
A multi-unit rental building is not judged on the yield quoted in the listing, but on three combined effects: a discount on entry, a spread of the letting risk and a specific cost structure.
Where the block-purchase discount comes from
The reasons are economic. The entry ticket rules out almost every private buyer; the purchaser alone carries the roof, the façade and the services; they inherit running leases, hence rents often below market; and reselling requires either a new block buyer or a division.
Valuation professionals put that discount at 10% to 20% of the combined value of the units, and up to around 30% on a building sold occupied at low rents. Neither Notaires de France nor INSEE publishes a series on the subject: these benchmarks are there to negotiate with, never to calculate with.
Pooling the vacancy risk
This is the structural advantage of holding several units. On a single studio, one vacant quarter cuts the annual rent by 25%; across six units, the same quarter costs only 4.2%. The variance of income falls as the number of units rises, which makes debt service far more predictable.
That pooling is letting-related, not geographic: the six units depend on the same employment area, the same municipality and the same building. A factory closure or a compulsory façade renovation hits all six at once.
From gross to net yield: the items you must not forget
The gross yield divides the annual rent by the all-in purchase price, fees and works included. The orders of magnitude commonly observed in 2025-2026 by operators cross-referencing asking rents with transaction prices put mid-sized cities at around 7% to 10% gross (Saint-Étienne frequently exceeds 8%) and the large metropolitan areas at 3.5% to 5.7%: no public observatory publishes rental yields city by city. The gross-to-net method is set out in our guide to the calculation of gross and net rental yield.
Three items open the gap. Acquisition costs on existing property weigh 7% to 8.5% of the price since the 2025 Finance Act allowed departments to raise their share of the transfer duties from 4.5% to 5% between 1 April 2025 and 30 April 2028: 83 departments apply it, taking total transfer duties to around 6.32%. Then the property tax: up 37.3% between 2014 and 2024 according to the 19th national property tax observatory published by the UNPI (October 2025); for 2026, the rateable-value revaluation coefficient is 1.008, i.e. +0.8% (CGI — French General Tax Code, art. 1518 bis), before any locally voted rate increases. And finally the non-recoverable charges — non-occupying owner insurance, common parts, management, major works — against rents that only rise at the pace of the rent reference index (IRL). Conversely, the building's ancillary space — cellars, garages, parking spaces — lets separately: its own economics are covered in our analysis of the yield of a parking space or garage.
Selling unit by unit: what dividing costs and what it returns
Selling unit by unit means dividing the building into co-ownership units and then disposing of them separately, to capture the gap between block value and retail value. The operation is neither free nor tax-neutral.
The real cost of setting up the co-ownership
Five items must be budgeted: the chartered surveyor's fees for the schedule of division and the by-laws, the DTG survey if the building is more than ten years old, the mandatory per-unit diagnostics (individual EPC, asbestos, lead, electrics, environmental risks), marketing fees and deed costs. Across six units, the whole commonly represents 6% to 8% of the sale proceeds. Then there is time: between the surveyor, clearing the pre-emption rights and marketing unit by unit, a full division spans several financial years, during which the emptied units produce no rent.
The two tax levers for a building to renovate
The property income deficit (déficit foncier) remains the most direct lever on unfurnished lettings: deductible charges exceeding the rents offset against total taxable income up to €10,700 a year (CGI, art. 156, I-3°), a cap raised to €21,400 for energy-renovation works that move a dwelling from class E, F or G to a class between A and D — a doubling extended to 31 December 2027 by the 2026 Finance Act. The mechanism is detailed in our article on the Jeanbrun scheme and buying an energy-inefficient home to let.
The second lever is the private landlord status created by article 47 of the 2026 Finance Act (Act No. 2026-103 of 19 February 2026), codified in article 31 of the CGI. For acquisitions made between 21 February 2026 and 31 December 2028, it opens an annual depreciation of 3% to 5.5% on 80% of the price, in exchange for an unfurnished letting as the tenant's main residence, a nine-year commitment and the actual-expenses regime. On existing property with heavy works — the threshold is set by decree — the rates are capped at 3%, 3.5% or 4% depending on the rent level, within €8,000 to €12,000 a year. As the scheme only covers dwellings in a multi-dwelling building, a rental building divided into unfurnished let units qualifies unit by unit.
The risk of being reclassified as a property dealer
Dividing and then reselling several units over a short horizon exposes you to reclassification as a property dealer (marchand de biens — French BIC tax status under CGI article 35): the regime switches to industrial and commercial profits, with no holding-period allowance and VAT to manage. The boundary turns on the speculative intent at purchase and the repetition of transactions, analysed in our article on the property dealer's margin and the VAT-on-margin regime.
Case study: a six-unit building in a mid-sized French city
You take over an older six-unit building in Saint-Étienne: two studios of 28 m², three one-bedroom flats of 45 m² and one two-bedroom flat of 79 m², i.e. 270 m² of living space. The median price of existing flats there stands at around €1,270/m² (DVF transaction data, readings November 2025 – July 2026); given the condition of the units, their combined retail value is estimated at €325,000. The building is negotiated at €270,000 as a block.
Scenario — Block purchase, refurbishment, letting
| Item | Calculation detail | Amount |
|---|---|---|
| Combined retail value of the six units | 270 m² × €1,205/m² | €325,000 |
| Negotiated block price | Discount of 16.9% | €270,000 |
| Acquisition costs | 7.8% (transfer duties at 6.32%) | €21,100 |
| Refurbishment works | Roof, stairwell, two units | €45,000 |
| Total budget invested | — | €336,100 |
On the income side, the 2025 Rent Map published by the French housing ministry and ANIL puts flats in Saint-Étienne at around €10/m² in asking rent including service charges. Taking €9/m² excluding charges, the six units produce €29,160 a year.
| Annual item | Basis | Amount |
|---|---|---|
| Rent excluding charges | 270 m² × €9/m² × 12 | €29,160 |
| Property tax | Six units, mid-sized city | −€3,200 |
| Owner insurance and common-parts upkeep | Flat amount | −€1,800 |
| Letting management | 7% of rents, incl. VAT | −€2,040 |
| Vacancy and arrears provision | 6% of rents | −€1,750 |
| Major maintenance provision | 5% of rents | −€1,460 |
| Net income after charges | — | €18,910 |
| Gross / net-of-charges yield | Against €336,100 | 8.7% / 5.6% |
Financed at 80% over twenty years at 3.30% — the average second-quarter 2026 rate stands at 3.24% according to the Crédit Logement/CSA observatory — the operation carries an annual instalment of about €18,400 excluding insurance: the net income after charges only just covers the payment, before tax. That is the typical position of a building at 8.7% gross: cash flow close to zero, and €45,000 of works deductible as a property income deficit to neutralise tax in the early years.
Five years later, the building has been refurbished and you start the division. At constant market prices, the six renovated units are worth around €1,370/m², i.e. €370,000.
| Exit item | Detail | Amount |
|---|---|---|
| Combined value of the six renovated units | 270 m² × €1,370/m² | €370,000 |
| Chartered surveyor (schedule of division and by-laws) | Six units | −€4,500 |
| DTG technical survey | CCH, art. L. 731-1 | −€1,800 |
| Per-unit diagnostics | 6 × €550 | −€3,300 |
| Marketing fees | 4% of the sale price | −€14,800 |
| Deed costs, mortgage release, sundries | Flat amount | −€1,500 |
| Net sale proceeds | — | €344,100 |
| Gap with the budget invested | €344,100 − €336,100 | +€8,000 |
The result deserves a cold reading: the division only produces an €8,000 gap with the budget invested, i.e. 2.4%, before capital gains tax. That is not where the performance sits: over five years the mortgage has repaid around €51,600 of principal funded by the rents, and it is that transfer which carries the operation.
Key takeaway: a division that only yields a marginal gap is still useful if it turns one illiquid asset into six liquid ones. But without a real discount obtained at purchase, dividing consumes more than it creates.
The four mistakes that ruin a multi-unit operation
Mistake No. 1 — Banking on a "guaranteed" 30% discount
No institutional source quantifies the block discount. The 30% figure that circulates in sales pitches is only reached on buildings sold occupied at rents well below market: there, the discount pays for capped income, not for a bargain. On a vacant or properly let building, it often falls to 10%.
Mistake No. 2 — Ignoring tenants' pre-emption rights
Two texts stack. The first sale following the division requires offering the dwelling to the tenant whose lease predates the division (Act of 31 December 1975, art. 10). And the block sale of a building with more than five dwellings — not ten — requires either a six-year extension of the leases written into the deed, or an offer of sale to each tenant. A marketing timetable that fails to clear those rights exposes the sale to annulment.
Mistake No. 3 — Believing the collective EPC is enough
Since 1 July 2021, the collective EPC no longer counts as the dwelling's EPC. Every unit sold or let must have its own assessment, possibly generated from the building-level one (decree of 31 March 2021). Turning up at the notary with only the collective EPC blocks the signing.
⚠️ Warning: the ban on letting class-G dwellings since 1 January 2025 does not force sitting tenants out. It applies at a new lease, a renewal or a tacit rollover. Across six units, it is therefore the turnover calendar, not a single date, that drives the works plan.
Mistake No. 4 — Underestimating the costs of a whole building
Under single ownership there is no works fund and no charges to share: every euro of roof, façade or electrical upgrade is yours alone. Add a property tax multiplied by the number of units, and the gap between the advertised gross yield and the real net yield frequently exceeds three points.
Work out your multi-unit building before you sign
Mon Simulateur Immobilier multi-unit building simulator
Enter the block purchase price, the acquisition costs, the works budget and the rent of each unit: the simulator computes the gross yield and the net-of-charges yield of the whole, including property tax, non-recoverable charges, vacancy and financing. You get the annual cash flow and the rent threshold above which the operation funds itself.
To go further: the rental yield simulator to compare unit by unit, and the recoverable charges calculator to separate what the tenant reimburses from what stays with you.
Conclusion
The yield of a multi-unit rental building is decided on three fronts. At purchase, the block discount — 10% to 20% according to practitioners — is the only genuinely acquired margin. In operation, several units smooth vacancy but concentrate market risk and increase costs, property tax first. At the exit, converting to a co-ownership turns one illiquid asset into several liquid ones, at the price of a legal process framed by the 1965 Act, the DTG survey and tenants' pre-emption rights.
Before you commit, cost the operation as a whole. The Mon Simulateur Immobilier multi-unit building simulator aggregates the rents, charges and financing of every unit to reveal the real net yield and the cash-flow break-even point.
