Buy to Let in France
The same basic principles apply to buy to let in France as they do in other countries such as the United States, Ireland and Britain.
Before you purchase a property you need to make sure it’s in the right region, in the right location and has all the necessary facilities and communications.
Above all you need to know your rental market. The sole purpose of you buying the property is so that you can rent it out to cover the mortgage or provide an income. If there is no strong letting market in the area then the whole exercise could be doomed from the start. So you will have to do your homework.
Long or Short
One of the first things to decide is whether you are aiming for long-term residential letting or for holiday lets.
A property aiming for holiday lets clearly needs to be in a place where lots of people want to go on holiday. As France is the most popular tourist destination on the planet, it’s not too hard to find such a region in the country. But you need to be realistic. Just because you enjoy tramping up a remote hillside to a property miles from the nearest sign of civilisation doesn’t mean that everyone else will feel the same.
If you’re going to focus on holiday lets you also need to focus on the length of the letting season – which is considerably shorter in the north of France than the Mediterranean region.
By contrast, longer-term lets depend more on the state of the local economy all year round and on jobs and facilities than on the beach and the weather. The permanent letting market is likely to be a French market so you need to contact local estate agents and letting agents and scour the local newspapers and internet to find out the market potential in your chosen area.
In fact, it can be possible to cater for both types of market.
Ross Husband of RentaplaceinFrance.com says: ‘A popular choice with owners is combining summer holiday rentals with longer term lets in the off-season. A wide range of properties can be suitable for these longer lets.
‘They can include city apartments, town and village houses and rural properties. Installing good communications with telephone and broadband internet access can be important for this market. Suitable heating is essential for winter rentals.’
Another important consideration is the standard of accommodation you are going to offer your tenants.
People’s expectations – especially when it comes to holiday accommodation – are rising all the time.
Managing the Let
For example, facilities such as dishwashers and washing machines are taken for granted. You will need to factor in the cost of buying and replacing furniture and electrical goods when working out the financial viability of your let.
Another major consideration is how you will manage the rental. There are two approaches. You can either manage your rentals yourself, or employ a rental management agency. An agency will deal with everything for you and save you a lot of time and effort. But you have to remember to factor in the cost of commission and fees, which can take up to 30 per cent of your rental income or even more in some cases.
One possibility is to consider letting your property out long-term and unfurnished. Typically such lets run for at least three years. For these lets the transport system near your home can be crucial.
‘Good access to the local workplaces is important as many of these lets are taken on by French workers themselves so remote rural properties are less appealing,’ says Ross Husband.
New development in urban areas are often potentially good prospects for this longer lets. Many French are still used to renting rather than buying – or can’t afford to buy – and often they prefer to live in modern homes that are usually cheaper to heat and maintain.
Then there is the marketing. If you sign up with a letting agency they will help find tenants for you. However if you are managing the property yourself, you will need to consider how to market it. It’s obviously a good idea to have your own website. But competition is stiff and you need to get noticed in the places where people are looking most online. It’s worth knowing that some 50 per cent of holiday search starts online and that figure will only rise.
So even if you are managing the lets yourself you might want to consider signing up with a rentals website that has a high visibility when it comes to search engines.
Of course, if all this sounds like too much trouble for you, there’s always leaseback…
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