A veritable bulwark against the decline in the yield of insurance contracts and bond securities, SCPIs or real estate investment companies have become the French people’s favorite savings vehicle for several years. Before embarking on this type of real estate savings investment, here are 5 things you absolutely need to know about this subject.
1 – Operation of SCPIs
Investing in an SCPI means buying shares in a real estate company. The latter has the task of collect funds provided by private investors, in order to acquire and manage real estate.
This is being rented. The rents collected will be distributed to investors in proportion to their initial investment. There are several families of SCPI according to their specialties:
SCPI of tax exemption,
Using a wealth management firm allows you tooptimize your real estate investment, by finding for you the SCPI that best suits your objectives.
2 – An investment accessible to all budgets
One of the great advantages of an investment in SCPI is its low entry ticket. Contrary to popular belief about real estate investments, acquiring shares in an SCPI is accessible to all stock exchanges. It is possible to embark on the operation from 100 – 150€. The most expensive parts are €1,000.
3 – Different ways of investing in SCPIs
There are several possibilities to acquire shares in an SCPI. The purchase in cash allows the investor to pay for his acquisition by check or by transfer. It is also possible for him to finance his investment on credit, that is to say that he will have to take out a mortgage.
Another method for acquiring shares in an SCPI is toopt for dismemberment. This legal technique consists of the separation of the usufruct from the bare ownership. As a bare owner, the investor will not receive any rent for the duration of the dismemberment. On the other hand, he recovers full ownership at the end of it.
4 – A good bulwark against inflation
Investing in an SCPI allows you to realize low risk investment. Indeed, the risks of seeing your investment decline are low, if not zero. Rents are indeed adjusted on a regular basis to take account of inflation. Your purchasing power as an investor in an SCPI will therefore remain unchanged. It should not be forgotten that the risks associated with an investment in SCPI are the same as those for a traditional real estate investment. Safe haven par excellence, stone is a secure investment.
5 – Costs related to an investment in SCPI
Investing in an SCPI also implies that you must devote part of your returns to costs. There are two types of fees in SCPIs:
the subscription fees,
the management fees.
The first correspond to expenses related to the acquisition of property by the SCPI, such as notary fees. The second, for their part, are the costs related to the maintenance and management of assets by the company. The entry or subscription fees correspond to 8 to 12% of the initial amount invested. Management fees are between 8 and 14% of rental income. Note that the SCPI return is net of fees.