Happiness can't be decreed, but buying real estate can contribute to it. From the age of 25 to 65, it's a great way to set yourself a new challenge and insure your future. Here are three ways to live happily at any age!
Where is happiness? Not necessarily in the most paradisiacal places, if we are to believe the latest immonot survey on French people's New Year's resolutions. Indeed, two thirds of respondents think they'll be getting close to it once they've completed their real estate project. It's a very real dream, and one that notaires can help make a reality, as they offer a wide range of properties for purchase. In addition to helping buyers negotiate the purchase of their house or apartment, notaries can also advise them on their financial situation. To protect their spouse, safeguard their children's interests, pass on their assets... notaries will recommend the most appropriate legal solutions. At any age, from 25 to over 60, you'll appreciate all the benefits of home ownership , building a property portfolio or acquiring a pied-à-terre by the sea, in the mountains or in the countryside. Throughout life, real estate is a faithful companion to help you achieve your goals!
from 25 to 40: build a cosy nest
Between the ages of 25 and 40, it's time to start looking for a roof over your head. The purchase of a principal residence is a key stage in the life of a French person's estate, providing them with greater comfort and more space for their children. Whether it's a new or existing property, this acquisition also represents a major financial commitment, given current market prices. That's why it's important to be well-informed and to work with the right people to find the ideal property. The notary is one of the key people to help identify the best real estate opportunities. Not only does he have a large number of exclusive properties in his file, including those resulting from estates settled in his office. What's more, he practices a highly innovative form of transaction known as "36h immo" interactive sales. These are online real estate auctions where buyers make bids and have access to properties priced at less than their market value.
In addition to these great deals, there are also a number of ways to help you buy your own home, such as the zero-interest loan and the action logement loan (interest rate of 1% for employees of companies with more than 10 employees). In addition to these measures, the banking environment is extremely favorable. Falling interest rates are reducing the cost of borrowing, and households are able to take out longer-term loans. According to Crédit Logement, the duration reached 18 years and 10 months at the end of Q4 2018, and has increased by 6 months in one year.
While real estate is akin to a form of constrained savings, given the monthly repayments involved, it can be used to build up an asset base offering a handsome capitalization. The Notaires-Insee index (an indicator based on disposable income per household) rose from 1 in 2000 to 1.78 in Q3 2017, demonstrating the strong appreciation of real estate over this period. In this context, a property can easily be renegotiated to build up capital or to reinvest. All these factors should encourage households to buy, as prices and lending rates could rise significantly between now and the end of the year.
Tips for buying well
- Select your property for the quality of its location, so you can easily renegotiate it.
- Buy at the right price, thanks to the notary's real estate expertise.
- Don't forget to take advantage of the "36h immo" online real estate auctions to seize great opportunities!
from 40 to 55: plan for happy days!
There's no reason to be overawed by the threats to our pensions. Real estate allows you to create your own retirement plan, with many advantages. Rental investment gives you the opportunity to capitalize on real estate and supplement your income. In fact, the high housing demand in major conurbations confirms the attractiveness of the real estate market. The formula involves buying a new or old property and renting it out. Rental income covers a large part of the monthly repayments.
Another advantage is that investors can take advantage of tax relief schemes to reduce their tax bill. In significant proportions, since this can represent up to 21% of the purchase price of the property being rented out, and provided that the tenant's income and the owner's rent ceilings are respected. Good news for 2019 as these advantages, which only benefited new-build properties under the Pinel scheme, have now been extended to older properties under the new Denormandie scheme.
This is a great way to build wealth while securing the real estate transaction. The risk is shared with the bank, which requires you to take out death and disability insurance. The leverage effect of credit can be fully exploited, since this real estate investment is financed by borrowing. No other investment allows for this kind of leverage.
Investment tips
- Select your property according to the rental potential of the area in which it is located.
- Measure the profitability of your investment by calculating the following ratio: (annual rents received - co-ownership charges and local taxes) / purchase price.
- Study your financing plan, between the amount borrowed and the personal contribution, to limit your monthly savings effort linked to repayment of the monthly instalments.
from 55 to 65: think about taking advantage!
Your personal and professional situation may allow you to take a little more time to enjoy a nice getaway... Perhaps retirement is approaching, and you need to think about a new place to live... These are situations that lead you to consider the acquisition of a second home. On the whole, the market remains healthy, and notaries agree that real estate is not the object of speculation, even if major cities are experiencing some price pressure.
Buying a vacation home is a good decision. Financing can be achieved by reselling an apartment purchased under a Pinel-type tax exemption scheme. Once the tax benefits have been used up, the rental property may no longer offer the expected return, given the charges and co-ownership work involved. With a view to transferring ownership, the SCI (société civile immobilière) is a good solution. It offers the possibility of grouping together to limit the purchase price of a property, since the shares are divided according to the contributions of each shareholder. What's more, it reduces the amount of gift tax payable, since it takes account of liabilities. Conversely, a conventional gift does not allow this deduction. In the event of the death of one of the co-owners, the heirs receive their shares as stipulated in the articles of association.
Tips for planning ahead
- Think about the transfer of your real estate assets early enough to take advantage of the inheritance tax allowance of 100,000 euros per child and per parent every 15 years.
- Ask your notary for advice on asset management.
Christophe Raffaillac