Many people have the idea of buying a property in France not only for their own use but also to provide an income. If this is your plan it is essential to be realistic about the kind of property that will produce the size of income you are looking for. There are really four ways to make an income from letting property in France.
1. As a bed and breakfast (chambre d’hôtes) holiday business
2. Letting your property as a holiday home when you are not using it
3. Gîte in France
4. A French property for long term letting
None of these are easy ways to make money but some work better than others. However before embarking on buying French property with the notion of making it income producing it is important to consider each option clearly.
Buying An Income Producing Business In France
Firstly consider finances, both the size of your budget and the amount of income you need to produce from the French property. Although France is the most popular holiday destination in the world there is also a lot of holiday accommodation available and if you plan to make a living income from a property you will need to think and buy big. It really isn’t realistic to think that you can live off the income of any less than 4 gîtes and each of these need to be decorated, furnished and equipped to a high standard and the location and photogenic nature of the property are paramount. Healey Fox has several good gîte complexes for sale and most of these will have accounts available so that you can find out what income is currently being made from them. Look at Gite Complex For Sale In France
Alternatively, if you have a large buying budget but don’t want to run a gîte complex you can always consider buying a property to run as a boutique bed and breakfast business or buying a hotel
The other income producing property business that is worth considering is buying properties to let on the local market. Currently there is a real shortage of available rental property in France. This probably means buying a different type of property to that which appeals to the holiday market as there will be a much larger rental market for small town properties than for rural farmhouses in France. You will save on the marketing costs that are involved in holiday letting but there are many different matters to take into account and it is wise to equip yourself with full knowledge of the legal matters concerning the French rental market. You will need to acquaint yourself with tenants rights, the different tax regimes and social charges and is is wise to use a husier to report on the state of property before and after the let and a Notaire to draw up the rental contract. It is likely that you will be letting your property unfurnished and as such you are not required to perform special registration with the tax office in which case you may not have to pay social charges. You can simply report the rental income on your personal income tax return.
For anyone looking for a French property with the possibility of providing a top-up income only then buying a smaller bed and breakfast business or having just one or two gîtes is definitely worth considering. But it is important to be realistic and best not to expect more than 10 weeks a year full occupancy. There are definitely things you can do to attempt to increase this letting but it’s best to ensure that your plan works on the minimum letting weeks you are likely to be guaranteed.
Whatever kind of income producing French property you are buying make sure you consider carefully what the market is looking for! For holiday accommodation a property needs to be somewhere where people want to visit, probably it needs to have a swimming pool or some other outside activity like a boule court, bikes etc and it needs to look attractive and tempting. For long term letting property it too needs to be in the right location, usually where people need to rent for work and it needs to be easy for the tenant to care for.
Things to consider when letting property in France
- Decorate, furnish and equip your properties to a high standard. If people are looking for a really cheap holiday in France they will usually choose to camp, if they decide to stay in a gîte or bed and breakfast expectations of the quality of the accommodation increase every year.
- Ensure that you register your property letting business with the tax authorities and acquaint yourself with the different tax regimes under which you can operate. Basically, the Micro Régime is applicable when rental income is less than €15,000 and a notional deduction of 30% is offset against gross rental income. This is beneficial where your actual costs are lower than 30% of the income (usually if you have not bought the property with mortgage funds). The Real Régime applies if your French rental income is greater than €15,000 or if you choose to opt out of the simplified scheme because your actual expenses exceed 30% of the gross rental. Deciding on which regime is right for you is really important.
- Do not over-promise in your marketing. Whilst it is vital to have really lovely images of the property and it’s surrounds do ensure that the photos you use do not mislead potential holidaymakers. It is always better to under-promise and over deliver. Giving the ‘wow’ factor when you guests arrive is a great way to start the holiday.
- With your photos ready consider how you are going to market the property. There are numerous holiday accommodation companies that you can find on line but you should also consider smaller more focussed and local marketing such as the tourist office in France, maybe something local in the U.K., friends and family, ex. work colleagues etc.
- Contemplate ways to increase the appeal of your property to potential holidaymakers such as offering different activities, foraging, painting, cultural activities, bike tours etc.
- Offer potential clients a good experience before they arrive by communicating well with them from the moment if their booking until their arrival. Then a really good welcome is vital probably followed by leaving them on their own to enjoy the wonderful environment you have created for them!
To summarise, you can certainly produce an income from a property in France but keep your expectations realistic and never stop trying to improve what you are offering to people who may want to rent your property.