Real Estate is an attractive long term investment. Yet for Expats, collecting rental, handling tenant requests or supervising renovation work can turn into a nightmare. To offset this burden, one may decide to invest in Real Estate funds. This page is dedicated to SCPI, the non-listed French Real Estate funds. If you wish to see the general discussion about real estate investment please see here.
As any Real Estate fund, SCPI give acces to a pool of real estate Assets, managed by professionals. They offer access to assets otherwise not accessible to individual investors (because too big or too specific) while providing diversification. Diversification is a key element as we observe that Expats Investment portfolios tend to be over concentrated in a handful of direct Real Estate investments, which brings some elements of risk.
SCPI combine the benefit of regular income, as part of the rental revenues can be passed on to investors, usually on quarterly basis, and potential appreciation (shall the Assets Value increase).
In normal market conditions SCPI are considered as liquid investment and can be sold on secondary market.
SCPI are regulated by French Authorities and accessible to Retail Investors. Minimum investment are then considerably low.
SCPI are offered by most Retail Banks & also Retail Asset Managers.
SCPI can be bought cash or with leverage.
As for any investments in France, SCPI revenues are subject to taxes.
How to leverage to buy SCPI?
Loans can be either granted by your usual Retail bank, as for any Real Estate investment. Alternatively, Financial Advisors may assist you to gain access to a Credit Institutions to purchase such investment. Some SCPI are also tied up with Credit Institutions.
Leverage can be attractive to Expats provided you can deal with the loan servicing. As for other Real Estate financing, loan can be long term such as 20 years.
Loan to value can be up to 90% of the total investment, which means with EUR 10,000 you can invest up to EUR 100,000 in the SCPI and subscribe to a loan for EUR 90,000.
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