Published on : 01 February 20193 min reading time
You wish to invest in real estate for your main home or for a rental investment but are still hesitant between the new or the old one? Although the former represents a larger share of the real estate market, the new has many assets, often ignored by buyers.
Benefits and disadvantages of investing in old real estate
With the current decline in credit rates with banks, investing in older real estate will certainly be a good investment despite the strong price hike seen in recent years. Indeed, when you opt for an old property, usually needing to carry out renovation work, the property deficit is already an excellent mechanism that allows you to deduct the costs of said work from your overall income. These costs are deductible in the first year of your investment, up to a certain limit. Thereafter for the next ten years, the expenses will be deductible only from your property income. This means that by investing in the old, you will benefit from enough flexibility and make good profits, especially if your investment is in one of the big cities deemed attractive in terms of the price at the sale of real estate.
In a nutshell, investing in old real estate offer some tax benefits as well as strong performance prospects. Only, remember that there is no risk-free investment and therefore, such an investment has its share of disadvantages even if they are minimal.
Benefits and drawbacks of investing in new real estate
Investing in new real-estate has many benefits, especially if it is about launching in rental property investment. Indeed, there are highly attractive laws that allow you to benefit from a regime of tax exemption all over Europe. This plan that aims at facilitating access to housing, allows you to pay less tax on your real estate assets placed for rent. One could logically think that investing in this context suggests great business opportunities.
The current environment of the new home market seems at first sight far from being conducive to achieving extraordinary gains. That being said, it should be noted that prices for new real estate continue to grow at their small pace. Therefore, with such high prices, it is clear that it is currently very difficult to expect a real gain on your rental investment, either on the short (6 years) or the long term (12 years) even in a context where the credit rates established by financial institutions experience their lowest levels compared to previous decades.
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