Investing in a holiday home in France
A holiday home in France is once again looking like a savvy investment with the economic upturn in Europe and a buoyant pound. But what do you need to know when it comes to turning a profit and avoiding pitfalls when investing in a property across The Channel?
What is your property for?
Are you looking for a holiday home to provide your family and friends with rent-free holiday accommodation while increasing in value?
Do you want a business property, such as self-catering guest accommodation or a private home offering bed and breakfast?
Knowing what you want from your investment property before you start searching will help you narrow your criteria and make finding the right location much easier.
Are you looking to earn money from your holiday home by renting it out?
Do your homework
Buying and letting a holiday home in France should be seen as a long-term investment, i.e. a minimum of five and preferably 10 to 15 years, as you need to recoup on the purchase costs when you sell.
Make sure you plan out and research where you want to advertise your holiday home for rental opportunities early on, so you can start taking bookings as soon as possible.
If you’re buying an existing holiday home in a popular area, make sure you study the average rent yields and growth forecasts for the property in detail and, if you can, connect with and ask other owners in the area what they earn.
If you’re looking at property in an emerging area, make sure you’re au fait with all the upcoming happenings in the locale. Major works nearby could render your holiday home very unattractive to visitors for years to come or devalue a property markedly.
In short, do as much research as you can before you take the plunge.
Play the field
Property prices, visitor numbers and what you can charge in rent, vary wildly across France.
If you’re going to be smart about your property investment, you need to explore France and its many provinces.
For instance, property in the Auvergne is very cheap (a three-bedroom cottage can be as little as £28,000), but visitor numbers are relatively low, especially in the more remote areas.
In contrast, a two-bedroom apartment on the Riviera can be as much as £340,000, but you can be assured of high-numbers of holidaymakers paying premium prices during the holiday season.
Know the law
French law on security of tenure is biased heavily in favour of the tenant.
So, if you’re thinking of letting your property on a longer-term basis, even just outside of holiday season, make sure you’re in the know. You might end up stuck with an unwanted tenant in your property when it comes time to capitalise on the more profitable holidaymakers visiting in the spring and summer.
To cover yourself when traversing the beguiling nooks and crannies that make up the French legal system, get yourself an experienced specialist property lawyer.
Make a letting plan
Ask yourself this question: Will I be able to pay the mortgage if the property is empty and, if so, for how long?
It almost goes without saying, but if you’re going to make money from your property, you’re going to need it full of tenants as often as possible.
Also, be sure to factor in the costs associated with marketing your property when making your annual letting plan.
There are plenty of online letting services these days, which make attracting tenants easier, and also expose your property to a much wider audience than traditional methods.
Good luck and bonne chance!