Tips for Investing in Real Estate
The French are more and more interested in the idea of building a heritage. By investing in real estate, they can put the property up for rent, in order to repay their loan. Many laws help the French to do this. But how do you know if real estate investing is for you?
HOW DO I KNOW IF I CAN BUY REAL ESTATE?
Have you seen an advertisement and you think this apartment would be perfect for student rental? But depending on its price, you wonder about the feasibility of the project.
It is imperative to know if you are solvent; that is to say if you will be able to repay the credit that will be allocated to you by the bank.
To find out, you can do a simulation on the internet . These tools are completely free. By entering your income and your expenses, it allows you to see what is your remaining life. The latter will depend on your family composition.
If the rest to live on is sufficient and, taking into account the sale price of the property, your debt capacity does not exceed the 33% required by the legislation relating to credits, you will probably be able to invest in this property. In order to be certain, it is better to approach a bank advisor.
WHY INVEST IN REAL ESTATE?
Of course, being an owner implies obligations. If the property is rented out, it must present all the safety standards required so as not to put its tenants in danger. Some repair work also needs to be done. But collecting rent every month is very pleasant and often allows you to repay the loan that has been taken out with a bank.
Rates are historically low, which offers very good opportunities. Especially since it is possible, when you are a little handyman, to buy a house requiring some improvement work, at a lower cost. There are then two very attractive options. Renting the house, with a rent higher than what you could have claimed, without the work is the first possibility. Reselling it for a profit is another.
Repayment times vary depending, in particular, on the age of the borrower. You can, if you are young, take out a loan for 10 or 15 years, to quickly become the owner and do other projects. But you can ask to do it over 20 or 25 years, depending on the bank. Because it is interesting to know that the age which interests the lender is not that at the time of the subscription of the contract, but that which the borrower will have at the end of his credit. We generally expect 75 years.
The property acquired, whether it is an apartment or a house, then forms part of the heritage. It will be passed on to children upon death. It’s also what people think about when they want to invest.
Finally, there are also other ways of being owners, for example by investing in SCPIs or LMNPs. It is then a question of buying shares of professional rental buildings or investing in new or old real estate, in certain areas to be revitalized, to put the property up for rental.