Real Estate Investment Companies (REIC), commonly known as "paper stone," are attracting a growing number of investors in France. These investments allow for indirect real estate investment while pooling risks and returns. But how do they work exactly? What are their advantages? And why is it wise to seek investment advice before investing? Here’s an overview of this investment and wealth management tool.
How do REIC work?
A REIC (Real Estate Investment Companies) collects funds from individuals to acquire and manage a diverse portfolio of real estate assets. These properties, typically for commercial use such as offices or shops, generate rental income which is redistributed to shareholders in the form of dividends.
The process is based on three key elements :
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Fundraising: Investors purchase shares of the REIC.
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Property Management : The management company handles the acquisition, rental, and maintenance of the properties.
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Redistribution : The rents collected are distributed among the shareholders after the management fees are deducted.
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The benefits of REIC.
The advantages of REIC
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Accessibility
Unlike traditional real estate investments, REICs allow you to invest with just a few hundred euros, making real estate accessible to a larger number of people.
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Risk Diversification
Investing in multiple properties spread across different geographic or economic areas helps to pool the risk. The rental vacancy of one property is offset by income from other properties.
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Delegated Management
The management is entrusted to professionals: property search, maintenance, tenant management. You receive rental income without the management responsibilities.
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Attractive Performance
REICs often offer returns higher than many financial products, usually between 4% and 6% gross per year.
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Flexibility
Shares can be purchased with cash or credit, and some REICs allow investment through life insurance contracts or retirement savings plans (RSP).
Why go through a professional ?
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Tailored Support
An investment advisor helps you choose the REIC that aligns with your financial goals, whether it’s generating additional income, building wealth, or optimizing taxes.
2. In-depth Expertise
With a wide range of REICs available, a financial strategies expert masters the intricacies of
these products to guide you toward the most performant ones.
3. Precious Time Savings
Analyzing REICs is time-consuming: by delegating this task to a professional, you can focus on your
priorities while benefiting from an informed choice.
4. A Comprehensive View of Your Assets
A wealth advisor evaluates your entire situation (real estate, savings, taxes) to integrate REICs into
your overall strategy.
5. Tax Optimization
Certain types of REICs offer tax advantages. A professional guides you to maximize these
opportunities, especially through tax-efficient REICs (Pinel, Malraux, property tax deficits).
Conclusion: Choose peace of mind.
Investing in REIC (Real Estate Investment Trusts) is an effective financial strategy to diversify your assets and generate passive income. However, to fully benefit from their advantages, it is highly recommended to be accompanied by a wealth management professional. With their expertise, you will receive personalized advice tailored to your financial needs and goals.