What is an SCPI?
An SCPI (Société Civile de Placement Immobilier) is a collective investment scheme that collects funds from numerous investors with the aim of acquiring and managing real estate assets for rental.
Simply put, when you invest in an SCPI, you become the owner of a share of the real estate assets held by the SCPI. In return, you receive dividends (monthly or quarterly) which come from the rents generated by the SCPI’s real estate properties.
Many people invest in SCPIs due to inflation, which leads to an increase in rents and thus automatically an increase in returns for the SCPI unit investor.
How Does an SCPI Work?
An SCPI is created and managed by a management company. It sells SCPI units to individuals or through intermediaries such as banks and subsequently invests the collected funds in the acquisition of several real estate properties. Its role will be to find tenants, conduct property inspections, and ensure the payment of income to investors in the form of dividends.
How to Invest in an SCPI?
To invest in an SCPI, you must acquire one (or more) units of the company’s capital. Our advisors help you select the SCPIs suited to your profile. It will be necessary to define the initial payment as well as the monthly payments that will be integrated into the overall strategy.
Characteristics of an SCPI
The characteristics of an SCPI reflect those of real estate, namely entry fees between 10% and 12% and a waiting period for income between one and six months.
There are two major types of fees when you decide to invest in an SCPI:
- Subscription fees: these are calculated on the unit price at entry and applied upon exit.
- Management fees (annual or quarterly): generally between 8% and 12%, they are used to remunerate the management company. These fees are directly deducted from rental income. As an investor, you directly receive your net income.
Advantages of Investing in an SCPI
One of the major advantages is that it is accessible to everyone, as it does not require a large capital investment. SCPIs allow you to invest in real estate without having to worry about rental management, maintenance, insurance, regulations, and especially the time required for property management.
Furthermore, it is a good way to diversify your investments across several types of real estate (commercial, healthcare, office, hospitality, etc.). Diversification is also geographical, as our selection is internationally located, which reduces the risk of fluctuation. Average returns range between 4% and 6% per year.
Please note: dividends are subject to income tax, therefore, they must be declared as property income.
Conclusion
SCPIs are an integral part of wealth management strategy, providing a very good risk/return ratio that has delighted our clients for over twenty years.
We are available to assist you with your investment project.