How to finance your investment – Le Revenu

If you don’t have enough liquidity, a loan is a must for a rental property investment. Whether you’re buying new or old housing or non-residential premises, tax-exempt or not, here’s our advice on getting the best property loan.

Amortizable loan or finally

Logic dictates that rent pays back capital and interest. Loan finally (repaying the capital at the end) is justified if you are receiving other income from the property to charge interest on the new property loan, reduce your taxes and increase rental profitability. Please note that with an MFI, the taxpayer can no longer deduct the remaining capital each year. To calculate the deductible part, it is necessary to carry out theoretical linear amortization for the duration of the loan. Regardless of the type of loan (amortizing or finally) or goods (new or old, under Pinel’s law or not), loan fees (interest, administrative and warranty fees, insurance) are deductible from property income.

Interest rate: 0.1 to 0.2 points more than a classic loan

Rates for investment rental properties are as low as rates provided for the purchase of residential housing. In some banks there can be a difference of 0.10 points which disappears on good files.

Today, a household gets a rate of 0.7% for seven years by presenting proof of income of €80,000 and a traditional contribution of 10% of the transaction amount, including notary and guarantee fees. In fifteen years, the rate increases to 1.10%. No need to tighten your belt for faster repayment.

There is no difference in rates between new (in Pinel, for example) and old but assembly. Before you receive the rent and tax the cost of the loan, the organizers will request the funds several times until delivery. In the case of partial deferment (paying interest without capital amortization) or full deferment (you only pay the borrower’s insurance), the bill increases. For a €250,000 transaction financed at 2%, a delay in the payment of ongoing interest for eighteen months will cost you around €4,300. If you already have income from the property, make interest payments from the beginning.

Credit insurance: you can save on certain guarantees

With a hire-purchase loan, your cover is often limited to the risk of death and complete and irreversible loss of autonomy (DC-PTIA). Create competition for your insurance policies by forcing banks to accept a policy other than theirs. From 1ahem From January 2018, the borrower’s insurance can be canceled annually for all ordinary credits provided the new insurance offers equivalent guarantees.

Indebtedness rate: only 70% of rents are taken into account

The repayment of the mortgage loan may not exceed a third of the monthly income borrower, but this ratio increases for the wealthiest clients. Generally, expected operating rents are included up to 70% of your income. A degree of caution in the face of possible contingencies: unpaid bills, work, etc. Plead your case to several establishments, as their criteria differ. further compare loan modulations and negotiate the absence of early repayment compensation.

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