It is not easy to decide where it is better to take out a loan or not, particularly when you have sufficient funds. However, it is advantageous to borrow in the real estate sector. Why? Lexpressproperty tells you all you need to know about this subject.
Opportunity Cost
There are many different types of loans, but real estate is the only sector where it is possible to take out a loan without necessarily owing supplementary funds. Moreover, many institutions which offer loans, propose advantageous interest rate. So, no need to blow the kitty!
Interest rates being low, it allows to borrow a large sum to afford a bigger and best-suited property. Quite nice, when it comes to rental investment purposes, when borrowing at low rate while rental yields between 3% and 6%!
Borrowing, a way to secure patrimony
Contrary to preconceived ideas, a loan does weaken patrimony. It rather secures the property for heirs. Indeed, in case of death, the institution that granted the loan has the duty to settle the monthly installments following the insurance taken during the engagement between the two parties. The descendants receive a fully paid property. In addition, if the deceased possessed cash for the investment, the heirs will receive the sum invested in the acquisition of the real estate.
Fiscal Advantage
By making a rental investment, buying on credit minimizes the impact of rents on the amount of tax on income.
As you can note, borrowing has its advantages, and not only to benefit from favorable rates. However, it is better to consider all the parameters involved before taking out a loan, because this matter is so serious.
