Investing in a French village house
With attractive properties, pretty villages, fabulous food and wine, an enviable lifestyle and (in most parts) a clement climate, France is hard to beat. Owning a holiday home here can be not just delightful but also a smart financial move, provided you take a businesslike approach.
Overseas visitors love what the French call ‘vieilles pierres’ – stone-built period properties with character, located in rural settings. This style of property often comes with outbuildings to renovate, providing extra accommodation and a potential business opportunity for those tempted to enter the holiday lettings market.
Quality of build is generally very good (older country properties are usually solidly constructed), while the size and diversity of France means that there are bricks and mortar at price points to suit all pockets. Naturally, your budget will go further in a lesser-known location, but to maximise rental potential, your French home needs to be accessible (ideally in or on the outskirts of a village, and not more than an hour’s drive from an airport).
The area in which you buy and the type of property you can expect to find are inextricably linked; head north to Normandy for half-timbered farmhouses or south to sunny Languedoc- Roussillon if winemakers’ houses are more your bag.
Taking the first stepCharacter homes have charm, but they invariably need repairs and maintenance. If you are set on restoring a ruin, calculate your budget with care; as a rough guide, take the purchase price and be prepared to spend between half and the same again on renovation and repairs.
French mortgages are not dependent on structural surveys and very few French buyers bother with this step, preferring to rely on the opinion of a friendly builder. Ensure that foundations and floors, walls and roof, wiring, heating, insulation, septic tanks, mains drainage, water and gas supplies are carefully checked, and estimate the cost of rectifying any of these.
Money mattersPrices shown by estate agents generally include their commission; allow 8-10% on top for the conveyancing and notaire’s fees. You can get an ‘in principle’ mortgage quotation from many lenders; if you intend taking out a French mortgage, the lender is obliged to ensure that you are financially able to meet your repayments, and you will be asked for proof of income plus payslips or business accounts.
Two types of local tax are payable by French property owners. Taxe foncière is a land tax, paid regardless of whether you reside in France or not, while taxe d’habitation is a residential tax paid by the occupier and calculated on the basis of rental value and income. You may also be liable for French income tax if you let out your French home, so it can pay to consult a financial advisor before you take the plunge.
Rental potentialWant to turn your French home into a money spinner? The French holiday rentals market is highly competitive, so a solid business plan and proactive marketing are essential. Letting out for 12 weeks is an optimistic forecast; 20 weeks would be outstanding, and only achievable in the south where the climate makes for a longer rentals season.
Outside space is essential, and a pool boosts the rentability factor. What you can charge will depend on your property’s size, spec, location, access and amenities; your profits will be whatever is left over after advertising, changeovers, caretaking, repairs and maintenance. Good transport links and proximity to amenities will improve your chances.
Greg Taylor is co-founder of Languedoc property site www.creme-de-languedoc.com