Rental investment is a real estate purchase that aims to be bought in order to be rented out. The interest of this investment is to benefit from additional income while building up real estate assets.
This type of inheritance allows family and friends to benefit from an inheritance and guarantee an annual income for retirement. Rental real estate investment can target a house, an apartment or even a building.
What are the conditions for making a rental investment?
Certain conditions must be met to guarantee the success of a rental investment. These conditions relate to:
- Debt ratio
In order to simplify your rental real estate investment procedures, Labougeotte negotiates the offers of its various partner banks on your behalf.
Indeed, the steps to access the property turn out to be complex, especially when it comes to rental investments. This is why since 1999, Labougeotte expert real estate loan broker offers you the best rate for your real estate acquisition.
Why make a rental investment?
Investing in rental property offers many advantages, while receiving additional income:
- This investment guarantees you an annual rental income that allows you to supplement your retirement
- The possibility of bequeathing a home to your loved ones
- Obtaining real estate
- Finance a loan through the rents collected to make other real estate investments in the rental
- The tax reduction
Often, rental management is attractive over the long term; whether it is a furnished rental or not, for small or large surfaces.
The real estate market has the tax benefit of tax reduction; in particular thanks to the conditions of the Pinel Law replacing the Duflot law, the most widely used tax-exempt investment.
How to choose your rental investment?
As said before, rental investment targets real estate that is intended to be rented out to third parties. The interest is to improve its land income, by benefiting from tax reductions, among these devices, there are:
The pinel law
The Pinel system gives buyers the opportunity to obtain a tax reduction:
- A 12% tax reduction on the amount of the investment over 6 years
- A tax reduction of 18% on the amount of the investment over 9 years
- A 21% tax reduction on the amount of the investment over 12 years
This system also allows you to acquire a maximum of two real estate assets per year up to the limit of 300,000 us dollars.
The Censi-Bouvard device
This device allows tax reduction if the investment is made in a student residence, EPHAD, etc.
This device can be combined with the LMNP status if the acquirer so wishes.
LMNP / LMP statutes
Purchasers who benefit from the Leaseeurs en Meublé Non Professionnel / Rented Furnished Professionally (LMNP / LMP) status will benefit from tax advantages on rental income. All of these land charges are deducted with this status on your taxes. Your next heirs can also obtain these rights.
What are the costs of a rental investment?
A rental investment is certainly profitable over time if it is managed correctly, but be careful to take into account the financial constraints associated with it. These charges can come from:
- Maintenance of the property
- Work to be done in the accommodation
- The different management fees
When all these costs are taken into account, the profitability of a rental investment is reduced.
The owner of a rental property has a property deficit when the charges he bears (repair costs, maintenance costs, property tax, etc.) are greater than the remuneration he receives.
What precautions should be taken before making a rental investment?
Carry out a careful study of your future rental acquisition
The precautions that must be taken before making a rental investment are its location (town center, public transport, shops, etc.) and the quality of the property (new, old with or without work).
These elements will allow you to rent and monetize the property even better. It is imperative to analyze real estate and its surroundings before investing. Indeed, it is important to take into account the current local rental real estate market as well as its trends over time.
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 supporting documents which 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.
Take into account all the conditions relating to your loan
Finally, it is important to choose the right tax system as well as the right type of rental contract with certain mandatory legal notices. The tax advantage of a bare rental on a renewable 3-year lease, a furnished rental or a seasonal rental on a rental holiday.
In order to get an idea, estimate your real estate project for free via our online simulator. Investing in rental property has never been so easy, benefiting from the support of our Labougeotte experts since 1999.
Free simulation without obligation. Personalized and secure response within 48 hours.
Consider taking out a rental guarantee
The Rental Guarantee is essential and must be taken out for each accommodation you wish to insure.
The Rental Guarantee is an insurance which guarantees the payment of the rents of your property. You are thus guaranteed to get a return on your investment.
Several choices are available at greendayonline.com`s website. You can choose to opt for classic unpaid rental insurance; or else, for the new universal rental risk guarantee (covering debts up to $ 70,000 per unit, deterioration up to $ 7,700, etc.). For more information, contact our subsidiary, expert in insurance INIXIA , for individuals and professionals.
How to borrow for a rental investment?
Rental investment is one of the only investments that can be made on credit by a real estate broker such as Labougeotte. This placement is therefore the favorite of the French. Moreover, it is possible to invest in real estate in rental investment without personal contribution .
The best Labougeotte real estate brokers can study your rental investment project with you to determine if it is viable and its rental profitability. We provide you with a professional and transparent service in order to invest in real estate and tax exemption with ease whether you borrow as an individual or via a SCPI or even a Professional SCI .
There are many real estate investments to invest: Robien, Scellier, Borloo, Girardin, Loueur Meublé Non Professionnel, Malraux, Duflot, senior residences, serviced residences… There are a large number of tax systems related to real estate, only one study asset management carried out by an independent specialist will secure and optimize your project.
With Labougeotte, specializing in mortgage financing since 1999, you benefit from several solutions to make your rental investment a success and obtain additional income:
- A wide choice of quality programs
- One of the lowest credit rates on the market
- “Special Investor” borrower insurance
- Guarantee of unpaid rents
Thanks to our simulator calculating the amount of your monthly payments you will be able to estimate the amount of the rent of your property.