Making a rental investment can be very profitable if you carefully consider the suitability of a rental property investment under certain conditions.
Buying new real estate or building up real estate for rental and furnished rental is one of the investments generating the most valued rental income for the French. Over time, the value can increase very quickly and thus generate capital gains on resale. It can also earn additional property income from its rent after deduction of fees and taxes.
From the moment we talk about investing in the rental, we obviously have to think about the profitability of the investment. It is therefore imperative to carefully study the rental value and rental yield of a property before investing in it, especially in a context of low interest rates. It is for this reason that we must never lose sight of the long and medium-term objectives to be achieved as a result of such an investment.
In fact, the average rental rate of return for a property varies from city to city and from neighborhood to neighborhood within the same city. It is therefore necessary to take into account the local rental property market and neighborhood trends.
For example, investing in a home can certainly achieve a good capital gain on resale, on the other hand, it is not certain that it is accompanied by good rental profitability.
Investment in new or old?
Then, you have to choose between investing in new housing which most often presents tax advantages, or in old real estate which may present enormous advantages in terms of quality and long-term profitability, depending on the occasion.
However, don’t forget to consider the work ahead. The best way to do this is to use the services of real estate and wealth management professionals, who can also be particularly useful in matters of property taxation and give you a tax advantage.
Once you’ve made a decision to buy, it helps to know some price negotiation techniques and how to make an offer to buy.
When you talk about making a good investment, you are also talking about financing. A good mortgage at a good price must be negotiated with the bank to optimize the amount of mortgage repayment in relation to the amount of rents.
It is also important to familiarize yourself with the real estate tax exemption system to take full advantage of tax reductions. See, for example, the Pinel 2020 law, which is none other than the old Scellier device. It allows tax breaks of up to € 63,000 over a 12-year period for purchasing new housing (or in the future state of completion) and renting it empty for use as a main residence for 6 years.
You should also avoid investing in one of the 60 cities named by Crédit Foncier where you should not make rental purchases. Indeed, in some cities, the rental supply is even higher than the demand and the rents received are automatically reduced.