Real estate: is now the right time to invest?
Worried about the economic climate?
"Current rates are returning to historically standard levels."
Yes, the real estate market, particularly in the Paris region, is currently going through a transition period marked by rising interest rates and stricter lending criteria. However, it is worth remembering that current rates are simply returning to historically standard levels. Furthermore, the Paris real estate sector remains a robust and dynamic market. While higher, rising interest rates have not completely stifled the demand for property—especially in the market where Kyka operates. Here is the full breakdown.
High interest rates: forget that excuse!
First: when you invest in a property that needs renovation, you create value. By investing in upgrades and improving the quality of a property, you increase its market value. Consequently, the profits generated by this appreciation will offset the higher interest costs incurred over the life of the project.
Second: as we mentioned, Paris and its suburbs remain a dynamic market with sustained demand. Simply put, there will always be buyers, especially for properties that have been refurbished and are move-in ready. Since these are a rare commodity in the real estate market, buyers are willing to pay a premium, which again compensates for the higher interest rates at the start of the project.
Third: when your goal is to build your real estate portfolio, you buy, renovate, and sell within 2 or 3 years. In this context, a higher rate is negligible and is easily offset by the capital gains created.
Opportunities to seize
"Regardless of the market climate, these properties are often cheaper or negotiable."
The downside of properties that need renovation is that they actually need to be renovated—obviously. The advantage of working with Kyka is that we manage the project from A to Z, and we know how to spot properties with high potential. Regardless of the market climate, these properties are often cheaper or negotiable.
These apartments offer significant potential for improving energy performance. When you undertake a complete renovation, you naturally address energy efficiency by insulating walls, replacing windows if necessary, and installing a more efficient, low-consumption heating system. Your future home becomes more energy-efficient, helping you reduce your monthly utility bills. As more people become conscious of eco-friendly solutions, the added value created will be a major asset when it comes time to resell.
Now is the time to get started
By starting early, you begin building your real estate portfolio. You might start with a 30m² apartment, but it is best to do that while you are young and without children! By selling and buying again as you move through life, you will be able to acquire larger properties that match your needs and your lifestyle.
You benefit from the leverage of a mortgage. Loans allow you to buy a property using the bank's money (pretty great, right?). You also invest a portion of your own capital, and when you sell with the generous profit generated by the renovation, your gains are based on the total value of the property, not just your initial investment. You will then be able to buy something larger because your down payment will have grown.
You will learn as you go! The sooner you get started with buying and selling real estate, the more experience you will gain and the more familiar you will become with the various aspects of the market. This is invaluable experience for your future projects and will help you make informed decisions (and if you still need us, you know where to find us!).
Are you convinced? Then don't wait any longer—book an appointment with one of our Maison Kyka experts.
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