Nowadays, choosing a real estate program for a rental investment represents many advantages, both in terms of tax and fees. In addition, real estate remains the preferred investment of the French because of the security of the investment, its accessibility and the simplicity of its implementation. Return on the multiple advantages of an investment in rental real estate.
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The health crisis has had (and still does) serious consequences for many sectors of our economy.
However, the rental real estate market has been relatively spared, which is why it is still, and more than ever, a lever of secure investment opportunities for investors.
Indeed, with interest rates still low at the start of 2022 and prices that will surely rise at the end of the year, the period is still favorable for rental investment.
With a view to changing the living environment, rental investment is always attractive, because people are now looking for
- a calmer environment;
- A more comfortable inner surface;
- Access to an exterior, even if it means moving slightly away from a center or a city.
With such momentum, market prices in rental investment have held up and even experienced a notable rise at the end of 2020 – beginning of 2021.
Finally, real estate investment remains a safe haven in 2022, in particular because it represents a great security compared to traditional financial investments.
The low cost of mortgages and the addition of tax exemption schemes still in force, such as Pinel and Censi-Bouvard, to name but a few, make it possible to consider rental investment as a very interesting opportunity.
Here is a significant list of the main advantages of investing in rental property.
A stable, profitable and safe investment
Unlike a stock market investment, rental investment is much less affected by the economic situation.
Without exceptional cases (degradation of the property, radical change in the environment of the property), it is very rare to see a dwelling depreciate in the medium and long term.
In addition, rental investment allows you to benefit from credit leverage. Indeed, this loan can be fully or partially repaid with the rents collected.
Finally, the return offered by rental investment can go up to 7% depending on the type of property, while the return on life insurance, for example, is currently below the 2% mark.
Control of your budget
By choosing to invest in rental real estate, you become the owner of a home which helps to increase or create your real estate assets.
You have full control of your home. So you do the work you want, you resell when you want.
The constitution of a long-lasting heritage
The rental investment represents one of the surest investments to create a long-lasting heritage.
You don’t need to have an exceptional level of income to get started.
Very often, the first stone in this heritage building is the purchase of a main residence, which is extended by other rental properties.
An opportunity to prepare for retirement
When you retire, an average loss of 25% of your income is estimated. And while day-to-day expenses continue to rise, health costs increase with age, it can be interesting to anticipate this new future, right?
With additional income through real estate investment, you have an ideal alternative to maintain your lifestyle after 65 years.
The opportunity to protect your family
Rental investment represents an opportunity in terms of provident insurance. Financed by the rents received and optimized by tax savings, this solution allows you to build up your assets while protecting your family from the vagaries of life.
Rental investment is a solution favored by the French, in particular because it allows you to make significant savings thanks to the various income tax reduction systems.
And these devices are aimed at all types of investors and whatever the project in view.
Thus, with the Pinel device, and an investment in new rental, you can obtain a tax reduction over a given period.
This gives this:
The tax reduction depends on the duration of the rental. It amounts to:
- 12% of the housing price for 6 years;
- 18% for a period of 9 years;
- 21% for a period of 12 years.
The Censi-Bouvard scheme helps you save 11% on the cost price of furnished accommodation in serviced residences as well as recovering VAT.
This system is reserved for private investors who do not exercise LMP status.
There is no condition related to the zoning of the property, as is the case with the Pinel device for example.
The duration of the investment is at least 9 years and can start within 12 months following the delivery of the goods or the completion of the works.
Malraux and Historic Monuments schemes
And if you are looking to carry out renovation work in the rental accommodation, the Malraux scheme or the Historic Monuments (MH) scheme will help you benefit from tax deductions as well as an exemption from inheritance tax.
The Malraux scheme, more particularly, is aimed at investors in old buildings to be rehabilitated with the possibility of a tax reduction of 22 to 30% on the amount of work carried out.
For the Historic Monuments scheme, the deduction is made on renovation work. This device makes it possible to deduct all property income expenses, without any ceiling.
For investors who have LMNP (furnished non-professional) or LMP (furnished professional) status, there are advantages here too. In concrete terms, you can deduct the expenses related to your investment, then charge the land deficit to your overall income.
This is then the opportunity to carry out depreciation and, possibly, to benefit from an exemption from capital gains.
Rental investment is a solution for investing your money in a sustainable and safe way. Depending on your situation and the amount of your income, certain tax measures will allow you to benefit from them without fear.