With prices rising 5.8% in June, inflation has become a priority for the French. Inflation reduces the purchasing power of our compatriots, the latter are wondering where to invest their money in order to increase their income. One interesting way to invest money in times of inflation is to buy shares in civil real estate investment companies (SCPI). Is investing in performance indexes during inflation a good solution? This is what we are going to analyze.
Where should you not invest during inflation?
Booklet A currently gives 1% per annum. With inflation rising by 5.8% over the past twelve months, the loss in purchasing power of the savings account has reached 4.8%. That is why it is necessary to keep in your book A a minimum, in this case about two or three months of income, and invest the excess in other, more profitable investments.
- About life insurance contracts in Eurofunds
Life insurance contracts in Eurofunds in 2021 brought their holders only 1.1% on average, which leads to a loss in purchasing power of 4.7%. In addition, life insurance contracts in Eurofunds are not the best way to invest during inflation.
Why invest in real estate during inflation?
- Because rents are indexed to inflation.
Rent indexation for inflation allows real estate investors not to lose purchasing power. Thus, rent indexation is insurance against inflation.
- Because real estate is a solid value
Unlike stocks or bonds, real estate is based on stone, that is, on strength. Stocks and bonds can see their value drop or depreciate very sharply, which is not the case with real estate.
As explained Lionel Benhamuone of the founding partners Central SCPI (www.centraledesscpi.com), the first French digital savings network:
“Customers who call us on 01.44.56.00.23 aware of the risks to their purchasing power. That’s why they choose to invest in SCPI performance to get great returns. »
What are the benefits of investing your money in SCPI during periods of inflation?
- Top Performing SCPIs Earn More Than Inflation
The most effective SCPIs bring in about 6% of net income per year. This productivity allows employees who hold SCPI productivity units not to lose purchasing power, unlike those who hold Livret A savings accounts or euro fund life insurance policies.
- Income SCPIs are pooled savings products.
By investing your money in SCPI stock, you can buy offices, retail space, commercial space, warehouses, health and education-related properties, hotels, and tourism properties.
Profitable SCPIs also offer the opportunity to invest in residential real estate so that you don’t have to depend on a single tenant, as is the case when you have only one rented apartment.
- SCPI yield indices are geographically attractive
Instead of investing in real estate only in France, buying shares of European income SCPI, which are among the best SCPI, you can invest your money in the euro area or in the rest of the European continent.
In addition to broadening the geographic pool, European SCPIs are tax efficient as their dividends are not subject to social security contributions on rents received outside of France.
- Profitable SCPI can be purchased on credit
As with directly owned real estate, you can invest in credit performance. Knowing that interest rates are fixed, the outstanding capital will shrink month by month during inflation.
How to invest in SCPI in times of inflation?
- Consultation with SCPI specialists is required.
Since the price of SCPI shares is the same regardless of the distribution channel, it does not make sense to invest only in profitable SCPI, especially since it is very easy to make a mistake in choosing SCPI.
Some contributors feel that it is sufficient to read all SCPI annual reports as well as all newsletters and run SCPI simulations. However, it is impossible to read all this documentation for individuals and run several hundred simulations, as SCPI specialists do.
- You must go through Central SCPI
Central SCPI (www.centraledesscpi.com/ 01.44.56.00.23) is the first SCPI comparator on the market and the inventor of SCPI-SIGN, an electronic signature software for buying SCPI shares online.
As noted Laurent Fagesmanager inside Central SCPI :
“In addition to the free services we provide to our clients, we are fully equipped to create bespoke SCPI portfolios for our clients ranging from a few thousand euros to several million euros. »
Inflation affects all French people, especially the most modest ones. As prices continue to rise over the next few quarters, we must take the initiative to avoid this. Performance indexes are the best investments during an inflation period, you should not hesitate to invest about 20% of your assets in them.
However, in order not to make a mistake in choosing the OIR, the easiest way is to seek advice from the specialists of the OIR, for example, Central SCPI (www.centraledesscpi.com/ 01.44.56.00.23), the leading website for the distribution of SCPI shares on the Internet.
Inflation and purchasing power are incompatible. Therefore, you should not place money for booklet A and for a life insurance contract in eurofunds. It is necessary to give preference to the return purchase of SCP as the best means of preserving and increasing its purchasing power.
An investment in SCPI is not guaranteed either in terms of dividends received or in terms of capital preservation. SCPIs depend on fluctuations in real estate markets.
Before making a decision to buy SCPI stock, seek professional advice to ensure that this investment is in line with your asset profile.
Finally, as with any real estate investment, consider the fact that SCPIs are long term investments with a minimum holding period of eight years.
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