2023-04-29 13:00:00
Building wealth is an important goal for many savers. But with so many options available, it can be difficult to make the right choice. In this article, we highlight some of the most profitable real estate investments.
Equities and real estate in the lead over the long term
According to a study carried out by the Institute for Real Estate and Land Savings (IEIF), stocks and real estate are the most profitable investments over a period of 40 years, between 1982 and 2022. Equities show an average annualized return of 15.1%, while real estate follows with 11.8%. These figures should be compared with an average inflation of 2.1% per year over the same period.
Investing in Civil Real Estate Investment Companies (SCPI)
SCPIs are gaining in popularity with savers. These companies make it possible to invest in real estate without having to buy property directly. They offer great flexibility and have many advantages:
- A simplified management : investors do not have to deal with the management of the assets, which is entrusted to specialized entities.
- And access to a wide range of real estate assets : SCPIs invest in different types of property (offices, shops, housing, etc.) and can diversify their portfolio geographically.
- A pooling of risks : by buying SCPI shares, savers spread their investment over several assets, thus limiting the risks associated with the performance of a single asset.
- Of the regular income : SCPIs generally distribute quarterly or half-yearly dividends, which represent the rents collected by the company.
With an average yield of 4% in 2021, SCPIs appear as an attractive investment for investors wishing to build up a real estate portfolio without assuming the constraints.
Rental investment: still profitable despite the uncertainties
Despite fears of a housing market crash, buy-to-let investment remains an attractive option for savers. In effect, rental demand is sustained in large cities and tense areas, which generates regular income. Tax measures such as the Pinel law encourage investment in new construction, with tax reductions of up to 21% of the purchase price of the property over a period of 12 years.
The keys to a successful rental investment
To maximize the profitability of your rental investment, here are some rules to follow:
- Choose a strategic location : favor areas with strong rental demand (proximity to public transport, schools, shops, etc.) and limited supply.
- Diversify your assets : not limit yourself to a single type of property or location, in order to spread the risks and optimize the potential return.
- Prioritize the quality of housing : a property in good condition and well laid out will attract more solvent tenants and facilitate rental management.
- Optimize taxation : use the tax measures available to reduce its taxation and increase its net profitability.
By following these tips, rental investment can offer attractive long-term returnswhile participating in the constitution of a real estate heritage.
Real estate is an attractive investment for savers looking for diversification with attractive return prospects. Shares and rental investment are options to be considered over the long term, while SCPIs offer a simplified alternative for accessing the real estate market. It is essential to carefully analyze the opportunities and risks associated with each investment, and to take the time to train to maximize your chances of success.
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