Real estate broker remains an interesting investment on the long term with a better return compared to traditional savings or life insurance. Investing in real estate in 2023 is therefore a strategy to adopt. If this investment is not without risk, it allows to build a real patrimony and, through a careful and intelligent management, allows to reach a good profitability and to leave an inheritance for your children or grandchildren. However, it is crucial to know the pitfalls to avoid and to be able to invest in 2023, and avoid losing feathers. For example, you can prepare a real estate fact sheet or follow our tips for buying a property. Zoom in on the main tips for becoming an investor and the few tricks that can help you avoid these mistakes and create a real estate fortune, whether for a long-term investment or in a more speculative context such as short-term rental. This technique is valid even for those wishing to invest in 2023.
Table of Contents
- Investing in 2023: Identifying your project :
- Take advantage of available tax benefits :
- The dynamism of real estate :
Investing in 2023: Identifying your project :
Calculate your debt capacity :
In the case of a principal residence, the maximum debt capacity is between 30 and 33%. This means that the monthly payments of the real estate loan necessary for the acquisition of the property must not exceed one third of the income. This income includes salaries, various allowances and possible rents received thanks to the rented property.
This debt capacity is revised downwards in case of existing credits, but also according to the profession exercised (in general, civil servants can obtain a higher debt rate) and age (the higher the age, the more the bank will ask to revise this rate downwards).
Investing in real estate also means making sacrifices and choices that generally limit one’s lifestyle (reducing the vacation budget, reducing travel, limiting leisure activities and outings, etc.).
Without falling into generality and hearsay, it is good to keep a margin of maneuver which can have important consequences in the medium term.
Choose your structure according to your ambitions :
If you invest in old buildings to create a small estate, with one or two properties bought to rent, it is not necessary to dwell on the structure you wish to put in place to invest in 2023.
If, on the other hand, the wish is to draw a maximum of income in the form of an annuity and to acquire a large number of properties, the choice of a structure like the SCI makes sense.
Indeed, the inheritance costs for the heirs can become important or even insurmountable for the beneficiaries. The SCI allows, with a partner, to create a real company that will manage the assets and grant income to the beneficiaries.
The non-trading property company allows several people to join together with the aim of sharing one or more properties. The partners can make contributions and obtain shares in the SCI. The partners share profits and losses, and can entrust the management to a natural or legal person, like a company.
Take advantage of available tax benefits :
Tax exemption, upgrading of properties to invest in 2023 :
In view of a rental or a real estate investment, these tax exemptions will allow you to increase the profitability of the property and to decrease the duration of the return on the investment.
If the installation of double-glazed windows is no longer tax-exempt, these windows reduce energy consumption and increase the value of the property. In this case, it is preferable to remove all the windows to avoid the thermal bridges found in the case of a simple renovation.
Modernization of old housing :
In the context of a rental investment by acquiring old housing, do not hesitate to study the possibility of adding equipment to modernize the property.
This can range from replacing the oil-fired boiler with less polluting equipment (high-efficiency condensing boiler, wood pellet boiler, electric heating, etc.) to installing solar panels without altering the overall aesthetics of the property.
In addition to the potentially tax-exempt equipment, think also about modernizing the decoration by focusing on neutral and universal colors, in order to depersonalize the rooms in which a family has lived and its history.
The dynamism of real estate :
The rate of return on a rental :
The rate of return on a property is the ratio of its annual net rent to its purchase price. An interesting yield to invest in 2023 is around 8%.
If the rent is for example 500 € net per month, and that the acquisition was 100000 €, the return corresponds to (12×500) / 100000, which corresponds to a return of 6%.
In this situation, it is preferable to think before buying to generate cash flow with your investment. Ideally, you should be able to find a property with a 10% rental yield if you want to live on your real estate income.
Property taxes and housing maintenance costs :
Another important point not to be neglected when one wishes to invest in 2023 : to know well the charges and the associated taxes in order to qualify the cost and to take it into account in its calculation of return on investment.
An old property requires several maintenances, in particular at the level of the roof. It is important to analyze the quality of the roof, the tiles and the frame before jumping into the acquisition of this property. Do not hesitate to ask the former owner for some invoices attesting to the work carried out, in particular within the framework of a setting with the standards, in order to ensure you that these work will not be carried out by your care.
The last point that is very important for a house is the surface area of the property. An apartment with a high rental yield is often an apartment that can be divided or a building with a rental value.