Posted on 19 September 2020
The property market confirms its reliability
In 2020, the health crisis has damaged the economy and stock prices.
Investments have fallen and the return on savings is not as expected. On the other hand, the property market does not fail and remains a reliable investment.
SWhile it seems impossible to attribute profitability to a single investment category, the property market has the definite advantage of being stable. Of course, prices fluctuate, interest rates fluctuate even if they are currently historically low - but the demand for housing is constantly increasing and the property market has the advantage of being tangible and sustainable. It can provide tax benefits, receive additional income or be partially financed by tenants. It is also one of the few investments that facilitate the transmission of his assets to his children. So many assets that justify thinking about overseas properties as a sensible investment, especially on the new-build market, whether bought outright or as Leasebacks.
TOP 5 advantages of new property investment
Financing the property
French Mortgages, a leveraged financing, is one of the assets of a property investment. This type of investment can be carried out with little or no personal funds. Thus, you can invest without having the entire amount at your disposal while deducting the interests of the loan from the rental income. Result: a reduction in your property income and in your taxes on the rents you receive is guaranteed! Without forgetting that while the notary's fees (French Legal fees) in the resale property market are around 7%, the new-build property market divides the bill by 4, i.e. 2.5% of the purchase price. A major advantage decided by the Government to encourage investors to favour the new-build market to best fill the housing deficit.
Depending on the new property selected, you may be eligible for various tax exemptions, such as the Pinel Law for example. Whether it is a classic co-ownership or a Leaseback apartment, the LMNP status is one of the measures allowing you to receive additional income and consolidate your assets.
A low-risk investment
With fluctuations that are less volatile and violent than the stock market, rental property management is still one of the most reliable investments. It is important to know that a property always maintains a minimum value and the demand, for demographic and societal reasons, is increasing.
A secure investment
Between all building guarantees specific to the new-build market (such as the ten-year building guarantee) and rental guarantees (unpaid rent insurance), investing in properties is a secure investment for the investor. In addition, the modern services provided with all the comfort and the energy savings induced by the ecological standards in force, make your new property for rent a privileged offer compared to those in the old one.5A creation and transmission of heritage.
A creation and transmission of heritage
There is no doubt that bricks and motar remains the most comfortable and economical way to pass on a heritage to one's children. Often preserved over the long term with this in mind, this "inheritance" is framed by various processes to facilitate this succession, such as the creation of a SCI (family property Limited company).
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photo credits ©Studio Bergoend