2023-12-06 20:00:29
Investing in Real Estate Investment Companies (SCPI) attracts many investors wishing to diversify their assets and benefit from a regular income. However, opt for a short-term investment in SCPI has some major drawbacks, which it is essential to take into account before getting started.
The liquidity of shares: a major obstacle to investment
One of the main disadvantages of short-term investment in SCPI resides in the limited liquidity of its shares. In fact, SCPI shares are not as easily negotiable as those of shares or bonds listed on the stock exchange. Therefore, the rapid sale of these shares may prove difficult, if not impossible, if one is seeking to make a short-term investment.
A slow and uncertain transfer process
Unlike the stock market, where transactions are generally quick and instantaneous, the process of selling SCPI shares can be very long and depend on many external factors, such as the real estate market and purchase demand. It is therefore essential to consider this notion of time and to assess the risks linked to this lack of liquidity before considering an early exit from your investment.
The potentially low return in the short term
Contrary to popular belief, invest in SCPI in the short term does not necessarily guarantee high returns. Indeed, it is important to take into account the costs inherent to this type of investment, which can generate a low net return in the short term.
Costs related to the acquisition of shares
During the’purchase of SCPI shares, several fees are generally added to the initial price, such as entry or management fees, transfer taxes and other commissions. These fees can represent up to 10% of the value of the investment, thus reducing the net return received by the investor in the short term. It is therefore essential to be aware of these additional costs before embarking on a short-term transaction.
Variable income from dividends
Dividends paid by SCPIs are directly derived from the rents received by the company and can therefore vary depending on rental conditions. Thus, if the occupancy of real estate is not optimal over a short period, the income generated by dividends may be less than expected, limiting the profitability of the operation in the short term.
Increased rental risks in the short term
By investing in the short term in SCPIrental risks can be greater, because the investor does not benefit from a diversified real estate portfolio over a sufficiently long period to ensure stable rental income.
The financial occupancy rate (TOF): a key indicator
The TOF represents the ratio between the rents actually received by the SCPI and the theoretical rents in the event of total occupancy. A high rate means that the company is efficient and has occupied real estate, thus guaranteeing a regular income for the investor.
However, in the short term, this rate can be directly impacted by several external factors such as the economic situation or the characteristics of the rental market, leading to a variation in rental income and therefore unfortunately to a higher risk.
The unpredictability of the real estate market
Another disadvantage linked to short-term investment in SCPI concerns the fluctuation of the real estate market. Indeed, over a short period, it is difficult to accurately predict market developments, which can result in a drop in the value of the shares or less attractive rental yields for the investor.
The valuation of shares depends on the real estate market
It should not be forgotten that the sale price of its shares is not guaranteed and is directly influenced by fluctuations in the real estate market. Therefore, reselling shares over a short period exposes you more to the volatility of this market and can lead to a capital loss if the valuation of real estate decreases.
Conclusion: weigh the disadvantages carefully before investing
In summary, it is obvious that short-term investment in SCPI presents several challenges:
Limited liquidity of shares, Increased rental risks, Inherent costs which may limit the net return, The unpredictability of the real estate market.
Before embarking on this type of investment, it is therefore crucial to consider these different elements and to carefully measure the associated risks. In the medium or long term, it appears thata SCPI remains an interesting investment generally offering better prospects in terms of profitability and diversification.
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