Premier investissement dans l'immobilier locatif

Current trends in the real estate market have finally convinced investors to invest in stone. However, making an initial investment in rental property requires careful thought and, above all, a minimum level of knowledge in the field of real estate. The location of the property, the health of the market, the type of property (studio, T2, investment property ...), the tax system and the financing system are among the links to be known. If necessary, as this is your first major investment, the assistance of a professional agency can be of undeniable help in the management of your project. You will thus avoid making the wrong investment, which could be catastrophic for the rest of the operations.

Define the characteristics of the propertyin which to invest

Real estate is one of the sectors that is always in good shape, even in times of crisis. The purchase of a property remains an income-generating operation, in the medium or long term, for any investor who invests his money in it. However, this profitability must meet a certain strategy, to ensure that you put the right price in your acquisition. With this in mind, you should then dig as deep as possible to select the best opportunities to put yourfirst investment in rental real estate on the right track. The selection of the property depends above all on a few criteria.

Rental real estate investment ina strategic city

In this context, the determination of the location of the rental property is the first success factor for your first rental investment. France has a vast real estate stock, however, you must choose wisely so as not to fall into a loss-making investment. The best advice that any specialized real estate agency will give you is to choose a large city over a smaller town. The reason is simple, the more demand and amenities there are, the better the rental profit. Cities such as Paris remain a clear path not to be overlooked, even if the prices on the real estate market are high at the time of acquisition. However, you can expect a minimum return of 2.5%, and in the best of cases, you can reach up to 5% for districts qualified as strategic, served by numerous means of communication and various metro stations. A student city like Lille or Lyon can also bring you a big return, if you can invest in a real estate investment to be transformed into a studio or apartment for students.

To ensure your selection, don't hesitate to take the time to analyze the real estate market trends in your target neighbourhood. Alone or with the help of an agency, you can start by studying the health of real estate in the region or city in particular. Confirm that demand is far greater than supply, and that each home you want to buy can be a profitable asset. If in the long run you want to move there and use it as your main residence, or if you are thinking of renting it out for an unlimited period of time, you should choose a city that offers the type of property that meets this need. The operation must remain in compliance with the law. 

Moreover, as this is a first rental property investment, do not hesitate to analyse, spend time and think before committing to a bank loan. Depending on where you choose to invest, make sure that the market corresponds to your rental project and, above all, to the type of clientele you are targeting.

Investment in rental property in the old

To make your first rental investment in the old one, certain constraints can sometimes prove to be insurmountable. To give you every chance of success, having an agency specialising in this sector accompany you could be a brilliant idea. 

Whether it is a small studio apartment or an entire building, old properties are generally acquired at a low price depending on their condition. The profitability will be much more interesting compared to a newly built residence, up to 12% in large cities or its immediate outskirts.

However, the picture will not be rosy in its entirety, as there are some points worth reflecting on, and the role of a specialist agency is to provide you with advice and good management in this regard. First of all, by buying an old building, you are complying with the obligation to carry out improvements, which can range from a simple refurbishment to a total renovation of the property. In any case, you will not be able to introduce a tenant immediately, you will only be able to put your property on the market when all the standards required by law have been validated. This specific aspect must also be taken into account, so that you do not end up in a dead-end street. Indeed, some older buildings may be governed by specific legislation. The law may, for example, require a total refurbishment of this family of residences, without you being able to make any changes, even for the sake of well-being. Your rental investment maythen be blocked.

Select your type of rental property

Depending on their financial capacity, investors can opt to purchase different models of property. Rental can be immediate or depend on a deadline for the execution of work. However, to save time and ensure acceptable profitability, the solution of placing the money in a large city is already a first step. Next, the selection of the neighbourhood and the target tenant are also important. Once you have these data in mind, you can consider the question of which model of residence to buy for your project. Essentially, you can base your decision on the following possibilities.

• The advantages of a small rental space

If you wish to directly access a place of residence for your first rental property investment, you can find your happiness in the small areas dating back several years. New is not a bad choice, only, you will earn more in terms of profits with old. Indeed, the cost will always be much cheaper compared to a new residence. In general, this difference is 20 to 30% less in favour of an old studio property, regardless of the city. By buying a studio apartment at a reduced cost, you can hope to obtain a rental return of up to 5%, after having carried out some improvements to restore it. Indeed, after a refurbishment, you can rent it out at the normal market price, sometimes approaching or exceeding that of a more recent home. Your income will thus be more substantial.

If your decision for your first rental real estate investment is for a studio or several small rooms such as maids' rooms, you place yourself in a clear market segment, which is that of students. For your rental project to be profitable, you must imperatively choose a student city. Paris, Lille, Lyon, but also peripherals such as Créteil, for example, are favourable sites. The demand for student rooms far outstrips the supply, so you can allow yourself a good flow of business. Nevertheless, it is important to know that small areas are more prone to vacations, and therefore to possible works from one tenant to another.

• The strong points of a real estate apartment or a house

If you prefer to secure your first rental property investment and ensure that you collect rent regularly, the choice of a house or apartment that is already several years old is the category of housing to acquire. Like the studio or maid's room, prices are generally lower, and doing some work on the renovation will allow you to make gains. In addition, depending on the tax regime in which you register, you can benefit from several advantages ranging from a tax reduction at an attractive rate, to the possibility of exemption on certain charges.

On the other hand, you have the advantage of benefiting from sustainable revenues that can be counted on for a minimum of three years depending on the lease contract, and often more when you manage to retain your tenants. Indeed, in an industrial or densely populated city, this style of housing is the best choice for working families living on the premises. The proximity of amenities, such as a metro station or train station, but also the existence of several bus lines are a major asset to help families settle down. This situation works in your favour, allowing you to secure a fixed monthly income. Even if the return on investment is much slower than for small areas, you gain on a practical level, by having a property that is always occupied. The obligations of finding tenants are therefore much less burdensome in relation to the studio, which requires this operation about once a year.

• Interest on an investment property investment

In real estate, the larger your investment, the more you can expect to earn in the long run. This assumption is only true if you meet all the required conditions. With the support of an agency, if you have the necessary funds at your disposal, you can opt for the appropriation of a rental property for your first rental investment. This family of buildings is a whole building in which you plan to modify all the rooms to transform them floor by floor, into several bedrooms or studios, or into a T3 apartment. It all depends on the city in which you place your investment, and the type of tenant you are expecting. 

This last investment choice remains the most interesting if you give yourself the means, but you must orient your renovations towards your target clientele. If you are in a student neighbourhood, studios will be a priority. In an industrial or administrative zone, opt for apartments that may be of interest to couples of young executives or families with one or two children. But in any case, you will gain visibility if you manage to create a parking lot near your building.

The market prices for this housing family thus ensure you a rental yield of up to 12%, if you manage to target the right tenant for the type of property you are renting out. In a large city, this type of investment remains easier to operate compared to a more rural area.

Determine your type of investment

A real estate investment remains the most interesting as you decide from the beginning what you want to invest in. Therefore, to give you the best chances in the purchase and implementation of a real estate project, do not hesitate to seek the assistance of a specialized agency, especially if it is your first rental investment. You will thus avoid multiplying the false steps likely to undermine the smooth running of your real estate project. There are three possible scenarios: You can invest to build up your assets; you can invest with the aim of finding profitability, before selling it at term for a capital gain; you can also invest with the aim of finding profitability in a permanent rental.

• The constitution of a patrimony

Your rental investment project consists in choosing a property of a rather patrimonial type. In this context, buildings with several years on the meter will ensure you the best benefits. By obtaining it at a low purchase price, you can benefit from certain tax advantages but also in relation to the work to be carried out, which ensures you a rent aligned with the normal market price. You thus obtain a source of income likely to satisfy a good part of your schedule. Moreover, making a property rental investment also allows you to pass on your assets to your descendants, if you so decide.   

• The objective of a resale

The principle of this category of real estate investment is based primarily on the careful selection of location and type of tenant. When you buy a building in the old one, you normally have several options to achieve profitability as quickly as possible. For example, you can opt for a simple refurbishment, or a total conversion, depending on the property you have just acquired. The market study must then be carried out carefully, and the agency intervenes at this level to direct you towards the best niches. By choosing a city like Paris, you have an interesting outlet for the success of your project. Other large cities in France also offer the same possibilities, however you must study each specific market and follow the trend before deciding to move on to resale. Target the best rental opportunities in the meantime, as you should bear in mind that you will normally have to use up your credit before moving on to this final stage. You will then have a property free of any financial burden and benefiting from a substantial capital gain.

• The search for permanent profitability

This option is generally the ideal decision for a first rental investment. With the assistance of a professional agency, you will be able to carry out the various operations for the marketing of your home. After the search for the property, the purchase and the refurbishment, it will also help you with the furnishings, the decoration and for the advertisement, the rent setting, and the selection of the tenant. The only mission that is entirely your responsibility will generally be the repayment of the loan, according to the duration and the rate for which it was granted to you.

• The choice of taxation

The last step in completing the data in order to complete your application for financing from a bank or financial institution concerns the determination of the taxation that will be most advantageous to you. As far as old property is concerned, completing the refurbishment work by opting for the LMNP scheme (Non Professional Furnished Rental), this scheme represents a good option. Indeed, in addition to the various tax reductions and subsidies you can benefit from, the provision of a furnished apartment or house always ensures you a better rental income. Indeed, rents are always higher, and this type of offer meets the needs of mosttenants.

Set upyour banking file

Once you have gathered all the data relating to your first rental property investment, you can proceed with the final operation: the preparation of your business plan, to be submitted to a banking institution or a financing organisation. Here again, the assistance of a specialised agency can save you a lot of trouble. As it is familiar with the trends in the property market in which you are making your rental investment, it will know how to put forward the necessary arguments to support your application for credit. It will also be able to complete the list of documents and elements necessary to set up a banking file. Advice will also be given to you on the best selection of contract, in particular on the details of the property loan: the amount to be requested for the purchase and the works, the nature of the financing to be applied for, the negotiation of the rate, but especially the duration of the credit. For information, the longer the monthly payments, the more you will gain in terms of rental income. In short, to ensure that your first rental property investment is profitable, contact a professional agency.