The Pinel investment: More white trades
Have you decided to invest in real estate to rent? Maybe you can take advantage of the Pinel device. What is it about? What about white transactions with the latter? Here's what you need to know about it.
White transaction and Pinel investment: what are they?
Have you ever heard of white deals in real estate? It is in fact a term used by bankers and other professionals to refer to the fact that the rent paid by the tenant (s) makes it possible to repay all the monthly payments of a mortgage loan. We can also say that it is a financial operation to cover expenses without a profit. As for the Pinel device or investment, it is a “rental investment [entitling] to a tax reduction calculated on the purchase price of new or rehabilitated homes to achieve the technical performance of new homes. It concerns the transactions carried out between the 1Er September 2014 And the December 31 2021 ”.The conditions imposed by the Pinel system are multiple.
The independent economic and financial research firm PrimeView conducted a study on Pinel investment and managed to demonstrate its effectiveness. First of all, it brings money to the state (1.65 euros for 1 euro invested, or 1.2 billion euros per year). In addition, no less than 190,000 homes were built and sold in four years. For many investors, without the tax reduction proposed by the Pinel Law, the purchase would not have even been considered. We also learn, with this independent report, that the Pinel system does not only benefit the “rich”. In fact, around 94% of individuals who have invested via a tax system (Pinel included) show a TMI (marginal tax bracket) less than or equal to 30%.
Financing a Pinel investment
Interest rates have been at historic lows for some time now and are not expected to rise quickly. Experts in the banking world as well as in the real estate sector therefore recommend borrowing — for a rental investment — for the longest possible period (20 or even 25 years) and with as few contributions as possible. Why? Because interest rates are deductible from property income and therefore make it possible to reduce taxation from the first years of repayment of the mortgage. To avoid financial problems caused by unforeseen events (rental vacancy, for example), it is best to save a certain amount every month in order to create an emergency reserve.What about white transactions? Nowadays, they are very rare, if not even non-existent. In general, investors have to supplement the rental income with their own money in the amount of, for example, 300-350 euros per month, in order to be able to repay their monthly payments. But, according to financial experts, it is better to put this sum into a rental investment and build up a real estate portfolio of 200,000 euros, for example, rather than putting these 300-350 euros monthly on a passbook that brings little payout.Are you wondering what happens if investors want to make a second Pinel investment when their first transaction is not a blank deal? The bank will first analyze their debt ratio and then it will study their file carefully in order to grant them (or not) a second loan.
Don't go headlong into buying a rental property. If you wish to benefit from the Pinel device, various conditions must be respected as we explained to you previously. You must also pay attention to several elements such as the location of the property, for example, but also the construction projects planned in the area where it is located in the coming years... Also find out about the guarantees that exist in order to secure your project. In particular, there is the GLI, which is the guarantee of unpaid rent. There is also the GFA (financial guarantee of completion). The banking institution then acts as guarantor for the promoter. If the latter goes bankrupt, the bank takes over and the goods will be delivered as planned.
Looking for a property: call in a real estate hunter
Do you want to invest in real estate? Whether it is a Pinel investment or another type of project, entrust your real estate search to a real estate hunter. The latter is an expert in the sector and will be able to find the ideal property corresponding to your wishes, your needs and your budget. The advantages of using a real estate hunter are multiple: saving time, savings... It would therefore be a shame to deprive yourself of the support and expertise of this expert.If you are looking for a property in the Paris region in particular, know that the HOME SELECT team is composed of several hunters. Whatever sector (s) you are or dream of, there is bound to be a member of our team who can help you make your project a reality. Do not hesitate to contact us to find out more about our services and formulas.
