Investing in real estate can be an attractive investment, especially when it is new or under construction. A French taxpayer also has the possibility of buying property abroad. Spain and the United States are attractive countries.
How to invest in real estate?
Before investing in real estate, the future buyer should take into account the location of the property he wants. He will have to privilege an environment without vis-à-vis for example. It is necessary, before taking the steps, to inquire at the town hall services, concerning possible constructions planned in the vicinity of the future property. If the investment concerns a rental property, it is necessary to invest in an area where the market is attractive. A tense area will be particularly appropriate.
The future buyer will have to choose whether to invest in new or old. The taxation of an investment in new is more advantageous. This type of housing is also more functional, since it meets environmental standards and thermal regulations. In addition, the buyer will benefit from reduced notary fees, only 2% to 3% in the new, compared to 6 or 7% in the old.
The choice of the method of financing is also one of the parameters to be taken into account when buying a property. It is preferable to take out a property loan, even if the future buyer can afford to pay cash.
The surface area of the property also plays a role in the decision. The larger the property, the greater the amount of rent received.
Investing in real estate without contribution
A contribution is a sum of money, which will enable the buyer to finance part of the property acquired in cash. It also makes it possible to obtain advantageous real estate loans, since it represents a guarantee of solvency for banks and credit institutions. However, it is quite possible to invest in a property without a prior contribution. An investment in a dwelling intended for renting can benefit from a loan without an agreement, since it is possible to finance it thanks to the rental income received. However, the future buyer will have to present the bank with a reliable project, as well as a solid file, in order to be able to benefit from this loan. The coveted property must benefit from quality services, and must be ideally located. It can be a service residence, such as an EHPAD or a student residence for example.
The rate of indebtedness of the real estate loan without contribution will be calculated according to the incomes of the purchaser and his expenses. It represents 33% of his resources.
Investing in rental property
Investing in a rental property offers several advantages, as well as attractive taxation. This purchase allows a tax reduction, but also to build up a retirement capital or an estate. It also constitutes a significant retirement supplement, derived from the rents received. However, the future buyer will take into account the location of the property. He will check that the property is not located in one of the sixty towns to avoid, due to a saturated rental market.
If the buyer decides to invest in the new property, he will benefit from a tax reduction, proposed by the Pinel, Censi-Bouvard or LMNP law. Older properties to be renovated also offer advantageous taxation, especially if they are located in a protected area.
Investing in real estate abroad
It is possible for any taxpayer residing in France to invest in real estate abroad. However, it is advisable to give preference to property in Europe or the United States, where the political and economic situations are predictable. Moreover, in times of crisis, the price of rents tends to fall sharply.
Before acquiring a property abroad, you will have to go through several stages. First of all, it is important to check the land register. Some countries make it complicated, even difficult, for people to own property. The future buyer will also need to know the amount of taxes at the time of purchase.
It is possible to take out a home loan abroad, if the beneficiary receives a salary locally and has an address in the country.
Investing in real estate in France
Before investing in France, future buyers should find out about regions where the rental market is attractive, i.e. where demand is stronger than supply. This is not the case in all departments. It will then be necessary to privilege the regions with a positive evolution of the population, but also to inquire about the prices of the rents. In 2015, it is preferable to invest in rental housing in Languedoc-Roussillon and Midi-Pyrénées for example. The capital is also a safe bet, since demand is much higher than supply. Holiday regions, such as the Côte d’Azur for example, are also prime areas for investors.
Investing in real estate in Spain
Investing in a rental property in Spain has many advantages. Victim of the crisis, the country has suffered a significant drop in prices. It is also a popular holiday destination for international tourists and locals alike, where rental demand remains strong throughout the year. Although Barcelona and Madrid are prime locations for property, the Mediterranean and Atlantic coastlines provide an ideal environment.
However, and even if the quality of the properties is generally constant, the future investor will have to be wary of teaser ads. He could then make a bad purchase.
Investing in US real estate
US tax law allows the purchaser to amortize part of the investment over 28 years. In addition, the amount of the allowance is calculated on 80% of the purchase price. Another $3,900 deduction is granted on the net income to be declared.
It should also be pointed out that the United States has been offering extremely attractive property prices since the subprime crisis. The price per square metre is between €650 and €800, almost half the price in France.