Investing in real estate : your life-saving checklist

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Are you thinking about investing in real estate in France but not sure where to start? To get your project off the ground with a clear idea of where you are heading, here are the answers to the three main questions all future investors ask themselves!

Is it better to invest in an old apartment or a new build?

If “classic” investors sometimes find it hard to choose between buying an old apartment and an off-plan one, the answer to the question is much simpler for an expat. As a non-resident, you are not entitled to take advantage of the Duflot, Pinel and Scellier schemes. Thus, new programmes which at first sight may seem really interesting in tax terms are, in fact, not at all geared towards expats.

It is better, therefore, to opt for old apartments and take advantage of the only two measures which enable non-residents to reduce their tax bill: the status of non-professional furnished property lessor, and real estate deficit.

You may be interested in reading this article : Expats : Why it’s better to invest in an older property

Is it better to invest in Paris or elsewhere in France?

To ensure the success of your buy-to-let, it is important to invest in a city where rental property is in strong demand. It is, in fact, in those cities where you will be able to obtain high rents without rental voids posing too much of a risk. In that respect, Paris is obviously an excellent choice. What’s more, with demographic pressure a constant in the capital, there is virtually no risk of the value of the apartment you invest in dropping at any point in the future.

You should also be aware that it is smaller apartments which offer the highest yields. You should put your money on student cities and major business districts where bedsit and one-bedroom type apartments are highly sought after. Outside of Paris, the other fast-developing cities like Bordeaux and Lyon, are also very good options.

Is it better to pay cash or take out a mortgage?

If you can take out a mortgage to finance your buy-to-let project, do not hesitate for a second! With the very low borrowing rates French banks are offering at the moment, you have the opportunity to build up a portfolio with next to no effort. Thanks to the leverage effect and the rent paid by your tenant covering monthly repayments, you become an apartment owner for minimum outlay.