Investing in stone is a safe bet. And it is not the 80% of French people aspiring to become owners who will say the opposite. An investment in rental real estate in particular is more than advantageous. The other side of the coin:it also presents risks and limits, to be taken into account before starting. We take stock of this.
At the time, considering investing in rental real estate seems like a great idea. It has to be said. Owning a property has many advantages. This is a way to secure an income for the future. At a time when retirees' incomes continue to plunge, receiving rent will help maintain a certain purchasing power. Certainly, there are many other types of investments that it is possible to consider except that many of them generate unpredictable and infrequent returns.
On the other hand, rental investment promotes the creation of a heritage that you can pass on to your descendants. You give them the opportunity to guarantee their future already.
To all this is added the ownership of a property in which you can live later, when it is no longer rented. You always have the assurance of having a roof over your head, no matter what difficulties you may encounter in life.
Beyond all these elements, the biggest argument in favor of real estate investment concerns the possibility of debt financing. This is not the case with other financial investments. You will then repay the loan through the rents you receive.
Last strong point:lower your taxes by investing in real estate. The State offers many tax exemption schemes to encourage individuals to embark on this path and with a view to revitalizing the real estate market. These tax benefits are available on condition that the obligations imposed (amount to invest, duration of rental, rent limitation, etc.) are respected.
At first glance, everything seems to be in favor of investing in rental real estate. Except that certain shadows come to blacken the picture and not to take them into consideration constitutes a big risk. At the top of these disadvantages is the non-collection of rental income. The whole point of such an investment is to manage to generate rent every month which will make it possible to repay the credit. However, in the event of rental vacancies, losses are inevitable. Depending on the location, finding tenants can sometimes be very difficult. Another major risk:non-payment or late rent. Before accepting a tenant, make sure by all means that the latter is really solvent. Also, keep in mind the illiquid nature of real estate. If your goal is to earn profits very quickly, go your way, this mode of investment is not for you, because it operates over the long term. As this is not a cash investment, time will be required in the event of a possible resale.
