Retirement requires training, especially financial. Because it often means a drop in income. Meilleurs Agents, which specializes in online valuation, provides an overview of possible real estate solutions for future retirees with cities where it is most interesting to invest.
Become an owner before retirement
Housing is the main source of expenditure for French households. “On average, retirement income decreases by 27%, increasing the weight of rent in the budget,” – said in a study Meilleurs Agents.
The first decision: to become the owner of the house before retirement. An option that allows you to protect yourself from increasing the rate of effort, ie the weight of the cost of housing from income.
The study shows an example of a middle-income couple who bought a 61 m2 house in 2002 with a 20-year loan and a 33% cost-benefit ratio. After 20 years of retirement, their incomes have increased by an average of 63%. This increase allows to increase the level of their efforts to 20% on average in the year before retirement.
“As soon as the pension comes and the loan is repaid, the cost of housing becomes zero. Conversely, when choosing a rent and an identical area of 61 m2, a household would have to pay an average monthly rent of € 832 today in France’s 51 largest city, an effort rate of 28%. The latter can only increase with the loss of income caused by retirement. Buying seems like a smarter decision than renting, ”says Barbara Castillo Rico, head of economic research at Meilleurs Agents.
In Mulhouse, for example, the pre-retirement effort is 33% for tenants versus 24% for landlords.
Lyon, Villarban, Strasbourg… Achieving significant added value
In 20 years, prices in the 51 largest cities in France jumped by an average of 172%. A couple who bought a house on credit in 2002 could receive a net capital gain of an average of 133,111 euros.
Among the cities where net capital gains are the highest in 20 years, Lyon topped the ranking with + 279%. The net increase in capital is almost 260,000 euros. In the top 5 we find Bordeaux (almost 246,000 euros net capital gain), Paris (233,663 euros), Villarban (201,268 euros) and Merignac (194,354 euros).
The city of Strasbourg also reported a good net increase in capital over 20 years of 108,319 euros.
Make an investment in rent
If the investment in the lease is self-financing, it allows you to get a rent, which after the loan can supplement the pension for years of service.
By investing in a 20 m2 studio that is self-financing for 10 years before retirement, a household will be able to earn an additional net average monthly income of € 235 in France’s 51 largest cities at the time of retirement. , believes. The best agents.
However, this type of real estate transaction in major cities in France requires an average of 55,221 euros.
Saint-Etienne, Limoges, Metz… Investing with a small contribution to prepare for retirement
Some cities offer real opportunities, such as Saint-Etienne, where by investing in a self-financing studio for 10 years before retirement and without an advance payment (a loan that covers more than the value of real estate), the household will be able to get a monthly net income in in the amount of 151 euros as a supplement to the pension. In Mecca, the contribution will be 6,527 euros and the net monthly income is 182 euros.
Other cities show net monthly income from such investments: Grenoble (191 euros for a contribution of 20,110 euros), Nancy (187 euros for a contribution of 11,500 euros), Colmar (180 euros for a contribution of 8,241 euros), Dijon 170 euros for a contribution of 17,464 euros), Besançon (168 euros for a contribution of 12,328 euros) and Avignon (178 euros for a contribution of 11,432 euros).
“However, be careful about the risks of renting space and depreciating real estate, even if they remain low in mainland France,” recalls Meilleurs Agents.