The rental investment is the preferred investment of the French, this is explained by its tax advantage as well as the additional income that should not be neglected.
The interest rate on loans is often advantageous for a rental investment, however, to get the most profit for this type of investment, it is important to prepare well beforehand.
Choose the location of your rental investment
The profitability of a rental investment depends on the location of the housing, indeed, to quickly find a tenant and reduce holiday periods.
In fact, apart from the tax exemption, the property purchased must bring money back to the owner, which is why it would be rather interesting to invest in priority in dynamic cities where demand is strong. An analysis of the location is therefore essential before any purchase.
It is better to privilege a loan
Mortgage rates are always great for financing a loan, even if your savings are sufficient. The loan guarantees an exceptional condition, rates for a principal residence are generally higher than those applied for rental investments. Taking a loan has the advantage of saving money. In addition, interest on a rental investment is tax deductible.
The longer the loan, the better
Rental investment depends on the real estate rate, but it also depends on the duration of the repayment. If the duration is short and it is coupled with a very interesting rate, it means that repayment monthly payments will be greater. It is therefore more advantageous to sign a loan for a longer duration and a higher rate.
Repayment payments will then be more adapted to the income and debt ratio, which will give a limit to the amount to repay from its own resources to supplement the rent if it is not covered.
Subscribe to a borrower insurance
A mortgage is obtained under the condition of a subscription to a borrower insurance to cover the loan. Real estate insurance guarantees the bank the recovery of its money in case of disability, disability, loss of employment or death.
For the borrower, the borrower insurance protects him from financial difficulties if an event prevents him from repaying his debt. Depending on the guarantees of the borrower insurance provided in a contract, the insurer will take the relay to repay the remaining capital. Then the real estate will not be seized and subscribe savings will be preserved.