Investing in rental property

Rental investment in a few clicks, the savings of the future?

The AMF (Autorité des Marchés Financiers) has just authorized certain regulated platforms such as Raizers to offer everyone the possibility of investing in real estate for direct rental!

"Raizers' ambition is to give everyone access, from a €10,000 investment, to a rental property savings product that was previously reserved for professionals investing in commercial premises and direct block purchases of residential properties. With an investment horizon of at least 7 years and estimated annualized returns of between 4% and 8% on European assets in France, Switzerland, Belgium and Luxembourg," enthuses Grégoire Linder, founder of Raizers.

Until now, to obtain a rental yield, there were mainly 2 main possibilities:

1. To proceed alone ; a complicated, long and uncertain path. It consists in looking for a property with real estate agents or by Internet, selecting the properties which seem to have interest, making visits (sometimes numerous), negotiating a price, obtaining a bank loan, taking care of all the administrative steps (notary...), looking for reliable tenants, paying the charges and the taxes, following the payment of the rents...
2. Invest in real estate funds such as SCPI (Société Civile de Placement Immobilier). Simple and fast, but less efficient than expected! Some of them have entry fees of up to 11.5%, high annual management fees that reduce the return and a great opacity on the acquired properties.

Now individuals and investment professionals will be able to invest in minutes, without having to deal with the logistics of structuring or paying exorbitant fees.

There are a multitude of additional benefits to this new savings:

• The ability to decide which properties and regions to invest in, to diversify one's portfolio by choosing to invest in several properties and thus to establish one's own investment strategy;
• Not to be exposed to a single major investment as when buying a property alone;
• Access to a detailed online financial analysis by professionals, allowing you to take the time to get informed and make the right choices;
• A subscription in just a few minutes, from the comfort of your home;
• Retaining the power to make decisions related to its investment: choice of service providers, proposed stakeholders and decisions on the disposal of the property;
• The potential of realization of a capital gain in the long term, not proposed by the SCPI taking into account the expenses taken on it!

The platforms will present two main types of investment, with or without bank leverage (à la carte):

See the products offered

Here's how an operation usually looks from A to Z:

Setting up the operation

• Research, study and analysis of the property
• Negotiation and signing of the sales agreement
• Signing of quotations with all parties involved (insurance, bank, rental management, accounting, etc.).

Fundraising

• Putting the operation online and collecting funds
• Control of investors by the bank and receipt of payments
• Obtaining bank financing if necessary

Closing of the operation

• Creation of the SAS (company specially created to carry the operation) and transfer of funds into the structure
• Purchase of the property at the notary
• Signing of contracts with all stakeholders

Post-collection administrative management of the investment

• Raizers will preside over the holding SAS. It will manage its organization, in particular the general meetings and will be a force of proposal to the shareholders as for the future of their real estate investment.
• Management of return flows (dividends), payment of taxes and social charges, single tax form, etc. For all these missions
• The management of the property can be organized by a local agency specialized in the sector and manages the tenants, the fees are generally around 5% HT of the rents collected annually
• Detailed reporting of the rental status - annual valuation of assets

A central question remains, how to resell the building shares!

"It should be understood here that the investor is the owner of the property or more precisely a co-owner via the investment holding company. There are therefore 2 possibilities, either the investors decide with +50% of the votes (during the annual meeting) to sell the building and recover the fruits of their investment or, the investor decides to propose to the other co-owners (or external persons) to buy back their shares of the property", comments Maxime Pallain, co-founder of RAIZERS. "Finally, this new investment practice does not reinvent finance, it only opens up to the greatest number a market secretly kept by institutional investors.

Maxime Pallain - Co-founder of Raizers

[email protected]

+41 22 575 27 27

CAUTION, investing in financial securities issued by unlisted companies involves specific risks. When you invest in capital: a risk of partial or total loss of capital; a risk of illiquidity: the duration of the investment cannot be guaranteed; the return on investment also depends on the success of the project financed. When you invest in bonds: liquidity risk: you may not be able to sell the bonds you hold at the desired time; political risk, as new tax restrictions may be applied; inflation risk, which reduces the return; and the risk of default by the issuing company. The higher the rate, the higher the risk. The advertised return is presented excluding taxes and possible fees.