With prices rising by 5.8% in June, inflation has become a priority for the French. Inflation reduces the purchasing power of our compatriots, the latter are puzzled where to invest to increase their incomes. Among the interesting ways to invest your money in a period of inflation is the purchase of shares of civil investment companies in the field of real estate (SCPI). Is investing in SCPI productivity a good decision in a period of inflation? This is what we are going to analyze.
Where should you not invest money during inflation?
Booklet A is currently earning 1% per year. With inflation rising by 5.8% over the past twelve months, the savings account’s loss of purchasing power has reached 4.8%. That is why it is necessary to keep the minimum in your Booklet A, in this case about two to three months of income, and invest the surplus in other more profitable investments.
- About life insurance contracts in European funds
Life insurance contracts in Eurofunds in 2021 gave an average of only 1.1% to their owners. This leads to a loss of purchasing power by 4.7%. In addition, life insurance contracts in Eurofunds are not the best vehicle for investing in times of inflation.
Why should you invest in real estate during inflation?
- Because the rent is indexed to inflation
Indexation of rent to inflation allows real estate investors not to lose purchasing power. Thus, rent indexation is an insurance against inflation.
- Because real estate is a solid value
Unlike stocks or bonds, real estate is built on rock, that is, on strength. The value of stocks and bonds can fall sharply or be reduced to nothing, which cannot be said for real estate.
As explained Lionel Benamuone of the founding partners Central SKPI (www.centraledesscpi.com), the first French digital savings network:
“Clients who call us 01.44.56.00.23 are aware of the risks to their purchasing power. That is why they prefer to invest in performing SCPIs to earn excellent returns. »
What are the benefits of investing your money in SCPI during periods of inflation?
- The best SCPIs earn more than inflation
The best SCPIs yield about 6% net income per year. This efficiency allows partners who own SCPI units not to lose purchasing power, unlike owners of Livret A savings accounts or life insurance policies in Eurofunds.
- Yield SCPI are pooled savings products
By investing your money in SCPI performance stocks, you can buy offices, retail space, business premises, warehouses, healthcare and education related properties, hotels and tourism properties.
Income SCPIs also offer the opportunity to invest in residential property so that you are not dependent on a single tenant, as is the case when you only have one rental apartment.
- SCPI yields are geographically attractive
Instead of investing in real estate only in France, by buying shares in European yield SCPIs, which are among the best SCPIs, you can invest your money in the Eurozone or the rest of the European continent.
In addition to increasing geographic consolidation, European SCPIs are tax efficient as their dividends are not subject to social security contributions in respect of rents collected outside France.
- Yield SCPI can be purchased on credit
As with real estate held directly, it is possible to invest in SCPI performance in credit. Knowing that interest rates are fixed, the outstanding capital will decrease month after month during inflation.
How to invest in SCPI during inflation?
- SCPI specialists should be consulted
Since SCPI’s stock price is the same regardless of the distribution channel, investing only in SCPI’s income does not make sense, especially since it is easy to make the wrong SCPI selection.
Some contributors find it sufficient to read all of SCPI’s annual reports as well as all of their newsletters and run SCPI simulations. However, it is not possible to read all this documentation in isolation, and it is not possible to run several hundred simulations like the SCPI specialists do.
- You must pass Central SKPI
Central SKPI (www.centraledesscpi.com/ 01.44.56.00.23) is the first SCPI comparator on the market and the inventor of SCPI-SIGN, an electronic signature software for buying SCPI shares online.
As noted Laurent Fagesmanager within Central SKPI :
“In addition to the free services we provide to our clients, we are best placed to create customized SCPI portfolios for our clients ranging from a few thousand euros to several million euros. »
Inflation affects all French people, especially the most modest. As prices continue to rise over the next few quarters, we must now take the initiative to avoid this. The best investment during inflation is SCPI performance, you should feel free to invest around 20% of your assets there.
However, in order not to make a mistake in choosing SCPI, it is easiest to seek advice from SCPI specialists, for example, to Central SKPI (www.centraledesscpi.com/ 01.44.56.00.23), the leading SCPI stock distribution site online.
Inflation and purchasing power do not mix. This is why you should not put your money in book A and life insurance contract in Euro funds. Preference should be given to purchasing SCPI returns, the best means of saving and increasing its purchasing power.
Investing in SCPI is not guaranteed both in terms of dividends received and capital preservation. SCPIs are subject to fluctuations in real estate markets.
Before making any decision to purchase SCPI shares, please seek professional advice to ensure that this investment fits your asset profile.
Finally, as with any real estate investment, consider the fact that SCPI is a long-term investment with a minimum holding period of no less than eight years.
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