Your Bordeaux concierge explains how to make your rental investment a success without any contribution
Real estate investment is one of the most popular in France. Wrongly considered as a “rich” investment, investing in real estate nevertheless requires knowledge of how bank loans work in order to be able to take advantage of the tricks used by professionals as soon as possible. With the craze for seasonal rental investments and the explosion of reservations, Airbnb, more and more buyers want to turn to a profitable rental purchase while limiting their expenses. Your Bordeaux Concierge helps you understand how to limit or even eliminate your personal contribution and obtain a bank loan. We give you the tips to limit your rental expenses and offer you our experience to make a successful rental investment without contribution.
Investing without contribution, what is it?
It seems unreal to you, and yet, with experience and good arguments, some investors manage to buy new properties without spending money. But what is an investment without input?
In general, buying in real estate is done in several stages. You find an accommodation that interests you (whether for a personal residence or for a rental investment), then you go to your banker. Your loan application is in progress and takes into account several elements: your income, the management of your accounts, the duration of the loan, the type of purchase and your personal contribution.
In principle, banks will generally ask you for a contribution equivalent to 10% of the purchase price of the property you want. This 10% covers notary fees (which go from 2 to 3% for new homes to 8% for the purchase of an old property), as well as administrative fees (which can go up to 1% of the total sum).
However, there is an exception made for certain investors. Indeed, some banks agree to issue bank loans without asking their client for a personal contribution. This is called 110% financing. Succeeding in investing without contribution allows you to keep your cash and buy all of your property with the money from the bank. This is the holy grail of all investors.
How to make a rental investment without contribution
To succeed in a rental investment without contribution, it is essential to understand and implement certain strategies.
How to take advantage of leverage
Credit leverage is the act of relying on investment returns to pay for credit extended by your bank. It is therefore essential to realize that a real estate investment can only be made without contribution if you dedicate it to rental. In the event of the purchase of a primary or secondary residence for personal purposes only, it is very unlikely that your bank will grant you such a favor.
Because, taking advantage of a credit without contribution is a real mark of confidence by the bank which is not given to just anyone. A rental investment without contribution allows you to assume the effective cost of your property directly by your tenants. You control your debt ratio thanks to the balance of your income and your expenses.
To hope to see you granted a loan without paying the slightest advance, you must imperatively demonstrate your seriousness to your bank adviser. Your Bordeaux concierge advises you first to carry out an online simulation. This will allow you to more precisely locate your borrowing possibilities. Simulating a mortgage without borrowing allows you to compare the different offers from banking institutions. You will be able to choose your bank according to: the interest rates applied, the maximum duration of repayments, the amount of administration fees, etc.
But estimating your mortgage allows above all to define your real estate purchase project more precisely. This will help you estimate the minimum rent to achieve good leverage. Once in front of your advisor, you must present him with a complete loan application file. Prepare your supporting documents as well as a detailed financing plan for your investment strategy. This will demonstrate your professionalism and seriousness. A well-prepared financing plan gives confidence to the banks who will consider you as a stable investor.
The influence of tax advantages
Good to know: if you want to position yourself on an already rented accommodation, your financing file has a significant advantage. Indeed, the amount of the rents collected being known in advance, these will be taken into account in the calculation of the amount of your loan. However, banks generally take a safety margin by only taking into account 70% of the amount of rent.
If your objective is to buy a new property with the aim of making it rental accommodation, you can benefit from the Pinel law system. Although it asks the owners for a long-term commitment (the property must be rented between 6 to 12 years), this law allows a very advantageous tax advantage. This allowance will also be taken into account by your banking institution to calculate your debt ratio.
Invest in real estate, advice from your Bordeaux concierge
First of all, it is important to note that certain exceptions may allow you to finance a rental investment without contribution. For example, if you already have real estate assets, you can use the value of your existing property as collateral to obtain a loan and finance a new investment.
Your Bordeaux concierge is specialized in the management of Airbnb rentals. Thanks to the high income generated by seasonal rentals, your financing file will have solid arguments with your advisor. Indeed, your Bordeaux concierge has a precise vision of the real estate market in its area of action and gives you an annual estimate of the possible income from seasonal rental of your accommodation. In addition, using an Airbnb rental professional certifies you have optimal rental income to repay your credit and enjoy a significant surplus.
Investing in rental real estate without an initial contribution is quite possible thanks to different strategies. By using bank credit and taking advantage of tax benefits, you can make a rental investment without contribution. You will need to prove your validity and your seriousness to the banks. Build a solid financing file thanks to your concierge service in Bordeaux. Call on our expertise to make your rental investment a success and get your mortgage.
