Investing: take a fresh look at stone!

With inflation hitting our economy at +6.2% year-on-year, financial investments are suffering the full force of currency erosion... In fact, for a capital of 100 invested at the outset, inflation of 6% a year means that you can no longer buy 100, but 97 the following year, and so on! Faced with this situation, you need to open up your field of vision to higher-performing investments...
One example is real estate, whose value continues to appreciate over time, even if we are seeing some price settlements in major cities.
New-build properties in particular shine because they offer the opportunity to invest in energy-efficient homes in attractive geographical locations. These are two key criteria that contribute to the success of a property on the rental market, since occupants appreciate the low cost of ownership and the good location.
Under these conditions, an investment is a good way to generate a good return and build up assets over the long term. To verify this, all you need to do is take a look at the various advantages offered by new-build property in 2023 in terms of construction, tax exemption and value enhancement.

Examine the situation

In new-build and existing property alike, the success of the operation depends on the quality of the location. The selection criteria for a new program must take into account the various services and shops in the vicinity of the building that is about to come into being. Indeed, prospective tenants will appreciate the proximity of schools, public services, transport networks and so on, all of which make daily life easier. At the same time, it's important to choose neighborhoods that offer a quality environment, with green spaces nearby and easy access for pedestrians and cyclists. Don't forget to think ahead and imagine the neighborhood in the years to come. The town hall in the area where the building is located has information on urban development projects.

• Our advice.
  - Favoring quality locations in prime neighborhoods will ensure the best value for your investment.

Observe construction quality

One of the strengths of new-build properties lies in the construction standards resulting from the latest RE 2020 (environmental regulations). These make for environmentally-friendly, energy-efficient buildings. The aim is to achieve self-sufficiency, with homes that produce as much energy as they consume.
This is a major advantage at a time when the most energy-hungry properties are about to be banned from the rental market. This concerns homes whose consumption exceeds 450 kilowatt-hours/m²/year of final energy, i.e. a large proportion of energy class G.
This is another plus in favor of new-build properties, which set them apart from other properties on the rental market. Tenants save on running costs, while owners are spared major renovation work.

• Our advice.
  - Select a residence that stands out for its innovative design in terms of energy performance.

PINEL offer up for grabs!

Although the tax benefits of the current Pinel scheme will be reduced as of January 1, 2023, they may be maintained for investors opting for the Pinel plus scheme.
Otherwise, the values shown opposite will apply.

Evolution of Pinel reduction rates

With the Pinel plus law, investors benefit from the same maximum tax reductions as the original Pinel!

Scrutinize tax exemption

With prices per square metre generally higher than those for older homes, new-build property can take advantage of tax exemption schemes to reduce the purchase price.
With this in mind, it's worth taking a look at the Pinel scheme, which offers significant tax savings on the purchase price. With the 2023 version, the tax reduction will drop from 21% to 17.5% for a 12-year rental period. In 2024, this rate will be limited to 14%. After these successive reductions, the scheme will disappear in 2025.
With the Pinel plus law, investors will benefit from the same maximum tax reductions as the original Pinel - 21% for 12 years of rental - but will have to deal with new rules. Eligible programs will have to be located in "Quartiers prioritaires de la ville" (priority urban districts).
If they fail to meet this geographical criterion, the property will have to comply with the 2025 environmental regulations. In addition, a minimum surface area per apartment must be respected, i.e. 28 m2 for a studio, 45 m2 for a T2.

• Our advice.
  - Take advantage of the Pinel Plus scheme and get the maximum tax reduction for your investment.

Simulate rental

To assess the profitability of your investment, you need to look at rental rates. It's worth noting that the Pinel scheme requires tenants to comply with certain ceilings, and their income must not exceed a certain level.
In zone B1, in major cities such as Bordeaux and Toulouse, the rent is €10.55/m2 + a multiplier coefficient of
0.7 + 19/S ("S" being the surface area of the property). The result cannot exceed 1.2.
For a 45 m2 apartment, this gives :
0,7 + 19/45 = 1,12.
The rent is therefore 10.55 + 1.12, or €11.67/m2 for this 45 m2 apartment.

• Our advice.
  - Estimate the gross profitability of your investment using the following ratio:
  => rental income - charges / purchase price x 100
  The average ratio for your investment is around 4%.

Christophe Raffaillac