The profitability of its real estate is more and more at the heart of the debates. Indeed, many people get into real estate investing without really knowing how it works. They find themselves quickly with real estate that they can not make profitable. This article shows you how to improve your real estate profitability. See http://anmgemelos.com for details
Real Estate Investment: How to increase the profitability of your property
Buy under market
Look to buy real estate below the current value of the market. For example if the current average value of an apartment on the market is 100000 euros, find an apartment that you can buy for up to 80000 euros. You can then turn to old real estate. On the one hand, old properties are much more abundant than new properties and extend over much larger areas. It is also easier to negotiate old real estate.
After the acquisition of the property, you must move to its renovation. Do all the necessary renovation work. Whether it’s plumbing, electricity, painting. Check that the property meets all applicable standards. You can benefit from certain tax credits and a reduced rate of VAT. But before you buy an old property make sure it will be profitable. According to the example used above, your property must be able to increase to a value of 120000 euros after its renovation. Also make sure that the property does not involve irreversible damage, or that could cause you enormous loads in the long run. Call in specialists if necessary. To make the choice of the old one is to think of the profitability of one’s real estate from the beginning.
Real Estate: Increase the value of your property
Tax regime: Which plan to choose to pay less tax?
There are several types of tax plans depending on your status. There is the “real” regime and the “micro-land” regime in the case of bare rent and the “real benefit” and “micro BIC” schemes in the case of furnished rental. Depending on the status of your property, you can choose the plan that suits you. Note that making the choice of your tax system will allow you to optimize your tax system. Indeed, you can benefit from a deduction of the expenses related to the maintenance of your property for example, directly of the rents which you perceive. An optimized tax means reducing taxes, which implies an increase in the profitability of its property.
Become an owner: real estate charges
To ensure an increase in the profitability of your property, one of the important things to do is to reduce its expenses. There is no point in trying to increase your income if your expenses increase as well. Even if your charges are deducted from your rent, try to reduce them. You will repay your loan faster. Take the case of the “micro-land” or “micro-BIC” regime. The percentage deducted annually from your income before tax is fixed. In this case, the lower your expenses, the higher your net income after tax.
Real Estate Financing: (Re) Negotiate your loan
Increasing the profitability of your real estate also means a good negotiation of your loan. Depending on the estimated profitability of your property, you can determine the amount and duration of your loan. It is advisable to choose a long period on which to repay your loan. This has a double advantage. You can get a loan of a high amount and the monthly payments you will have to pay will be low. The net income earned will then be higher, a sign of an optimization of the profitability of its property.
But in case you already have a loan in progress, you can still renegotiate it. Look to renegotiate your home loan at a lower interest rate than you originally purchased. You will have to convince your banker for that. Play the competition or simply close your credit to open another at a lower rate.