Real estate has established itself as the preferred investment of the French, especially as a safe harbor against inflation. It offers the opportunity to build assets and increase income thanks to the rents received. Savers often consider buying an investment in real estate, but current regulations greatly limit its profitability. so where invest in real estate in 2024 maximize your returns and increase your purchasing power?
Investing in investment property: an attractive investment or a financial sinkhole?
Buying a building to generate additional income and diversify your assets may seem attractive. Let’s imagine a building bought for €400,000, divided into 4 apartments rented for €400, which generates a monthly income of €1,600 for the investor On paper, this project may seem attractive, but it is not without risks.
Property management can be tedious and stressful due to rental vacancies, unpaid rent, frequent tenant turnover, repairs or renovations that require finding good tradesmen, not to mention fees, taxes and especially the high taxation of land income in France. Not to mention that rent regulation from 2018, which further limits potential returns, especially in some French cities where ceilings are set, warns that non-compliance can result in hefty fines of up to €15,000.
State-imposed energy standards requirements can also significantly reduce profitability investment in rental properties. From August 2022, owners of apartments of categories F and G can no longer increase the rent when the tenant changes. The work required to bring buildings up to standard is often a heavy financial burden, sometimes forcing owners to exhaust their funds or sell their property at a loss, as poorly insulated buildings reduce their value by 5% to 18%, depending on the notaries.
These restrictions come despite rising inflation and rising costs for owners, particularly property tax, which in Paris, for example, has risen by 60% between 2022 and 2023.
Finally invest in capital assets can turn out to be very unprofitable and even turn into a financial pit for the owners. Investments such as income SCPIs can represent real alternatives and allow you to invest in real estate from just a few tens of thousands of euros, without the hassle of management.
Investing in High Yield SCPIs: Optimized Profitability, Delegated Management and Strategic Diversification
Income SCPIs present themselves as an ideal alternative to buying an investment property invest in real estate, see your capital grow over time, take advantage of tax advantages and prepare for retirement. They allow you to invest not in one property but in hundreds in France and Europe and offer savers the benefit of professional management. With annual returns that can be more than 7%, this low-volatility investment has seen its collections surge in recent years.
Let’s take the example of investing €400,000 in SCPI with an average return of 6%: this investment generates around €2,000 per month and allows you to benefit from favorable taxation. An attractive prospect for savers who want to increase their purchasing power and prepare for retirement from 2024.
THE SCPI they also allow savers to target their investments along two main axes by selecting multiple SCPIs. Firstly, by supporting growing sectors such as healthcare, logistics and even trade. Then by prioritizing dynamic geographical areas such as large European metropolises. Many SCPIs also include criteria SRI and ESG in the management of their real estate assets, thereby meeting the environmental expectations of investors. Finally, SCPI offers significant benefits in terms of asset transfer.
Where to invest in the best yielding SCPIs?
THE SCPI yield they are accessible online and do not require management by the saver. They also offer strong asset diversification, provided you benefit from professional advice such as that offered by La Centrale des SCPI, a specialist investment company.
The free platform supports its clients in optimizing their wealth operations and observing with them multi-SCPI portfolios effective. Tailored advice available on the number dedicated to new savers: 01.44.56.00.23. The Centrale des SCPI also offers on its website www.centraledesscpi.com a guide to the best SCPIs, regularly updated rankings, as well as information on the different ways to subscribe.
Finally, yield SCPIs offer a number of advantages for investors who want to avoid hassles, are a relevant alternative to buying an investment property and stand out as the best real estate investments to generate additional income and increase your assets in 2024.