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IStock / City Presse

Considered a more secure investment than financial investments, the stone has always been popular with the French.

It is a good way to build up a heritage that you can sell to carry out your projects or bequeath to your children.

And if you rent this home, you can earn income.

Provided, however, that you have done your calculations correctly ...

Knowing how to buy at the right price

The first pitfall for buyers is to misjudge the intrinsic value of their property.

Because if the price per square meter obviously matters at the time of writing the check, it is clearly not sufficient to determine whether this acquisition is worth it or not.

Whether you buy a home to live in yourself or to rent it out, it's location that counts first.

Is the neighborhood developing?

Are there local shops, a school and public transport?

Is the delinquency rate there low?

These are the type of external factors that will influence the value of your future property in the medium and long term.

The factors internal to this dwelling must then be added to the balance.

What is the level of charges to be expected?

Is the residence aging, knowing that this will necessarily involve future work?

These parameters are essential since they will impact your profitability.

Have a long term goal

A real estate investment supposes having a long-term vision.

It is therefore a question of making the share between the rents that you will collect and the potential of capital gain of the property for resale.

It is better, for example, to have a low margin for a few years in return for a substantial sum during the sale, rather than getting carried away for a home that will be very profitable in the early days before becoming a burden for lack of finding tenants. or buyers.

Many owners are thus attracted by real estate programs made attractive by government tax exemption systems, before discovering, too late, that they were built in regions that are not very dynamic.

While the benefit of a tax advantage is obviously a plus, it should therefore never dictate an acquisition.

The risk calculation also applies to the choice of the type of property.

While small areas generally earn more,

turnover

is frequent there, resulting in a danger of vacant rentals, while large areas are less profitable per square meter but attract more stable families.

To your calculators

Once all these qualitative data in mind, we must move on to mathematical calculation.

And beware of real estate sirens showing a profitability of 8% per year.

Ads extolling the merits of a particular real estate purchase most often put forward the gross profitability of the property.

This is then a basic equation which only takes into account the amount of annual rents compared to the purchase price of the home.

In order to determine what will actually end up in your pocket, you need to calculate the net return on your investment.

And to do this, you must subtract from these rents all the costs, charges (recurring and exceptional) and taxes (property tax, social security contributions and impact on your income tax) related to the property.

To give you an idea, specialists estimate that the net profitability of such an investment varies between 2 and 7%.

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  • House

  • Apartment

  • Rental

  • Investment

  • Immovable