SCPI on crédit

Investing in SCPI, what is it?

Acquiring shares in an SCPI means buying real estate indirectly. A management company invests in real estate and pays you the rent it receives in the form of monthly or quarterly dividends. This type of investment allows you to own property at a lower cost. The management company takes care of the rental management, you have nothing to do!

An SCPI is a financial investment that must be approved before it is marketed.

When you want to invest in real estate directly, you fully assume the management risks such as rental vacancy. An SCPI aims to mutualize these risks by diversifying the geographical area of the properties and their sector of activity. 

 

Why invest in an SCPI on credit?

There are two ways of acquiring an SCPI: cash and credit. These different methods meet a particular demand and different needs. Financing an SCPI on credit allows you to build up a real estate portfolio while benefiting from a high leverage effect and a low savings effort. Indeed, the leverage effect will make it possible to obtain a more important capital while using the rents of the SCPI in order to refund the credit in question. The cost of the loan will therefore be partly financed by the SCPI and your savings effort will be minimized.

The financeable SCPI can be part of several investment strategies, it can be the solution to acquire a real estate asset with a more accessible borrowing capacity and a management that you do not have to take care of. Moreover, in order to prepare for retirement, the SCPI financeable will keep your liquidities while obtaining a greater number of shares and thus a more important income supplement for your retirement! 

Finally, if one day you wish to finish the loan in order to receive all your rents, it will always be possible to sell part of your SCPI units in order to pay off your loan. However, the interest of an SCPI is to invest on the long term, the horizon of investment is between 10 and 12 years, it will thus be judicious to wait this duration if you wish to put an end to your loan.

 

Types of SCPI that can be financed

All types of SCPI can be financed:

- SCPI of defiscalisation: these SCPI are intended to be part of a defiscalisation scheme like the Pinel scheme. Thus, you will have the same tax advantages as if you had bought the property directly.

- SCPI of capitalization: this investment has for main objective the capital gain and not the dividends. The management company will distribute few dividends in order to increase the value of each unit and thus generate a capital gain at the exit.

- Distribution SCPI: these SCPI are created to distribute! Rents are paid out in the form of dividends to provide you with additional income.

 

How does it work?

The SCPI on credit is financed like a classic credit with various financing organizations. It is necessary that the loan coincides with the capacity of the saver. A portfolio of SCPI will then be chosen in order to diversify the investment, which must be in line with the interests and needs of the investor. The loan in question can be a classic amortizable loan or a loan in fine. It is possible to insert a contribution, although it is preferable and possible to finance at 100% its purchase of shares, that will allow you to allocate your contribution to other supports in order to diversify your saving.

 

Consumer credit or real estate credit ?

It is possible to take out an allocated loan or a real estate loan to finance the purchase of SCPI units.

Consumer credit

Consumer credit is possible up to 75 000€. In most cases, the credit will be used to purchase the shares. The advantage is that if this credit is allocated, the taxation will always be interesting and you will be able to deduct the interests from your property income. However, the rates of the consumer credit can be less attractive and an insurance, even if it is not obligatory, can be required.

 

Amortizable real estate credit

This type of credit is the most common, it is a classic real estate loan with monthly payments comprising on the one hand the capital to be reimbursed and on the other hand the interests, the latter often being calculated on the remaining capital due. This method of financing is the most common for the financing of SCPI.

 

Real estate credit In fine

In this case, the saver repays every month the insurance and the interests of the loan, the repayment of the borrowed capital will be carried out at the end of the duration of the loan. How to repay the financing at the end of the loan? There are several options available to the investor, most of the time, a predefined amount will have to be placed on a life insurance and will be backed by the loan, the bank needing a guarantee. At maturity, the investor can either use his savings to repay the capital or sell some of his shares. The latter method implies that the investor is exposed to the liquidity risk of the real estate.

 

An interesting tax system

If the rents of your SCPI will be taxed as classical real estate income, you will be able to fully deduct the interests of your loan!

 

Want to invest? The financing of shares of SCPI will allow you to increase your patrimony while preserving your availabilities, our advisers in wealth management can accompany you in this real estate investment, contact us for more information!

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