Investing in real estate is one of the best ways to grow your money today. It is recognized as a safe haven, profitable and secure, for various reasons. Let’s go back together to 7 of the many advantages of investing in this sector.
Summary
1- Interesting tax reductions
Depending on the type of property chosen and the use you wish to make of it, you can benefit from very interesting tax cuts by investing in real estate.
Indeed, in order to meet the crying need for housing, the State has put in place several measures to encourage real estate investment. Here are two that are among the most popular and advantageous for investors:
Real estate investment under the Pinel Law
The Pinel device allows the investor to reduce the amount of your income tax by investing in a new home or in VEFA (Sale in the state of future completion) until December 31, 2024. The percentage of reduction depends on the duration of the rental:
- 12% for a 6-year commitment;
- 18% for a 9-year lease;
- 21% for a rental of 21 years.
To benefit from it, the accommodation must respect certain conditions concerning the geographical location, the resources of the tenant and the amount of the rent.
The Censi-Bouvard device
This device provides a 11% tax reduction on the purchase price excluding tax of real estate within the limit of 300,000 euros and to recover the real estate VAT.
In order to benefit from these advantages, the property purchased must be a furnished service residence and it must be rented for a period of 9 years.
2- An investment accessible to all budgets
Contrary to some popular ideasinvesting in real estate does not necessarily require a large budget. Indeed, rental investment is not the only option available to you. There are also several niches accessible to small budgets.
For example, you can invest in an SCPI with a few hundred or a few thousand euros, start with a parking space or even a cellar. The most important thing is to start.
3- The possibility of investing on credit
A financial asset can be financed through a bank loan. The rents collected are then used to repay part or all of the monthly loan payments. Once the loan has been 100% repaid, you become the full owner without having made a big savings effort.
It should be noted, however, that to obtain a bank loan, good financial hygiene is essential.
4- A solution to generate passive income for life
Real estate investing is an excellent option for people who want to have a second source of income, without having to work. It is particularly attractive for those looking for additional income in retirement.
Indeed, it is possible to rent the purchased property and draw rent from it each month.
Several rental options are possible in this context:
- The empty rental;
- Furnished rental;
- Vacation rental;
- Seasonal rental, etc.
5- A way to build a lasting heritage
Investing in real estate allows you to build up a long-term heritage. Said heritage can be made available to the family or used by the investor himself during his life. For example, with an investment in the Pinel Law, it is possible to accommodate a student child during the first years.
Afterwards, the real estate can be bequeathed to heirs or to any person of your choice.
The transmission can also be prepared and optimized for tax purposes through strategies such as the creation of a civil real estate company.
6- Good profitability
Real estate remains, to this day, one of the most profitable investments in the world. In France, thehe gross return on an investment in rental property can reach 12% against, only 2% for a classic savings. However, to obtain such results, it is important to design your project well and ensure optimal management.
7- A relatively low-risk investment
Each crisis proves that stone remains one of the safest investments there is. Indeed, the real estate market is not very subject to negative fluctuations, economic conditions or even inflation. An acquired property does not lose its value over the years; in general, he wins rather.
This is not necessarily the case for other types of financial investments.
Moreover, real estate has a reassuring side, because the result of your investment is tangible. You can touch it, see it and visit it. You also have some control over its day-to-day management. For example, you can increase its value by carrying out development work, use it yourself or even resell it to meet an urgent need.
In addition, to protect you against unpleasant surprises such as unpaid rent, there are various rental guarantees such as:
- The guarantee by joint surety;
- The guarantee of unpaid rents;
- The Visale guarantee;
- Non-occupant owner’s insurance;
- Rental holiday insurance, etc.
In summary, investing in real estate has various advantages. To take advantage of this, be accompanied by an expert in the field in order to make the best choices of locations and set up a solid project over the long term.
