- The profitability of a rental real estate investment
- Real estate investments: invest in the old to renovate
- Real Estate Investments: Commercial Premises
In an uncertain economic context, real estate investments seem to have evolved and there is now a certain lack of interest among investors for rental housing. Is rental real estate still profitable? To discover in this article: housing to renovate, businesses and offices... the new real estate investments that are popular.
Real estate investments
The profitability of a rental real estate investment
Rising real estate prices, stagnant rents and rising taxes... investing in a rental property seems less profitable today than it was 10 years ago.
Current yield: the example of a property worth € 200,000 with a gross rental income of 6%.
Deduction of management fees (~ 8% of annual rents) + deduction of expenses, taxes and social security contributions = estimated net yield between 1.85% and 3.23% *
For a profitable investment, housing must be carefully selectedi (type of property, purchase price, housing location...).
Think also about new tax schemes that allow for various tax cuts.
* Excluding any work, periods of rental vacancy, ISF...
Real estate investments: invest in the old to renovate
Invest in the old to renovate is part of the "smart" real estate investments which allow beautiful returns, since:
- the former is cheaper;
- the offer in the old is larger than in the new;
- housing is often located in the city center and can be rented more easily.
A rental operation well conducted in the former and allows a gross yield of 4 to 6%.
Moreover, to carry out works in this type of well to create a "land deficit"allowing a tax deduction on rental income, up to € 10,700 (during the year of implementation of the renovation).
Real Estate Investments: Commercial Premises
Investing in offices for professional use or in commercial premises allows a gross return of 5 à 7%. In addition, many expenses are here borne by the tenant.
However, it is again appropriate to properly select his property (target the very commercial sectors, check the proper service desks, the amount of charges...)
- 30% reduction on rental income in the case of a microfinance scheme (annual rents below € 15,000)
- a large part of the expenses can be deducted in the event of annual rental income exceeding € 15,000 (subject to the real tax regime).