Everyone asks themselves, at the moment of embarking on life, a decisive question. Is it better to acquire your main residence or buy a property intended for rental? Each of these solutions has its own set of advantages and disadvantages. Each person will choose the one that best suits the singularities of their own situation.
Buy your main residence
Many of our contemporaries consider that the purchase of real estate represents the best way to build up a capital and pass it on to his children. Moreover, this accommodation is yours, and you can arrange it to your liking, without being accountable to anyone. In this respect, it is also better to acquire a new home. As it is in excellent condition, you will not need to undertake any work to renovate it. If you live in this department, take advantage of a new program in Calvados, which offers you personalized follow-up and all the guarantees of professional expertise.
Similarly, paying rent will often be more expensive than paying a monthly mortgage payment. And if you have kept the property long enough, you can consider reselling it for an interesting capital gain. This operation is all the more advantageous as the amount of the capital gain is not taxable.
However, the purchase of a principal residence is only advantageous if you plan to live there long term. If the residence period is too short, you will have mainly repaid the interest on the loan. In this case, renting seems more appropriate. Moreover, it is not certain that you can, after too short a period of time, realize a real added value.
This consideration is to be taken all the more into account as the evolution of society does not favor the stability of the courses. People entering the labor market can indeed expect to practice several professions during their career. Likewise, personal life begins to be built later. Indeed, the duration of studies is getting longer and many couples do not plan to have children before the age of thirty. So many factors that make you think before embarking on a credit repayment period, which can last for decades.
Finally, the purchase of a main residence represents a significant financial burden, which requires making choices, and even sacrifices. Apart from the repayment of the mortgage, and any restoration work, it is necessary to provide for the payment of the property tax and any co-ownership charges.
Another possible choice: rental investment
Invest your money in buying a rental property has advantages. The amount of the rents can first make it possible to repay the mortgage. Once retired, the rents from the rented property represent an additional income, which is added to the sometimes modest pensions. You can also place it on profitable savings products or pay for your children’s studies. In any case, this property represents a solid heritage, which will be passed on to your loved ones.
This accommodation, you can also consider living in it at some point. It is also possible to accommodate your children there who, faced with high rents, may have difficulty finding accommodation. Due to the general evolution of the real estate market, it is also likely that in the event of the sale of your property, after years of rental, you will realize a significant capital gain.
Finally, certain tax measures make rental investment a beneficial operation. In some cases, the interest on loans taken out for home renovations, for example, is tax deductible. Other measures, such as the Pinel law, encourage rental investment by granting tax reductions to buyers who decide to rent the acquired property.
However, rental investment encounters certain limits. Given the tense state of the rental market, in some places it is not always easy to find a tenant for your accommodation. To partly avoid this inconvenience, it is advisable to offer for rent a property in excellent condition, likely to attract future tenants. Unpaid rents, and the cumbersome procedures against bad payers, are also likely to discourage rental investment.
In addition, certain measures impose on landlords, in return for tax reductions, a cap on rents likely to increase the rental supply. In the same vein, rent controls, tested in a few large cities, can limit the income expected from rental investment.
Rental investment also has an interest in concentrating on new housing programs. Otherwise, the budget to be provided for maintenance work, or even renovation, makes the operation not very advantageous.
Finally, and although this scenario is not the most likely, a fall in real estate prices is always possible. To avoid some of these risks, it is therefore important, before investing in rental accommodation, to obtain all the necessary information on the accommodation and the local rental situation.
