Real estate is a choice for the future that allows you to gradually create a strong and lasting legacy that will serve you in the long run as an addition to your pension or as capital to protect and help your family. However, it should be remembered that investing in a rental is very different from buying a main residence. Who says rent, says the tenant, tax and management. The good news is that there are systems in place that allow you to access tax benefits such as non-professional furniture rental company (LMNP) status. Let’s look at this type of investment. by using four ideas received!
1. “Investing in rental housing will increase my taxes”
True and false as it will depend on your choice of investment. As proof, investing in a property with LMNP (non-professional furnished rental company) status delivers a double whammy:
- Create a legacy for yourself and your descendants.
- Save Tax:
- Or by exempting your rental income from taxes thanks to the “simplified real” regime, also called classic LMNP. This system allows you to deduct almost all expenses incurred during the year from rental income, as well as depreciate property and furniture. An accumulation capable of erasing the tax on your rent collected over the years.
- Or get a tax discount up to 33,000 euros. How ? Thanks to the Sensi-Bouvard law, which allows you to receive tax savings equivalent to 11% of the amount, excluding VAT on your investment, on any purchase of a new residence with services for students or seniors, managed by a professional operator and eligible for this status (no more than 300,000 euros).
2. “Investing in real estate is profitable only after the loan is repaid”
False. Investing in LMNP-eligible properties (such as student and senior residences) is beneficial post-acquisition. How ? With a 20% VAT refund on the purchase price of your new furnished property, a tax reduction of up to €33,000, or the possibility of net-tax rental income.
3. “Renting a property requires a lot of time in terms of maintenance and management”
True. However, by investing in a managed residence, you entrust its management to the managing operator. It is the latter who will take care of everything related to the rental of your investment on a daily basis: choosing a tenant, collecting rent, performing small and large works …
Good to know
Managed residences are for very specific populations (senior people, students, etc.). Therefore, your peace of mind, as well as the good profitability and long-term sustainability of your investment, will depend on the operator you choose. By choosing a professional expert in these markets, you will have access to quality products that are sustainable over time and in line with real social trends. For good reason, investing in a nursing home represents a powerful gesture that will enable society to best cope with the aging of its population. You will also have nothing to manage, and you will receive individual support.
4. “Investing in a managed home is not as profitable as life insurance”
False. By investing in a managed residence like Réside Études, you can earn up to 3.90% before tax/tax(1). In addition, signing a long-term rental agreement with an operator gives you real information about your next rental income. Conversely, life insurance guarantees you a random rate of return – depending on the fluctuations of the markets in which you will invest. For example, in 2019 the average rate paid to savers was 1.46%(2) compared to 1.30%(3) in 2020 and 2021.
- The rate proposed as of 01/06/2022 for the amount of real estate excluding VAT of the investment, in accordance with the commercial lease proposed by the manager and in accordance with the available stocks.
Content created in collaboration with Réside Études. No BFMTV editorial staff contributed to this content.