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Renting your new property in France

Many overseas buyers choose to defray the costs of running their new purchase by renting. Most of the expenses in running a property including electricity bills, local taxes and service charges can often be covered by letting a property out for just a few months in the summer. An increasing amount of UK buyers are purchasing for investment only, hoping to rent their property for up to 30 weeks a year. There are numerous rental agencies on the Cote d'Azur but it always pays to be wise in the rental market.

Rental insurance can be taken out from most French home insurers. The potential costs if a rental client breaks a leg or sets fire to your kitchen could be insurmountable so it pays to have it. A premium for third party injury and damage costs around 50% more than your normal annual premium, but a small price to pay for peace of mind.

The short term letting market is far more profitable than the long-term market. Taking Nice as an example, the value of a weekly holiday rental is about the same income you would get from a long-term rent for a month ie. four times the value. Renting short-term also means that the owners can use the apartment when they want to.

The Internet is a great place to advertise a rental property. Experience from TotallyRiviera's Nice clients has shown that an advert on the www.holiday-rentals.com website is worth way more than a week's advert in The Sunday Times classifieds and costs exactly the same. The aforementioned website is Europe's most popular for short term holiday rentals. It's simple to use, you can upload selected dates when your apartment is already booked and upload a least six to ten photos of your rental property. You can even choose to receive an SMS message when a potential client emails you. Those not wanting to manage their own property can just as easily put their rental agents email address and telephone number in the contact box instead of their own. The www.ownersdirect.co.uk Internet site is similarly good at attracting rental clients, particularly the British market. For managed rentals in Nice we recommend Nice Pebbles and their sister site Riviera Pebbles.

Getting you own Internet site is another good idea. Web designers can easily be found, although there are several free website creation programs for free on the Internet. You can put the address of your site on business cards, on the bottom of your emails or tell the world about it verbally. Some investors advertise the website of their place in France in their local Post Office or place of work.

Certain areas of the Riviera have longer rental seasons that others, something to bear in mind for those wanting a year-round return on investment. Although the South of France isn't the Costa Brava, the frequency of flights and sunlight hours still decreases into Christmas. The charm and high owner occupation of towns like Antibes, Menton and Villefranche keeps rental periods high. The city buzz and huge amount of out-of-season conventions keeps Nice, Monaco and Cannes buzzing year round, with plenty of opportunity for rental.

Finally, make sure that your apartment is the best place your renter has ever stayed in. Repeat custom, according to TotallyRiviera's buyers, is the biggest and best source of advertising. Happy clients will come back year after year if they love the place and will tell everyone they know. Use the personal touch - supply leaflets to tourist destinations, maps of the region, a small selection of books and even make a list of taxi numbers and train times. You must present your apartment in its best possible light for the long-term success of the return on your investment.

RENTAL FUNDEMENTALS - AUGUST 2011

There are just a couple of fundamentals about the rental market that must be understood before you do to much more - although they are fairly obvious I think it's best to have as much information as possible.

Long term Rental versus Short Term Rental.
An average two bedroom apartment in the good investment area and in good rental condition will gross around 850 to 900 euros a week to the short term holiday market. Long term rental for the same property, rented to a French national will gross about 900 to 1,000 a month. The standard contract is for three years. So you can see there is vast difference between short and long term. But of course in long term rental the management fees and much less and if you get a good tenant it's rent and forget. Also long term rental gives you the flexibility of buying in slightly cheaper areas, as the local population care less about being near the beach or restaurants.

As distant landlords I think the best property for you would be long term rental to French residents (see below - Rental yield predictions) Although the holiday rental market is very lucrative - the actual geographic area you have to buy your property in to attract holiday makers is quite small and of course expensive (10 minute walk to the beach maximum, 15 minute walk to Old Town Maximum). Also the major management companies will take about 25 to 30 percent of your income to manage a holiday rental (cleaning, linen washing after every client, meet and greet etc)


Equity Growth

You are right about equity growth - Growth in France is famed as a solid and reliable bet. Being a stable western democracy, equity growth in France is not going to massive, but the Riviera has outperformed the rest of France (neck and neck with Paris) to see substantial rises over the last 20 years.

The highest returns can often be found in city property, particularly in Paris. Meanwhile, carefully selected property in tourist resorts continues to offer healthy returns. Investors are now looking for new places within France in which to capitalize on mini emerging markets, such as areas in and around Montpelier, Nice and along the Atlantic Coast, where improved accessibility and affordable prices are enticing tourists and investors to these areas, while indications suggest it is here that the greatest amount of capital growth from the tourist market will be experienced. The Riviera cities are outperforming many of these areas because of the opening up of Europe by the growth of cut-price airlines - with up to 45 flights a day into the international airport at Nice from just the UK.

Rental Yield Predictions

France has a deeply embedded rental culture and large towns and cities offer high rental quality and investment opportunity. The vast majority of the French population rent their homes and this factor, along with a powerful tourist industry, makes for an ideal rental market. Due to popular demand, prices are increasing and investors are currently experiencing net rental yields of approximately 7%.


The FInal Word.

1. Safest place in the world to buy property due to the rigorous buying process and protective legal system

2. Capital increases have been very healthy in France over the last five years with 100% capital increases in property in many locations across the country and average growth of 10% in 2005 (source FNAIM)

3. A proven and existing exit strategy: Unlike any other tourist destination France does not rely on foreigners for investment in their property as 95% of property sales are to French residents who constantly purchase holiday or permanent accommodation. This means there is a proven resale market when the time comes to sell up and cash in on your investment

4. All your costs including your mortgage can be set against your rental income so that a very minimal amount of tax is actually paid.

5. Riviera has excellent international transport links with flights to all major European cities and direct flights to New York and Dubai.

6. Rock solid rental yields.