Calculation of the return on real estate investment, type of rental lease, amount of the operation and choice of accommodation: our advice for a successful rental investment in 3 key points from the search for the property to the choice of the taxation of your property income.
How to invest in real estate in 2020?
Buying an apartment to rent it cannot be improvised. And any budding investor will be careful to avoid some pitfalls on the choice of housing, its location or its tax status. What avoid some disappointments and make your real estate investment grow. Here are our tips for a successful rental investment. As you go for the developmentsnew production you can find the best investment choices made right there.
Rental investment: a reassuring investment
Rental investment is on the rise. The French are rushing into an investment whose returns exceed regulated savings and life insurance.
With very low property rates, many buyers are turning to rental investment to tax-free or to build up their assets. Moreover, “the share dedicated to rental investment explodes: + 31.8% between the 1st half of 2018 and the 1st half of 2019”, notes the Century 21 network. In 2019, according to this network of agencies, 1 in 4 property purchases is a rental investment.
Forced savings and building up of real estate assets
Households have understood that rental investment is a form of forced savings that gradually builds up wealth. When concerns about pensions are significant, when the profitability of stock market investments is uncertain, rental investment becomes all, wealthy families, more modest categories, seniors or young workers, the safe haven, underlines the network of real estate agencies.
But we do not get started in any way in an investment which represents an investment of several tens of thousands of euros. Because a bad investment can quickly become a financial pit especially if you can’t find a tenant.
Rental investment: the choice of accommodation
You want to make a rental investment this year but you do not know which type of property to direct you to. Here are some tips to remember when searching for real estate.
The surface area of the property for a rental investment
Do you peel the real estate classifieds and hesitate between a studio and a T3 for your rental investment? If this is your first operation of this type, it is better to refer you to accommodation of the studio or small T2 type. Small areas are generally rented more expensive per m² than large ones and the purchase amount is generally lower.
- In addition to building up a property portfolio, you can expect a higher or lower return on your rental investment.
- A good way to prepare for retirement or to have additional income.
- During your real estate research, think about calculating the gross yield and the net yield. These calculations will allow you to compare the yield between two real estate acquisitions.
Be careful, however, with the choice of taxation, since in all cases, you will be taxed on your rental income. Better to be advised by a professional for this choice in order to avoid paying too high taxes on your property income.
The location of your rental investment
Another basic rule to remember for any real estate investment: location above all. The location of the accommodation is indeed very important for any real estate investment.