Different types of assets for a long-term investment

If you own a property in addition to your main residence, don't leave your property at the mercy of wear and tear, use it to make your fortune grow. Whether you are renting out or investing in shares, real estate investment is one of those investments that pay off in the long term.

Real estate investment

The property can be either a room (house, apartment, studio) or a plot of usable land. To decide to make a real estate investment is to buy a property and to exploit it by renting it out. The future real estate investor has the choice between three modes of investment on this type of property:

Investing his money to buy and rent his property in order to obtain a periodic annuity, this is rental real estate,
Becoming a shareholder in a real estate company by subscribing for shares in a company such as an investment fund.
Take advantage of a tax exemption programme through real estate investment.

The advantages and disadvantages of real estate investment

Real estate is durable over time, it is a heritage that is passed on from generation to generation. The monthly rent obtained from renting out the property allows the owner to recover his initial capital invested and to obtain an excess of cash that he can save. Nevertheless, the capital invested in this type of payment reaches several thousand euros and the factors of unpaid rent or falling real estate market prices are never to be ruled out. Contrary to deposit boxes (savings books or life insurance in euro funds) which allow the subscriber to benefit from cash at any time, selling a property, finding a tenant quickly, demanding the payment of rent in order to obtain cash that is available quickly is difficult and time-consuming.

Real estate investment or stock market investment?

Investing in the stock market is a high-risk asset, but one that pays a lot more money over the long term compared to other investments. Nevertheless, although real estate investment is not immune to more or less favourable market cycles, it is less exposed than stock market investment to financial crises and economic uncertainties. Real estate investment or financial investment, each has its advantage, the best recommendation to make to future investors is to make a careful study of the current market and to anticipate the future trend before deciding to make any investment.

The best strategies to invest for the long term

Profitable long-term investments

All investors, regardless of their profile (prudent, dynamic or balanced), are looking for the ideal investment. The one that combines profitability, interest and security, with, if possible, a tax advantage. At the risk of disappointing, such an investment does not exist.

This is a criterion that should be taken into serious consideration when investing, because it is the product’s lifespan (also called “maturity”) that determines the success of your project. In other words, you should base the horizon of your financial objective on that of your product.

All the experts say it: it is the basis of every successful investment and it is pure logic. If you invest the same amount in 4 different companies as one of them files for bankruptcy, you will lose 25% of the invested capital. The risk is even higher if you concentrate your investment on a single sector (luxury, gold, oil, etc.).