The different steps to make a success of your investment
Realizing a real estate project, be it a main residence , a second home or a rental investment is an important event in the construction of its heritage.
The time you devote to preparing a coherent real estate project and the attention you pay to every detail will help you to avoid the pitfalls you will not miss.
We will try to bring you our lighting and help you to make this project a great success.
To establish a provisional budget
The preparation of a real estate project requires mastering the various stages by which you will pass and especially to respect them.
The first step is to establish a budget estimate to determine the monthly payment that you can spend on your future mortgage.
It is therefore necessary to list on one side all the household income and on the other all the expenses that will remain once the real estate project is completed.
Be careful to remember only income of certain character. If you have benefited from an exceptional bonus, no need to take it into account, the banking organization will not count it.
Your wages or salaries: this is the average salary over the year.
- Premiums (Thirteenth month, vacation or transportation premium): For variable bonuses, set an average over two or three years.
- Benefits in kind: only take them into account if they are recurrent and do not correspond to actual expenses. For example, mileage allowances should not be withheld.
- Property income: calculate your net income, ie after deducting expenses and taxes. If you just want to make an estimate, take 75% of gross rents.
- Income from financial products (life insurance, stock market or stock savings plan).
- Alimony: Be aware that the family judge can review the amount of the benefit if the income of your former spouse were falling. On the other hand, its contribution to the education of children will cease when they become autonomous.
- Family allowances: take into account the age of the children, because the banks weight the amount of these aids when they approach the age limit of 20 years.
Profit or equity bonuses are not taken into account by the lending institutions. They may constitute a margin of safety that will prove useful in the event of financial uncertainties.
Namely : it’s about net income. Add it up and divide by twelve to get the monthly net income you have.
Count only those charges that will remain in effect when you complete your real estate transaction. For this you will have to make some projections.
Indeed, the nature of some expenses will be modified because of the change of housing like the expenses of heating or transport. Others will disappear like the cost of rent. Finally, others will appear as the property tax.
- Ongoing loans, including consumer loans that will not be closed: think of accounting for any cash reserves such as permanent credit.
- Insurance (car insurance or provident insurance).
- Taxes (income tax, royalty and housing tax): know that it may vary if you change your principal residence . On the other hand, consider asking each time you visit a property what is the amount of the property tax.
- Telephony, internet, TV: it is all the easier to budget that these expenses are monthly.
Good to know : it may be time to compete to renegotiate your home insurance policy.
For variable expenses, it is simply a matter of evaluating a few months from your check stubs, your bank account statements or your blue card receipts.
Important : the transport and heating stations must be analyzed with the greatest care, because their amount exploded with the rise of the raw materials. Think about it, especially if you have to buy some distance from your workplace , the children’s school, or if you have to buy poorly insulated housing.
Know your borrowing capacity
A projected budget must be determined with some precision in order to determine its borrowing capacity and thus help you to direct your future research. Indeed, it is useless to visit goods priced at 250 000 € if you then realize that you can not go beyond an amount of 200 000 €.
Also remember to monitor the “rest to live”, ie the sum that you will remain each end of the month once the mortgage paid. A good credit must leave you a sufficient reserve at the end of the month to live normally.
For this you can use our financial calculators. They will allow you to simulate your ability to borrow or calculate your monthly payment in a few clicks.
- Quickly determine your borrowing capacity from your current income and credits
- Calculate your monthly mortgage payment in just 3 clicks
- Determine the amount of the real estate project according to the monthly payment you want to repay.
Financing of the real estate project
Financing your real estate project depends on both the personal contribution and the borrowing capacity. Of course, the lessons you will learn from the stages of preparation should be used to guide your research.
This will save valuable time and allow you to target real estate based on your financial opportunities.
This financing is even easier if the borrower has a personal contribution. Among the savings operations that make it possible to build up capital, the bank booklet such as the livret A or a housing savings operation have the double advantage of offering a return that is both secure and entirely tax-free. They also confer a total total availability of funds.
If you do not have capital, know that it is possible to borrow without personal contribution.
Organize your research
As you have understood, the aim is to direct your research according to your investment capacity. No need to waste time visiting real estate for which you will find out after the fact that they are off budget. On the contrary, it would be a shame to sacrifice to the quality of housing simply because you have underestimated your possibilities.
The projected budget and the calculation of the borrowing capacity must therefore guide your research.
Cheat the traps
To carry out a bad operation in the real estate can entail very important consequences. Backtracking often leads to financial loss. If you have misjudged work to be done for example or if you realize after the fact that the road is more busy than you imagined.
It is therefore essential to realize a good real estate project to make a number of checks beforehand.
10 checks to make before realizing your real estate project
- Check the price of the house in relation to the market price. For this, visit several properties of the same type. Ask the agencies you have not contacted yet.
- Check the general condition. If work is to be considered, involve craftsmen to prepare quotes before signing the sales agreement even if you do not plan to have them executed immediately. Also visit a more technical to check the condition of the structural work, that is to say, the roof, foundations and the most important items such as electrical installation or heating.
- Never buy after a first visit. Return to the accommodation at other times of the day to check for sunshine or traffic conditions.
- Ask the neighbors. What do they think of the neighborhood? What do they think is negative?
- Evaluate well the consequences of your choice. A house requires more maintenance and will be more expensive.
- Evaluate the distances to be covered. The campaign is good, but if you have to do long distances every day, it will cost money.
- The size of housing. If you are a couple without children, think that your family can grow. One more room may be useful.
- New or old? Notary fees are reduced if you buy a new property. However, a new apartment is more expensive to buy in general.
- If you plan to buy in a condominium, ask to read the rules first. Check the level of the loads.
- If the seller or the real estate agent puts pressure on you by specifying that potential buyers are interested, do not rush your decision, even if you can change your mind thanks to the withdrawal period. It is better to miss a good deal than to make a bad one.