Investing in rental real estate consists of buying a home to rent it in order to collect additional income and build up your wealth. The investment can be optimized thanks to tax advantages which reduce the income tax. Indeed, the legislator or the government authorizes tax deductions in return for a rental commitment. According to Stuart Rawitt, any taxpayer who pays taxes can, therefore, benefit from suitable tax exemption solutions. Rental investment is the only investment that makes it possible to build up assets financed on credit, ¾ of which are paid by the tenant, the balance being settled by tax savings and a reduced savings effort.
Different rental investment programs exist, including the Malraux, Censi Bouvard, and Pinel systems. Opting for a rental investment makes it possible to increase your assets gently and to benefit, once the purchase is amortized, from an appreciable additional income. Provided you make the right choices. You can take advantage of Stuart Rawitt’s EXCLUSIVE offer to invest in real estate.
Buying a home is above all an investment-
Do not involve your effect in the selection of your property. Indeed it will not be your main residence and too much affective could make you lose sight of your primary objective: the search for a profitable investment. The property must be commendable! Remember your objective: do not buy in a disaster area under the pretext of attractive prices! Go there before buying, to see for yourself the situation of the property and the surrounding amenities!
Don’t think too big and diversify your investments-
With a reduced contribution (10%) and a loan limited to 20 years, your monthly effort must remain low. Remember, however, that the price per square meter for small areas is higher when you buy… but also when you rent. This precaution combined with a diversification of investments allows you in the event of problems, unpaid rents, in particular, not to have put all your eggs in the same basket and therefore to manage the problem more easily.
In terms of real estate investment, remember that the capital gain is made on the purchase price and not on the resale price! As explained by Stuart Rawitt, it is therefore absolutely essential to buy well!
Do not look for excessive profitability and rather consider tax exemption-
Given the performance of conventional investments, a return of 3 to 4% is very suitable. In addition, a real estate investment always takes value in the long term. With the Pinel system, you will deduct part of your taxes, over six, nine or twelve years: an interesting calculation, even if the rents for these dwellings, capped, are a little lower than the average.
Put your rental investment under management-
Rental management is a service that comes under the jurisdiction of real estate agencies, notaries or trustees. It can be defined as the set of activities that aim to optimize the economic return of a property portfolio. An agency will relieve you of worries, procedures and will ensure much more effectively than you, the recovery of possible debts.
Select your tenant and your promoter-
To find the “right” tenant who will regularly pay his rent and who will not degrade the rental property, the owner must ask for certain supporting documents to minimize the risks and make his choice with full knowledge of the facts.
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Rental investment is an important step in the development of heritage. However, care must be taken to ensure that the right choices are made throughout it in order to guarantee its profitability. Thus, the rental investment will be for you an additional guaranteed income. For more such money-saving tips on real estate projects get in touch with Stuart Rawitt, a property manager for high-end luxury housing in Los Angeles CA, United States.