Rental investment: How to invest your money?
The rental investment is a real estate purchase, the interest of this investment is to benefit from additional income. The goal is to buy to rent, in order to build a real estate heritage, to provide him with his legacy and to guarantee an annual income for his retirement. Rental real estate investment can target a house, apartment or even a building.
What are the conditions to make a rental investment?
Certain conditions must be met to guarantee the success of a rental investment. These conditions relate to:
- Debt ratio
- Your heritage
- Your income
To simplify the task when you invest, Walter Mitty compares for you the offers offered by different banks. For your rental investment to be a success, we will study your profitability for the years to come. For this, you must, for example, analyze the various fees in order to calculate in advance your potential profits and losses.
Why make a rental investment?
Investing in rental real estate offers many advantages that allow you to afford certain guarantees when your retirement arrives:
- This investment guarantees you an annual rental income that allows you to complete your retirement
- The possibility of leaving home to your loved ones
- Obtaining a real estate heritage
- Finance a loan through rents collected to make other real estate investments in the rental
- Tax reduction
How to choose your rental investment?
As said before, the rental investment targets real estate that is intended to be rented to third parties. The interest is to improve its property income, benefiting from tax cuts, among these devices, there are:
The Pinel scheme gives buyers of new homes the opportunity to obtain a tax reduction:
- A tax reduction of 12% on the amount of the investment over 6 years
- An 18% tax reduction on the amount of the investment over 9 years
- A tax reduction of 21% on the amount of investment over 12 years
This device also allows you to purchase up to two properties a year up to a limit of 300,000 euros.
what are the costs of a rental investment?
A rental investment is profitable if managed properly, but its profitability does not come only from rental income. There are certain expenses in this type of investment, these charges can come from:
- Maintenance of the property
- Work to be done in the dwelling
- The different management fees
When all these costs are taken into account, the profitability of a rental investment is reduced.
What precautions must be taken before making a rental investment?
The precautions that must be taken are:
- The location
- The quality of the property
These elements will allow you to rent and make the real estate even better.
However, it is necessary to be careful in the choice of the tenant so that any disappointment is avoided, as in the case of an unpaid rent for example. For this, do not hesitate to ask for evidence to prove that the person wanting to be a tenant of your property is credible, some real estate agencies can help you find a serious tenant.