The famous saying “who pays his debts gets richer” has lead in the wing. Because investing in real estate on credit today makes it possible to build wealth at a lower cost thanks to low interest rates. As explained by Challenges magazine, borrowing is more interesting than making financial investments that pay less.
Invest your cash in real estate
If you win the lottery or if you inherit Granny Odette, especially do not pay your mortgage! Instead, put your money in new real estate investments. Any financial advisor will tell you: today, it is better to invest in real estate. Real estate rates are at their lowest (1.45% in January according to the Housing Credit Observatory / CSA) and the stone remains a safe bet compared to financial investments whose rates of return are less remunerative.
Real estate investments up
The proof is that in 2018, in the old real estate, 21% of the transactions were carried out by investors against 15% in 2017. The rental investments are on the rise, either for an additional contribution to the revenues, or to finance a future retirement. On the new property side, real estate tax exemption thanks to the Pinel law allows a tax reduction of up to 21% of the total investment budget. Thanks to this effect of “leverage of the credit” an individual can build a real estate patrimony with a lower cost and deduct the interest of borrowing of his property income.
Almost no cost
In 2018, mortgage rates remained below 1.50% throughout the year. With inflation at 1.8% this makes the cost of credit almost nil. Even if you have cash, it is better to keep and borrow to invest! This allows you to keep cash to cope with work or other unforeseen expenses or put your cash on more profitable investments like life insurance for example.