The start of the new school year is always a pivotal time for making good resolutions. What if, this year, you decided to take a closer look at your assets and add a touch of real estate investment, especially in new-build property? You'll see... you'll find nothing but advantages!
Asset no. 1
Build a safe and secure estate
Real estate has always been one of France's favorite investments, and that's no coincidence. Stone has always proved to be a safe, sustainable and profitable investment. Compared to most financial and stock market investments, it is less subject to fluctuations linked to the economic climate. What's more, if you've chosen your property wisely, it will be able to generate capital gains on resale.
The keys to a successful real estate investment
To make the most of your chances and ensure the success of your rental investment, a number of criteria need to be taken into account:
-location. Depending on the city (and district), proximity to transport and amenities... your chances of finding tenants will not necessarily be the same
- the size of the rental property
- the property's potential to evolve over time, and the prospects of capital gains in the event of resale
- the rent you plan to charge. Compare and study the competition: for the same type of property, in the same town (or, if possible, the same district), find out what rents are charged.
Asset no. 2
Supplement your income and save on tax
Whether you're in work or on the verge of retirement, an additional income is always welcome. Real estate allows you to finance your property not only through the rents you receive, but also through the tax savings you make thanks to existing tax exemption schemes. So your investment will quickly pay for itself.
Asset no. 3
Protect your family
As you approach retirement and age, your concerns change. You want to anticipate possible contingencies and protect your spouse or children. With real estate, your loved ones will have the assurance of owning a valuable asset, which they can then resell or rent out. In turn, this financial security enables them to move forward with peace of mind and make plans for the future. Real security in the event of personal difficulties or economic crisis!
Benefit n°4
Benefit from advantageous schemes
There are a number of mechanisms to help you on your way as an investor, such as :
- the Pinel scheme, which offers a tax reduction of 21% of the investment price for 12 years of rental, 18% of the investment price for 9 years or 12% of the investment price for 6 years
- serviced residences. Now is as good a time as any to consider this type of investment, as it is due to disappear at the end of 2021. But in the meantime, it's still a good opportunity to benefit from a tax reduction of 11% of the pre-tax cost of the property (purchase price and related costs), up to a maximum investment of €300,000.
- paper real estate. Instead of buying a property "directly", you buy shares through a société civile de placement immobilier (SCPI), which invests in residential buildings, offices, store premises, etc. that are rented out. The initial investment is much lower than for a conventional real estate purchase. You'll benefit from regular income (around 4% a year) without the hassle of management. The SCPI's management company is responsible for upkeep, finding tenants and collecting rent.The company then regularly pays you a share of the rents received (based on your share of the capital), after deduction of any work carried out and management fees. Rents are taxed as property income.
Tips to follow before getting started
- Take stock of your situation, taking into account not only your financial situation, but also your family and tax situation.
- Identify your investor profile (risky or secure, define what you expect from the investment, availability, yield and determine your investment strategy (short, medium or long term)
- To prepare for retirement or invest in real estate, consult your notary, who will analyze your family and asset situation and advise you in your best interests.
Asset no. 5
Take advantage of favorable market conditions
To achieve your goals, you also need to take advantage of the current economic climate. For first-time buyers looking to become homeowners, the PTZ will be a tremendous lever. If you're more interested in a rental investment, take advantage of historically low interest rates. In June, the average 20-year rate was 0.95%, and the average 25-year rate was around 1.15%. Added to this is a thriving real estate market, with no shortage of offers in major cities. Despite an upward trend in prices, especially in major cities, the market remains buoyant. And financial institutions are not reluctant to lend to investors, since they know that the loan will be repaid in large part by the rents received.
Marie-christine Ménoire