A rental investment refers to the fact of investing financially in a property, and therefore to become the owner, to place it for rent and thus create additional income. Rental investment can be achieved by the prior acquisition and credit of a home.
The owner of the rental property partially or totally refunds his monthly payments by using the rents he receives. This system allows the constitution of a real estate heritage.
Learn more about rental investment
Making the choice of a rental investment allows you to create a wealth by enjoying a complementary income, once depreciation of the purchase. Before embarking on this financial operation, however, it is necessary to learn about the subject. Here are some tips for you to succeed in your rental investment in new real estate.
Choose a growth area:
carefully select the geographic location of the rental property by ensuring that the area is well served by public transport and that schools, colleges, shops … are close.
Study the market:
look at real estate listings in the area to check the rate of unoccupied rental properties in the neighborhood and know the prices charged in terms of rents, to align yourself: a rent housing too high will struggle to find occupants.
Pay attention to your repayment capacity:
with a small contribution and credit over 20 years, your monthly financial effort must be low so that your repayment capacity is not penalized. Real estate rates per m2 of small areas are greater, both for purchase and for rent.
Vary your investments:
it is advisable to invest, for the same budget, in the purchase of several small real estates rather than in a single dwelling. This gives you more security in case of problems such as unpaid bills.
Calculate the profitability of the rental investment:
it is essential to make a calculation of the profitability of your rental investment , thinking in particular of the cost of the mortgage.
Inform about the tax exemption:
the law Duflot allows you to deduct from your taxes 18% of the purchase price of a new property. The Censi-Bouvard law offers you a tax reduction of 11% of the purchase price as well as the recovery of VAT for the purchase of a new rental property furnished in serviced residences.
Choose your tenant:
in order to ensure the reliability of your tenant and to avoid any problem, require from him a maximum of guarantees (amount of the rent not exceeding a third of his incomes, solidarity deposit …).
Place your home in management:
to entrust your rental property to an agency is to relieve you of any concern and approach. And be aware that the fees paid to a rental management agency (between 5 and 10% of the rent) are deductible from your property income.
Contract a guarantee:
in order to secure your property portfolio, it seems wise to take out insurance such as unpaid rent insurance or the universal guarantee of rental risks.
The word of the broker
Leveraging, the mortgage is particularly advantageous for the financing of a rental investment: your real estate purchasing power increases, your taxes fall and you offer protection to your family.