10 tips for a successful rental investment
In 2018, 13% of French people would like to invest in real estate compared to 7% in 2017. This is the conclusion of the survey conducted by Empruntis. But embarking on a real estate investment and more particularly in a rental investment is a decision that is not taken lightly, follow our various tips.
Tip #1: buy well
This may seem like an obvious piece of advice, but sometimes people don't buy well. To buy well, multiple criteria must be taken into account: the selling price of the property; its location; its general condition; its qualities and defects...
Tip #2: Define your target well
Is this your first rental investment? Depending on your borrowing capacity, you can choose between a studio or an F2. The important thing is to make a consistent choice based on the type of tenants you are targeting. If you want to rent to students, investing in a supermarket may not be the best strategy unless you want to offer shared rooms.Surface is not the only factor to take into account in order to attract the tenants you are targeting. The location of the property is also important (near universities and other high schools, near business areas...).
Tip #3: choose your tax system carefully
Investing in stone also means paying attention to taxation. The taxation of rental income and the allowances and deductions from which it is possible to benefit vary according to various criteria. It is therefore essential to ask yourself various questions such as: is it better to buy a new or old property or is it better to offer a furnished or bare rental?
Tip #4: Invest in the right sector
Investing in your neighborhood or even in your city? This can be a good idea since you know the industry well. However, you can be sure that it is an attractive area for tenants. Proximity is a good point, but if you cannot find tenant (s), your investment will not be profitable at all. We therefore advise you to ask yourself the following questions: do you want the property to be occupied as much as possible with, in return, a lower risk of profitability? or do you want a property that is less busy, but with maximum profitability? In the first case, the ideal is to opt for a property in the city center or in large agglomerations. In the second case, neighborhoods in reconversion and provincial cities and villages are to be preferred even if you may be forced to review your rents downwards.
Tip #5: Search, visit, but make few offers
When looking for a property for a rental investment, it is advisable to spend time doing the research (web, agencies...) and to make numerous visits (nothing better than seeing a property with your own eyes). On the other hand, we recommend that you make few offers. For example, just make one for a property that you really fell in love with.
Tip #6: Learn about condominiums
If you decide to buy an apartment located in a building whose ownership is distributed between several people (condominium), pay attention to what this implies. The profitability of your investment may in particular be impacted by condominium work (upgrading to standards, roofing, etc.). So find out about the condition of the building and the common areas and not only about the condition of the property.
Tip #7: Surround yourself well
Investing in stone cannot be improvised and we advise you not to embark on this adventure alone. Surround yourself with qualified people who will accompany you and advise you in order to help you succeed in your rental investment. Hiring a real estate hunter to find a property, for example, is a very good idea since he will keep in mind that it is a rental investment, and will thus be careful to find an apartment/house that will allow you to succeed in your project.
Tip #8: Invest smartly
The issue of financing requires thought and caution. Before making an offer, check your borrowing capacity. In addition, be careful that your rental investment is not the centrepiece of your assets. You may decide to develop other projects in the future. Also remember to calculate the profitability of your investment: for example, if it is less than 6% net, it is questionable.
Tip #9: Set a consistent rent
Asking for a high rent when the characteristics of the property and its location do not justify it? You guessed it, it's not a good idea. Likewise, a rent that is too low will not allow you to earn money from your investment. It is essential to offer a fair rent in line with the services of the property, but also with the real estate market in the neighborhood, city or others.
Tip #10: manage your investment well
Poor management of your rental investment can completely destroy your project even if you followed the previous advice and made a good purchase. The ideal is to entrust the management to an expert, but this has a cost that must therefore be included in the initial budget. Do you want to make a rental investment? Contact HOME SELECT to find the ideal property in the Paris region.
