RENTAL INVESTMENT: WHY TO CALL A BROKER?



RENTAL INVESTMENT: WHY TO CALL A BROKER
Two things are essential to a successful rental real estate investment: choose a good location and find good financing. If the broker is not necessarily empowered to guide you on the first, it is definitely the interlocutor you need to optimize the second! However, this research concerns absolutely all investors, even the most affluent profiles ...

THE FINANCING OF THE REAL ESTATE PROJECT
Most of the time, the rental investment is concretized by bank financing - especially for investors benefiting from equity: whatever the profile of the borrower, he must be able to take advantage of the famous "leverage effect"! In other words, increase your wealth with the money of the bank!

For example, a real estate project of 300,000 € with an annual gross rent of 17,000 € has a gross rental yield of 5.66% (annual rent / investment amount x 100):

If the investor makes no request for financing on this project, he will avoid the bank charges of a loan and his financial return will be 5.6%.
If the investor covers 10% of the project (30 000 €) with a contribution, he borrows only 270 000 €, enjoying a leverage effect allowing him to buy a property at 300 000, while having mobilized that € 30,000. The financial return here is 56.66% (17 000/30 000 x 100).
Attention, this is the theoretical mechanism of leverage, other parameters come into play to reduce (interest), taxes, fees related to good ...

In addition, it is better to keep your savings available to avoid losing money if the property were to be devalued in the coming years ...

THE DURATION AND RATE OF THE REAL ESTATE LOAN
According to the classic operation of any credit, the shorter the duration of the loan, the lower the loan rate. By cons, the monthly repayments will be more important. If this solution looks attractive, it is not always the best for all investors.

It is a question of taking into account the rate of indebtedness and the fiscal objective of this rental investment. You should know that most of the time, the rent does not completely cover the monthly payment of the credit (not counting the expenses!): It is therefore imperative to take into account this monthly financial effort in the financial calculation! In addition, certain tax exemption schemes, such as the Pinel Act, encourage a longer tenancy, with higher percentages of income tax reduction: for example, 21% for 12 years against 18% for 9 years and 12% for 6 years of rental!

An IMMOFINANCES broker knows how to combine these elements into an optimized financial arrangement: based on your tax objectives, he will be able to play with the various banking solutions available to reduce the total cost of credit.

THE NEGOTIATION OF BORROWER INSURANCE
Beyond the negotiation of your file with a partner banking institution, the broker IMMOFINANCES can also act on the borrower insurance. Let's not forget that the death and PTIA (Total and Irreversible Loss of Autonomy) guarantees are not legally required, but essential to sign a loan offer!

However, the cost of borrower insurance compared to the total cost of credit is not insignificant: a strong negotiation leading to a reduction of 2 or 3 can quickly save thousands of euros!

For example, with an insurance rate of 0.60% on a loan of € 300,000 over 20 years, its cost will be € 36,000 (or € 1,800 per year); by reducing the rate to 0.40%, insurance costs "only" € 24,000 (or € 1,200 per year).

Ask for quick advice for your rental real estate investment project, from a broker IMMOFINANCES in your area, it's free and savings will be real they!
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