(Partner Article) The current low interest rates lead to a significant gain in real estate purchasing power for investors. With a budget of 300,000 euros, you can build a solid and profitable project over time. Discover what real estate investment is possible with 300,000 euros of budget.
Your financial situation
You have 300 000 € in cash
You can become owner very quickly. And even consider an investment worth more than this amount. With such a contribution, the bankers will welcome you with open arms and will not hesitate to offer you very advantageous loan rates.
You have a debt capacity of 300 000 €
At the end of summer 2018, one can borrow over 25 years with a rate of at least 1.25% by being an expatriate (source: Financing Card). A rate slightly lower than last year. What to boost your budget. Borrowing 300,000 euros costs on average 100,000 euros … 50,000 less than in 2014!
You could also read: 3 tips to get a home loan
To ensure your financial stability, banks can request a contribution of between 10% and 20% of the amount borrowed. There are therefore 30,000 to 60,000 euros in this case. However, it is not uncommon to be asked to pay 30% to cover all costs when you are non-French residents.
With monthly payments averaging 1,000 euros per month, you have every chance of getting a favorable agreement from your banker if this amount does not exceed 33% of your household's income (fixed charges deducted).
What goods to offer?
In Paris, capital of high prices, the price of the square meter oscillates between 6,000 and 14,000 euros. With a budget of 300,000 euros, you can become the owner of a two-room apartment of around 40 square meters. In the most expensive neighborhoods (but also the most wanted), target rather a nice studio of 20m ².
This article could interest you: Invest in a furnished studio in France
You can push one more walls in the province. In Lyon, for example, opt for a 60 m² apartment located in the city center, and equipped with a terrace! The price per square meter is quite similar to Bordeaux (excluding hyper center), you can aim for the same types of goods.
What it can bring you
Difficult to promise a precise figure as to the profitability of your investment. Smaller areas are known for better yields, but renters change more often and reinstatements are more common. Investing in listed residential neighborhoods leads to lower profitability due to high housing prices. But you will be less likely to be faced with a vacancy.
This article could interest you: Popular District vs. bourgeois neighborhood, where to invest?
Compared to life insurance which yields between 1.50 and 1.80% on average, the rental investment easily makes better. In 2018, profitability averages 5.16% in Lyon, 5.19% in Bordeaux and 3.42% in Paris (source: Immoprix). These figures can still climb if you are attentive to two fundamental criteria: the quality of housing and its location. An apartment close to public transport, large schools or shops will be much more popular. You too must know how to bet on future attractive neighborhoods.
Your rental investment will be fully successful only if it fits with your personal expectations. So take care of define your goals before you start: to house a child, to lodge at retirement, to resell to release a surplus-value … You will thus be able to build you a durable inheritance.
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