The French and European population in general are ageing. This is why more and more people are choosing to invest in retirement homes. Find out all there is to know if you want to invest in retirement homes.
EHPADs (meaning accommodation establishments for dependent elderly people) are multiplying in the country. It must be said that the demand for places in this type of establishment is increasingly substantial. Indeed, the global aging of the population and the increase in life expectancy have an enormous impact on the number of seniors losing their autonomy. All these people must manage to find accommodation. These medicalized dwellings represent a relevant and profitable investment via what is called the Censi-Bouvard law.
To make an investment in this type of establishment is to bet money on furnished rentals, the management of which is ensured by a service residence. You acquire a home in a collective complex, managed by a manager. During your purchase, you sign a commercial lease contract with the operator concerned for a period of nine years. This is the insurance of the payment of a rent, defined beforehand, during the totality of the duration of the lease.
If you want to reduce your taxes, the solution of investing in retirement homes is an excellent idea. In this sector in great tension, putting money on a furnished residence for a senior public offers the possibility for the investor to plan his retirement via recurring additional income, or even to exchange your financial assets for real estate assets. .
Investments in an EHPAD: what are the strong points?
Strengths in terms of taxation, resale, management or income security: investing in an EHPAD offers a multitude of strengths!
The strong tax points in connection with an investment in this kind of establishments combine tax exemption in relation to the LMNP status as well as that of the Censi-Bouvard law. Discover everything there is to know about the Censi-Bouvard and LMNP combination.
Via the Censi-Bouvard law, you will be able to benefit from a tax reduction of 11% of the amount excluding tax of your investment, within the restriction of 300,000 euros injected each year and per tax household. This reduction is effective over the entire duration of the lease, which corresponds to nine years.
Censi-Bouvard offers you the possibility of benefiting from a recovery of the VAT of your purchase, and this, within three to six months after the signature of the notarial deed of sale. To this end, the service residence must offer at least three of the following four services: breakfast, cleaning of common areas, supply of household linen or even reception. This immediate reimbursement of VAT represents one of the advantages of investing in a service residence. With the Censi-Bouvard law, investing in this type of establishment is easy. Take the opportunity to invest in nursing homes.
The furnished rental activity generates income characterized as commercial. Consequently, you proceed to the declaration of your rents to the BIC regime and not to the land. This major divergence offers the possibility of benefiting from a reduction in relation to your income of 50% in micro-BIC while for micro-property, they will be 30%.
The LMNP status offers the possibility of depreciating the property concerned and the furniture of the accommodation. However, compared to an investment in an EHPAD under the Censi-Bouvard law, it is impossible to take advantage of it.
Second strong point of the investment in this kind of establishments: the assured collection of the rents. Here is the major advantage of the rental business furnished in service residences. Whether it is occupied or not, you will be able to receive your money thanks to this accommodation since it is the manager of the senior residence who endures the danger of rental vacancy. Despite the fact that it is not impossible to fully ensure the instant payment of rents at the right time, residential establishments for dependent elderly people are a lesser danger.
Indeed, in the private housing stock, the average occupancy percentage is defined between 93% and 100%. The latter is much higher than the rates seen in conventional furnished rentals, which offers you almost certainty of the renewal of the commercial lease by the operator.
Finally, this type of real estate investment also offers you the possibility of proceeding to the total delegation of the management of your rental. The manager of the furnished seniors’ residence is your only contact. Thus, he takes care of all the current worries and the collection of rents.
Investing in a medicalized senior residence allows you to obtain advantageous taxation. Nevertheless, before investing in this kind of establishments, it is essential to address several weak points. A strict law governs this activity. It should also be taken into account that not all service residences are created equal. Also take into account that the land revaluation is almost zero.
The major constraints of this type of investment are also that the budget put in must be quite substantial (count nearly 150,000 euros). It is also necessary to think of the various resale constraints because the value of the EHPAD is not optimized over time. On top of that, the market is small and the supply is less while the demand is more than substantial.
Rental investment in nursing homes targets individuals whose purpose is to build wealth. This will then offer them the possibility of generating recurring income without being obliged to get involved in the rental management of the accommodation. We recommend that you choose this type of investment with a view to preparing for retirement.
Investors can exchange part of their financial wealth for yield real estate assets. The search for an optimal return/taxation ratio is a goal for many investors.
The rates for making an investment in this type of establishment are between 55,000 and 500,000 euros for a room, everything is linked to the lot as well as to the residence chosen (the intrinsic strengths, the services offered, location etc.). Take into account that the more the lot will be expensive, the more the rents to be given will be consequent.
In addition, the investment price in a room includes all of the following: the room, the equipment, the furniture, the common areas or even the services… To be more concrete, it is necessary to make a comparison of this investment with the purchase of a hotel room, which also benefits from multiple and varied services: reception, gourmet catering, room service, pets allowed, doorman or even laundry. The price of an accommodation establishment for dependent elderly people does not impact its performance. Investing 200,000 euros in this type of establishment via a return of 5.5% net is a better option than acquiring a small apartment offering a return reduced by a multitude of elements such as charges, rental deficiencies and the syndic. Now you have all the cards in hand if you want to invest in retirement homes in 2022.