Retirement requires preparation, especially financially. Because often it means a drop in income. Meilleurs Agents, specializing in online valuation, provides an overview of possible real estate solutions for future retirees with the cities where it is most interesting to invest.
Become an owner before retirement
Housing is the main item of expenditure for French households. “On average, income decreases by 27% during retirement, increasing the weight of rent in the budget”, underlines the study by Meilleurs Agents.
First solution: become the owner of your home before retiring. An option which makes it possible to guard against the increase in the rate of effort, that is to say the weight of the cost of housing on income.
The study gives the example of a couple with median incomes who bought a 61 m² home in 2002 with a 20-year loan and a cost-benefit ratio of 33%. Twenty years later, when they retire, their income has increased by an average of 63%. This increase allows their rate of effort to increase to 20% on average one year before their retirement.
“Once retirement comes and the loan is repaid, the cost of housing becomes zero. Conversely, by choosing to rent and for an identical area of 61 m², the household should pay a monthly rent of €832 on average to date in the 51 largest cities in France, i.e. an effort rate by 28%. The latter can only increase with the loss of income induced by retirement. Buying appears to be a clearly more sensible solution than renting,” analyzes Barbara Castillo Rico, head of economic studies at Meilleurs Agents.
In Mulhouse, for example, the rate of effort, one year before retirement, is 33% for tenants against 24% for owners.
Lyon, Villeurbanne, Strasbourg… Achieving significant added value
In 20 years, prices have jumped 172% on average in the 51 largest cities in France. A couple who bought a home on credit in 2002 can realize a net capital gain of €133,111 on average.
Among the cities where the net capital gain is the highest in 20 years, Lyon is at the top of the ranking with + 279%. The net capital gain amounts to nearly €260,000. In the top 5, we then find Bordeaux (nearly €246,000 in net capital gain), Paris (€233,663), Villeurbanne (€201,268) and Mérignac (€194,354).
The city of Strasbourg also posted a nice net capital gain in 20 years of €108,319.
Make a rental investment
If the rental investment is self-financing, it makes it possible to obtain a rent which, at the end of the loan, can supplement a retirement pension.
By investing in a 20 m² studio which is self-financing for the 10 years preceding retirement, a household will thus be able to obtain an additional net average monthly income of €235 in the 51 largest cities in France at the time of retirement. , believes Best Agents.
However, it takes an average contribution of €55,221 for this type of real estate transaction in major French cities.
Saint-Étienne, Limoges, Metz… Investing with a small contribution to prepare for retirement
Some towns present real opportunities, such as Saint-Étienne where, by investing in a self-financing studio for the 10 years preceding retirement and with no down payment (the loan covering more than the value of the property), a household will be able to benefit from a net monthly income of €151 as a pension supplement. In Metz, the contribution will be €6,527 for a net monthly income of €182.
Other cities show net monthly income for such an investment: Grenoble (€191 for a contribution of €20,110), Nancy (€187 for a contribution of €11,500), Colmar (€180 for a contribution of €8,241 €), Dijon (€170 for a contribution of €17,464), Besançon (€168 for a contribution of €12,328) and Avignon (€178 for a contribution of €11,432).
“Beware, however, of the risks of rental vacancy and depreciation of the property, even if they remain low in mainland France”, mentions Meilleurs Agents.