What are the advantages of turnkey rental investment?
As already mentioned, a turnkey rental investment is when you buy a property and rent it out immediately. Naturally, this sort of real estate endeavor comes with its own set of advantages. They make the following that much simpler and easier:
- Searching for a property (i.e. location, budget, surface, profitability)
- Calculation of profitability
- Negotiation (following up from sale to purchase)
- Tax and legal support
- Realization of the tax package (i.e. LMP, LMNP, SCI, property deficit),
- Constitution of the project financing file (i.e. getting a mortgage, renegotiation of the borrowing rate, etc.)
- Development and transformation work to add value to the property
- Searching for tenant
- Rental management
Ultimately, a turnkey rental investment benefits individuals who do not have time to search for a property. It can also be advantageous for French expatriates wishing to buy a pied-à-terre.
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- What are the risks associated with rental investment?
- Difficulty finding tenants/ rental vacancy
- Risk of unpaid rent that can lead to unwanted conflicts
- Poor estimation of development and transformation work
- Incorrect estimation of the price of a property
This is why turnkey rental investment aims to limit its risks by offering tailor-made support and/or rental management.
4. Access goods outside the market
Working with real estate professionals means working with experts with in-depth knowledge of the market. It is working with real estate agencies that weave partnerships, in order to access properties exclusively. As an individual, it is not possible to invest in these off-market properties.
> Switch to Off-Market and avoid competition?
2. Optimising investment taxation
Optimizing taxation means setting real estate objectives and determining a tax strategy.
Real Estate Project > Which rental? > What tax regime?
Coliving > Furnished rental > LMNP (renting out as a furnished non-professional) or LMP (renting out as a furnished professional)
Shared > Furnished rental > LMNP (renting out as a furnished non-professional) or LMP (renting out as a furnished professional)
Seasonal rental > Furnished rental > Tax regime seasonal rental
Empty rental > Land income
Purchase Resale > / > Professionals (property dealer) or individuals (real estate capital gain)
Rents from a non-professional (LMNP) or professional (LMP) furnished rental activity constitute commercial profits (BIC) and are not considered property income. The BIC system also allows the deduction of many ownership-related costs and the amortization of property acquisition-related costs.
3. Tailor-made support and time saving by delegating rental management
Rental property management consists of entrusting the administration of your property to a management agent, a practice that relieves property owners/landlords of the various tasks related to renting. It's one that those who invest in a turnkey property can benefit from since they're leasing out their property too.
*Thanks to our expertise by A1 Real Estate in Paris, know-how, and our strong experience in furnished apartment rentals in Paris, we intervene at all stages of the rental and its management for any short-term or long-term rental. We will take care of problem-solving, communicating with the tenant, customer satisfaction, relations with the condominium, administrative tasks, payment of rents, cleaning services, maintenance, small repairs, major works via our professional speakers, and more.
- A turnkey rental investment is when you buy a property and immediately rent it out to a tenant.
- It has multiple advantages, ranging from the calculation of profitability to tax and legal support.
- This type of investment mostly benefits those who don't have that much time to search for available properties.
- The turnkey rental investment allows for optimizing investment taxation and rental management.
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Posted on 18/04/2023 by
Andy LECUYER
