Many individuals are searching these days investment solutions to secure their financial future or optimize the management of your assets. Among the various existing options Civil real estate investment companies (SCPI) they stand out for their profitability potential and availability. But what about seniors? It is investment which meets their specific needs and limitations? In this article, we will explore this question through analysis pros and cons of SCPI for seniors.
Understanding how SCPIs work
To fully understand whether SCPIs are a suitable investment solution for older people, it is first necessary to understand their mechanism. SCPI are companies whose objective is to acquire and manage a portfolio of professional properties (offices, shops, warehouses, etc.). The idea is simple: the investor buys shares in these companies and thus becomes a partner who benefits from rental income from mining properties held by SCPI.
The principle of risk pooling
SCPI’s main interest lies in in pooling the risks they enable. Instead of investing in his own real estate, the saver entrusts his money to a company that is responsible for diversifying real estate purchases. In this way, the risks are diluted and the overall profitability is generally more stable than in the context of a traditional rental investment.
SCPI benefits for seniors
In the specific context of the elderly, certain characteristics of the SCPI deserve emphasis. We have identified several main advantages:
- Favorable taxation : SCPI income may be subject to income tax under common law conditions or may benefit from the capital gains tax regime. If they opt for the second scheme, the elderly can benefit from special deductions linked to co-ownership fees and work carried out by SCPI (co-owners).
- Regular pension: SCPIs offer regular profitability thanks to the rents collected by the management companies. This supplemental source of income can be especially suitable for seniors looking for financial security during retirement.
- simplicity: Investing in SCPI is simple because you are not directly managing the related assets. The saver does not have to deal with issues related to rent, work or even outstanding debts. This simplicity makes this investment particularly attractive to older people who want to avoid administrative restrictions and fully enjoy their retirement.
- Transmission: SCPI shares can be transferred to descendants like any other financial asset. It is possible to donate or even dismember property and offer such interesting solutions as to predict the transfer of property to heirs.
Disadvantages of SCPI for seniors
Despite the many advantages, SCPIs also have some disadvantages that are important to highlight in the case of the elderly:
- Reduced liquidity: SCPI shares may take some time to sell depending on market conditions property. It is therefore rather a long-term investment, which is not suitable for savers looking for quick liquidity.
- Risk of capital loss: Like any stock market investment, you can lose money with SCPI if the value of the stock crashes. However, this risk is generally well controlled through real estate asset diversification and risk pooling.
- Admission : Acquisition costs for SCPI shares can be up to 10% of the invested amount, reducing the net profitability of the investment. These fees are a potential barrier for older people who want to invest large sums.
Which SCPI to choose for an elderly person?
Among the many existing SCPIs, some are more tailored to the needs and limitations of seniors than others. It is advisable to choose a recognized management company and give preference to SCPI, which have proven their reliability and durability over the long term. SCPIs investing in healthcare real estate (clinics, nursing homes, etc.) or housing for the elderly may also represent an interesting alternative to respond to specific age-related challenges.
Call a wealth management consultant
Faced with various investment options in SCPI and to better understand the preferences and expectations specific to seniors, it is strongly recommended to call a professional. A wealth management advisor will be able to examine the senior’s financial situation, goals and priorities and propose personalized investment solutions based on these parameters.