WHY INVEST IN CAR PARKS?

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WHY INVEST IN CAR PARKS?

An affordable price

If you do not have a big budget and you want to invest without taking out a big loan, parking is the ideal solution. 

With different prices depending on their location, any investor can find a product to suit their budget. 

The price of a parking space in Paris can range from thirty thousand euros to sometimes fifty thousand, the range is rather fifteen to thirty thousand euros in large cities. Elsewhere, parking can be purchased from five to fifteen thousand euros.  

Of course, these ranges are only indicative, several variables are to be taken into account, starting with the market.

Low loads

Garage, box or parking space, it is a low-risk investment, because the drafting of a rental agreement is much more flexible than residential real estate. 

The risks are minimal when it comes to securing rents, since it is very simple to end the rental. 
Before investing, however, it is important to consider what a purchase entails, starting with transfer fees, but also property taxes, condominium fees and taxes. 

The installation of charging stations for electric vehicles, although there is an additional cost, is worth it, because the rental value will increase and the price of parking also, moreover with the current policy, aids are possible and it is a growing market that tends to continue to develop.

The advantages

Low-cost investment: Even though parking prices vary greatly from place to place, the ticket to becoming a property owner is much lower

In areas where the pressure on parking is less, outdoor parking can be found for tens of thousands of euros. 

It will cost about forty-five thousand euros in the most popular places in the capital, such as Paris 7th or 16th. 
For example, the average price to buy one is €9,253 in Nîmes and €46,105 in the 16th arrondissement.

Low charges: If the apartment is in co-ownership, it will be necessary to pay charges that will remain minimal (generally less than 20 euros), because the directors' fees represented by the lot are also low.   

Tax-advantaged: Income taxation is generally reduced.
Rental rents are generally considered property income.

If they do not exceed fifteen thousand euros per year, you can choose the 30% allowance with the micro-land regime, and if your actual expenses are greater than 30% of your income, then better to choose the  real regime.

From fifteen thousand euros of annual income, it is the actual tax regime that applies.

Rental income is sometimes considered as industrial and commercial profits. 
This is the case when the rent includes services such as babysitting. 

In this case, the owner will be able to benefit from the micro BIC device if the rental income does not exceed € 32,900.  
Thereafter, a 50% reduction will be applied before taxation. 
If the threshold of micro BIC mode is exceeded, then it is the real mode.
Regarding the housing tax, not all car parks are subject to its payment. 

When the parking is more than a thousand meters from your home, you will not be taxed. 
If the parking is accessory to the main residence, the property tax will be due, but its value will be deducted when calculating this tax.

Nota Bene: VAT is applicable for rental with a rate of 19.6% 

The great secret to long-term investment success is to avoid serious and permanent losses.
Warren Buffett

Key points

  1. In France, the average profitability for this type of product is 5,8 %,
  2. Investing in a car park is a cheap, low-cost and fiscally interesting project,
  3. The transfer costs for the purchase of a parking space not connected to the main residence are high, about 20% of the price of the property, which is why the purchase of lots makes the acquisition more attractive, because the higher the price, the lower the taxation.
Co-written by Julien Padjeu and Alex Beauvais

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Posted on 03/12/2022 by

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