Diversifying your portfolio, preparing for retirement, or reducing taxes, the benefits of rental investment are numerous. However, embarking on such a project requires certain rigor and a good understanding of the real estate market.
So, how can you make your rental investment a success? Let’s delve into it!
Choosing a Well-Located Property
Successful rental investment starts with choosing “the right address.” A well-located property is easy to rent and reduces the risk of vacancy. It also allows you to make your purchase profitable.
To do this, several criteria must be considered:
- Green spaces;
- Proximity to shops, cinemas, and transport;
- Proximity to schools and daycare centers.
Also, evaluate the potential of the location based on the profile of tenants you wish to welcome: couples, young people, students, families, etc. Do not hesitate to opt for a dynamic city with growing demographics.
Choosing Your Property Wisely
The type of property is also a key element. New and old real estate properties each have their advantages. For example, investing in new construction and VEFA (Sale in Future State of Completion) allows you to enjoy several benefits:
- Reduce maintenance costs;
- Enjoy a property equipped to your taste;
- Save on your energy bills;
- Benefit from reduced notary fees (up to 3% of the property price);
- Benefit from a two-year damage insurance.
Older properties, on the other hand, allow you to: Save money; they are generally less expensive; Benefit from the immediate availability of the property: no need to wait for the property to be built. Keep in mind that if you invest in an old property, it is very likely that work will be necessary. Energy renovation, compliance with standards, decoration… The cost can quickly climb!
It is therefore essential to estimate the amount of work upfront. Discover all the real estate listings in Paris and buy the property that meets your criteria!
Establishing the Profile of Future Tenants
For this, several criteria must be taken into account: the solvency of the tenant, type of housing, etc. If, for example, you wish to rent your property on a short or medium-term seasonal rental basis, consider buying a property to furnish. Make sure your ad is attractive and detailed. Finally, do not hesitate to highlight the advantages of the property (proximity to amenities, recent renovation…).
Are you an expatriate and want to rent your property in France? Keep in mind that the inventory of fixtures upon entry must be carried out meticulously to avoid any subsequent disputes. A real estate agency makes this process easier for you.
Consider Your Borrowing Capacity
Unless you have a lot of cash on your savings accounts, you need to assess your borrowing capacity. Think about determining the maximum amount your bank can lend you. Often, banks consider several criteria to calculate your purchasing power, such as:
- The amount of your personal contribution;
- The duration of your loan;
- Buying new or old property;
- Your fixed income.
The bank will particularly examine your debt ratio, your savings capacity, and the stability of your income. Do not hesitate to highlight the rents you plan to receive; they can be considered an additional source of income.
Estimating Your Profitability
Estimating your profitability is also to be considered to succeed in your rental investment. It is also important to anticipate the rental risk: will your property be rented continuously? Is the rent amount suitable for the local market?
Do you want to make a real estate appraisal for a luxury property? To achieve this, the support of an agency is essential. It performs a market analysis, competition offer, and sets up a tailor-made sales strategy!
Taking Advantage of Tax Opportunities
Tax schemes allow you to benefit from a tax reduction or depreciation of the property, depending on the scheme chosen:
- The Pinel scheme: it offers you a tax reduction on income tax of up to 21% of the cost price of the housing, in return for a rental commitment for 6, 9, or 12 years.
- The Non-Professional Furnished Renter (LMNP) status: it allows you to amortize the value of your property and the work carried out. Rental income can thus be offset by expenses and amortizations. For example, if your income does not exceed €72,600/year, the micro-bic regime allows you to benefit from a flat-rate deduction of 50% on your rental income.
In sum, a rental investment requires careful planning and a sharp knowledge of the real estate field. Do not hesitate to get support from professionals for a successful rental project.