The asset management sector has undergone a process of profound transformation in recent years which has enabled operators to offer their clients ever more innovative products and services capable of meeting the growing demand for new financial products. This is how SCPIs were born, which make it possible to transform real estate investments, which by nature require longer durations, into units of financial assets. which allow you to generate cash without the investor having to buy real estate directly. However, some people ask the question: What main criteria should be identified before investing in an SCPI? Read on to find out.
All SCPIs operate on the principle of risk pooling. If the investment in a particular asset goes badly, the loss is passed on to all participants in the fund. The more members there are, the lower the risk. You will therefore have to favor SCPIs which have a very high capital. Avoid entrusting your money to SCPIs whose capital is less than 300 million euros.
Do not forget it ! We invest in an SCPI to grow our capital. You will therefore have to be careful and favor SCPIs that have a high yield, while having an acceptable risk profile. To do this, I invite you to follow a good SCPI comparison in order to evaluate the performance of each of the SCPIs. Most SCPIs offer an average return of 5%. Some go up to 6%. However, remember that this return is not legally guaranteed. Read the opinions of other users.
This rate indicates what percentage of the real estate assets of the SCPI is inhabited by tenants. You should absolutely avoid SCPIs with an occupancy rate of less than 90%. Indeed, this rate is positively correlated to the performance of the SCPI. The best would be to invest in funds whose occupancy rate is between 95% and 100%.
When you subscribe to an SCPI, you automatically become a shareholder. The units you hold behave like shares. You can therefore resell them on a dedicated market.
The resale price will of course depend on supply and demand. If few people ask for the shares of the SCPI to which you have joined, it is possible that you will lose considerable sums. You must therefore take care to choose a well-rated SCPI to avoid such disappointment.
This term refers to the cash present in the account of the SCPI. This sum, known as “retained earnings”, relates to money not used during a financial year. It is therefore a safety valve that reduces the risks incurred by members. The higher it is, the lower the risk of bankruptcy or payment default. Liquidity is positively correlated to the age of the SCPI.
SCPIs can invest in a variety of real estate ranging from apartments to office space, including old real estate and nursing homes. The performance of the SCPI will, of course, depend on the performance of the assets in which it has invested. Given the fluctuations experienced by individual categories, diversification is the key word.
If an SCPI only invests in one class of assets, it could make a lot of money if those assets improve, but it could also be in serious trouble if the class in question collapses in the market. This is why you should first invest in SCPIs whose asset portfolio is very diversified.