what you need to know before investing

SCPI is a company whose purpose is to provide real estate portfolio management. To do this, he has the capital belonging to the shareholders, with which he will invest in real estate and which he will manage. The structure is responsible for market research, search for objects for purchase, property management, accounting for the purpose of transferring investment income (rental income, capital gains). Before embarking on this type of investment, it is necessary to know the different types of SCPI, list its investment objectives, and seek professional support.

What type of SCPI should you invest in?

There are three types of SCPI. First, productive SCPIs invest primarily in real estate for professional use. As a rule, they diversify purchases in different areas of activity and in different types of buildings (offices, shops, warehouses, factories, etc.). Tax SCPIs then make a profit by investing in the construction or renovation of residential properties. On the other hand, SCPI capital gains rely on the appreciation of buildings in the market to achieve significant capital gains on exit. In this case, management companies will bet on real estate with high appraisal potential.

Should you choose SCPI with fixed or variable capital?

This is one of the questions many investors ask themselves. SCPIs with fixed capital cannot accept new investments after all shares of the company’s capital have been bought out. If a shareholder wants to join SCPI or buy more shares, he must wait for the investors to sell their shares. Capital increases can only take place under very strict conditions. SCPI with variable capital can open its capital to investors at any time.

What are my priority investment goals?

When investors ask themselves how to choose the best SCPIs to invest in, they are often asked this question in response. Indeed, as we have just seen, there are different types of SCPIbut there are different types of investors. They have different investment goals. Some want to get a source of additional income in a more or less long term. Others would like to gradually increase the value of their capital. Finally, some people are willing to tax a portion of their income and find SCPI easy way to invest in real estate while taking advantage of tax incentives. In addition, the choice of SCPI is also made taking into account the amount that needs to be invested at the start. What is its amount? Is it a share capital or will the purchase of shares be financed by a bank loan? All of these questions will help determine which SCPI is best for investing.

Surround yourself with the right professionals

If you do not have any knowledge of real estate or finance, it is preferable to contact consultants specialized in SCPI investments in order to benefit from real experience in these areas (real estate, law, finance, taxation, accounting, law, etc.). These professionals support their clients at all stages of their steps to invest in SCPI and let them find the type of investment that best suits their needs.

Read also our guide How to invest in SCPI in 2022?

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