The Costs of Running a Gite in France: Can You Make a Profit?

 

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The Costs of Running a Gite in France: Can You Make a Profit?

With all these ‘move abroad and make a new life in France’ programmes and articles, setting up a French gite as a form of income is made to look like a simple and easy way to generate earnings. But is this really the case? Let’s take a closer look.

Costs Involved in Running a Gite

Costs largely depend on the location of your gite, its size, and the standards you set for your business. A ‘one-size-fits-all’ model is virtually impossible. That said, the following information is food for thought and arguably a strong starting point to begin to decipher your potential costs, especially if you are setting up a business from scratch.

If you are buying an established business, ask to see the books. It might be wise to ask questions and ask about the current owners’ maintenance and repair programme too.

Monthly and Annual Running Costs

Many of the expected running costs of owning a property will also apply to your gite.

Cotisations foncieres entreprises OR Tax d’habitation

Annual property taxes and business taxes will vary depending on whether the gite is LMP or LMNP, i.e. Professional or non-professional, depending on turnover. Also, the department in which the gite is situated in, as taxes vary from location to location.

Social Charges or Annual Tax Return Declaration

Social charges and income tax must be paid on all income generated, depending on your individual financial circumstances and professional or non-professional status.

Insurance

Insurance separate from your main residence is required – a special policy will be needed to cover your property as a gite and your guests as a public business.

Electricity

Do not underestimate this as a real cost. Consider how you might lower electricity costs with energy-saving measures – replace an electric hob with a gas version, install eco lightbulbs, take out electric kettles, insulate, etc. This will be both a positive step for the environment and for your pocket.

Watch out for off-season rates, too. Renters often expect cheaper rates in winter as it is considered ‘off-season’, but when two people can run up electricity bills nearing 300 euros a month in winter, you need to price your rates with careful thought if you wish to open outside of the summer months.

Read our guide to Electricity in Your French Property: Energy Providers, Tariffs, and Fittings

Gas

As above, if mains gas. If bottled gas, work out how long a bottle may last and how many you will need per year. Read our guide to Gas in your French Property: Mains Gas, Gas Tanks and Bottled Gas

Water

Factor water costs into your rental charges, and monitor your bills to keep an eye out for leaks too. Read our guide to Water Supply and Drainage at Your French Property

Central heating boilers, chimney sweeping and wood

It is usually an insurance requirement that chimneys are swept annually by a registered professional. Central heating boilers should be annually serviced too. Be sure to also calculate the costs of fioul or wood if applicable – fioul can be expensive, and a winter rental may use as much as five cubic metres or more of wood depending on outdoor temperatures.

Read our guide to Options for Heating your House in France

Cleaning Costs

Bedding, towels, tea towels and bath-mats will need to be washed, dried, and ironed between guests. Quilts need regular dry cleaning and normally do not fit in a standard washer. Pillow, mattress and quilt protectors will need replacing periodically.

Additional extras

If you provide cleaning products, dishcloths, toilet rolls, kitchen rolls, washing-up liquid, etc., for guests, all of these costs should be factored into your budget

Maintaining Your Gite

Maintenance needs can be a large expense, both short and long term.

General Maintenance – Indoors

Decorating needs at very least ‘touching up’ every year and a full decoration every two years in high-traffic areas and depending on how often your gite is rented out. Longer-term rentals inevitably mean increased wear and tear on all items, which is an additional cost to consider.

Take into account all the monthly or annual charges for general maintenance. For example, carpets/rugs/doormats will need cleaning or replacing; tablecloths will need washing, cleaning, and replacing. Beds, chairs, and other furniture may be broken or become worn. It’s a good idea to have replacement plugs, taps, and toilet seats to hand.

General Maintenance – Outdoors

Consider maintenance requirements outdoors, too. For example, roofs will need to be checked, shutters will need repairing and repainting, outside walls will need repainting, gravel drives will need to be topped up, outdoor gates and furniture will need maintaining or repainting, weeding and gardening will need to be done regularly, and play areas/playground items will need to be checked for safety and replaced periodically.

Outdoor Furniture

Wooden garden furniture needs annual maintenance and needs to be sturdy enough to last more than a couple of seasons. Metal furniture will rust and may need annual painting. Plastic sunbeds often become broken and need replacing as plastic can deteriorate in the sun. Parasols, if left unattended by guests, can easily become broken by a gust of wind. All of the above are relatively expensive to replace regularly, so do give thought to your own setting and guest rules.

Plants and Flowers

Annual bedding plants for pots and baskets make for an attractive, welcoming gite. Year-round planting helps lower the temperatures associated with paved or walled areas, too and can avoid flood issues.

Fire Checks and Alarms

Fire Extinguishers, smoke alarms, carbon monoxide alarms, and fire blankets should all be provided. It is advisable to pay a recognised company to do a fire check and provide extinguishers suitable to each gite. These will be checked and replaced annually. Alarms need to be bought, regularly checked, and batteries replaced.

Swimming Pool

Running a pool includes the cost of chlorine, salt, and cleaning products, water costs to top-up (which may be a weekly task in high season), plus ARS (Agence Regonale de Sante) fees if required. Outdoor showers, footbaths, sunbeds, and parasols also need to be maintained.

Business Costs & Improvements

You’ll also want to consider the costs of promoting and improving your gite business in France.

Advertising

If using well-known Online Travel Agency platforms, remember to raise your prices to account for their costly commission – sometimes nearing 20%. If you pay a set fee to a company or companies, keep track as costs can accumulate. Read our guide to Marketing Your Gite Business in France: Top Tips

Classification Costs

If you wish to have your gite classified, do your research as prices vary. This is a once-every five-year cost. Read our guide to Gite Classification in France: How & Why to Classify Your Gite

Signage

The public need to be able to find you, and signs are pretty important. Check with your Maire, as ‘Panneaux sauvage’ (home-made signs) are usually not welcomed.

Website

Hosting costs and, if you wish to employ a web designer, annual fees for their work.

Changeovers and Gite Management

If you employ staff to assist with changeovers, gardening, or management of your property in any way, do make sure they are registered and fully insured. This also applies to swimming pool maintenance companies – ensure the company is registered, insured and comes recommended. As a guide, an average three-bedroomed property can take 4 hours or more to clean depending on how it has been left, so it may or may not be cost-effective to hire a professional company to take care of these changeovers.

Modernisation

Appliances and furniture will eventually need replacing – fridge seals deteriorate, bed legs may snap, settees need updating, etc., and these should be factored into your long-term business budget. Feedback from your guests may determine areas of improvement you wish to make.

Ecologically Friendly Measures

Installation of shutters, insulation, water butts, composters, gravelled or garden areas, water reducers on taps, smaller flush toilet cisterns, showers, reduction of plastics, etc., may help make savings further down the line.

Welcome Packs for Guests

Some owners do not offer a welcome pack at all; others leave a simple bottle of wine, while others might leave a hamper of local produce. Whatever you decide, the costs need to be factored in.

Your French Gite: How to Calculate Your Running Costs

Clearly, this list is not exhaustive. Once you have done your own sums, it may become apparent that profit margins are tight. By far the greatest expense can be electricity. The general state of the building is also a factor as if you need to install double glazing, shutters, heating systems, reroof and so forth, this can be very costly, although there may be property renovation grants available to offset some expense.

As an owner, it is prudent to consider where the business can save money to increase profit and where money needs to be spent in order to generate income.

A rough ‘guestimate’ of the above-listed expenses could be in the region upwards of 14,000 euros per annum based on three gites, open all year-round in rural France.

Can You Make a Profit on Your Gite Business?

Given the figures, it is reasonable to argue that three gites could be required as a minimum in order to make a decent profit in rural areas, although this does vary according to location and according to the target market of the business and of course, as to how often the business is open.

With peak season as a bare minimum being eight weeks in summer, consider weekly rates and the likelihood of being fully booked based on past records.

Coastal and mountain locations are tourist hotspots and are often fully booked a year in advance but also lookout for a gite in close proximity to tourist attractions – this can ensure almost year-round trade.

Profit is unlikely to simply fall into your lap, but profits can be made with careful planning. Good luck with your business!

Ready to Start Your French Gite Business?

From purchasing your French property to setting up your business—FrenchEntrée is here to help. Our Running a Gite zone has everything you need to know about being a gite owner from setting up your Gite Business to welcoming your first guests.

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Carol, a teacher from Hurworth in Darlington, lives in Charente in South-West France, where she runs La Grue Gites with her family.

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