 Poster: A snowHead
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@Roscoe We were in a similar sort of situation. All I'd say is don't rush into anything and do a lot of groundwork before going into any immobilier. Like estate agents anywhere, they're there to sell you what they have on their books, not to advise on what's best for you. To be fair, you'll also get a much better service from any immobilier if you walk in with very clear requirements, rather than vague ideas. And whatever you do, don't look to UK-based agencies: would you recommend a French person buying in the UK to go into an agency in France? We made the search process into a series of mini-breaks, going out to different locations where we'd already skiied, in the low season. Many places were completely dead. Looking at public transport schedules, it became clear that others were pretty isolated. And dropping into the Tourist Offices, it became clear that some resorts had a much more active summer season than others. And so on. There are various threads on this worth researching, and which cover a lot of the factors people have discussed re finding a place.
Last edited by Poster: A snowHead on Fri 3-01-20 16:33; edited 2 times in total
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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| Quote: |
The cash will come from a redundancy payment
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Wherever it comes from the opportunity cost of the capital is at least £3K a year. We sometimes had 5 or 6 of us in our 2 bed apartment for a week at a time but generally it was better suited to 4 maximum. 2 ideal - with the second bedroom used as expansion space, drying, dumping anything which was in the way in the confined living quarters etc.
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| pam w wrote: |
| Quote: |
The cash will come from a redundancy payment
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Wherever it comes from the opportunity cost of the capital is at least £3K a year. We sometimes had 5 or 6 of us in our 2 bed apartment for a week at a time but generally it was better suited to 4 maximum. 2 ideal - with the second bedroom used as expansion space, drying, dumping anything which was in the way in the confined living quarters etc. |
£3k per year is do-able. Especially if we're skiing 3/4 times in winter and using it during the summer as well. Currently spending £15k+ on 2/3 family holiday per year. If travel and living cost whilst away come to under £12k for the year, i'd see it as a win. I get that its a commitment to go to the same place multiple times a year.
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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Just a thought: @Roscoe had you considered a holiday home near to, but not necessarily in the mountains? Somewhere in a more central location with a drive to a choice of ski areas, but perhaps with more in the way of summer activities? I suspect that you'd get more value-for-money for your budget and certainly somewhere with a larger m². When we bought in Switzerland, we couldn't do this, as foreign purchase is restricted. But in the EU you have more possibilities.
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| Quote: |
£3k per year is do-able
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But that's just the opportunity cost of the capital. You've got substantial expenditure on top of that. But if you want to spend 4 - 8 weeks there yourselves, are happy to go to the same place, put some effort into renting it out and dealing with the inevitable problems which that causes (assuming you don't want to pay a local agent) it could be a good way to go. Though you will strain the goodwill of your kids' schools if you take them skiing 3 - 4 term-time weeks a year!! I'm not trying to be discouraging - just realistic. Our place was a huge success - really a great joy as well as (thanks to exchange rate movements which are unlikely to be duplicated as well as to having bought in a small ski area which was scheduled to get lift linked into a much bigger one) profitable. But we were retired; whole different ball game.
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Our new, MGM, 2 bedroom, piste-side apartment with a place in a covered garage was £70,000 in 2002. It would be around £185/190 now. But the price difference in euro is nothing like as big - though the capital growth has been OK for France.
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I looked into this a couple of years ago, when I had a possible lump sum to invest. TBH we have no young kids now, which helps but I looked into the 'investment' and whilst you can make gains on the property the yearly running costs would still be way more than a holiday or two a year. I cannot get enough time off (months) to make it viable, and I know I would get bored going to the same place time and again.
Overall even if we could rent the property at key times in high season and ski ourselves in quieter weeks the benefits were totally outweighed by the cost.
In stead we upped our annual ski budget from cheap as chips, to luxury, as we decided we may as well live it up for a week a year at least.
Stuffed the money in other investments and getting way better returns
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You'll get to see more forums and be part of the best ski club on the net.
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^Did the same. Had pondered buying a decent size property but when we worked it out and realistically considered how many weeks we could get out there we decided to invest the capital and take nice holidays !
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^Did the same. Had pondered buying a decent size property but when we worked it out and realistically considered how many weeks we could get out there we decided to invest the capital and take nice holidays !
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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I notice leaseback has been mentioned earlier, by @Mr.Egg, ............don't touch it with a very long pole.......
just a few of the things they don't tell you...............
Most likely you will be liable to maintain the outside of the building as you are a prof landlord, so expenses are not just the so called reduced management fee
Under a 1953 french act, it is a commercial lease, so you will not be able to get out of it (they often state in the sales pitch after 11 years you can get out.....) without paying the tenant a large payment to cover their loss of income, this is likely to be between 2x and 5x their turnover for your apartment for 2 years. This does not need to be written into your lease as it is implied by statute.
If you get out of the lease you will need to repay the TVA in proportion up to 20 years. ie 9/20 if you get out at 11 years
The Loi Montagne clause 42 states you may to liable to the local commune for loss, if you get out before 18 years
the "rent"they pay you will be very low
You will be liable to pay for the refurbishment of the apartment on lease renewal, and only the tenant will accept their standard of work, so they do it and charge a huge amount for it, which they will then use the next 5 to 6 years rent to pay for it, at another 9 years you are up for renewal again..................
They will return your apartment hammered, not as the sales pitch "put back new", as they just have to return it with fair wear and tear according to the lease.
Usually your electric, hot water, water is all joint, which means lots of meters installed if you can exit the lease.
The value of your apartment will not be same as normal properties around it as leaseback are really difficult to sell on for all the above.
The tenant will own the pool, gym etc and reception building, so if you do exit you most likely will not be able to access it.
Your weeks will only be Sat to Sat
There.......... have I put you off?, hope so, its a big mis-selling scam, supported by the french government.
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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I looked at the Orelle property again, it is energy band G - quite surprising for a newish build with double glazing although the heating is via "grille pains" which are not very efficient. Energy band F and G and covered by a new French law which will make you liable to bring them up to a higher energy class, this could be expensive.
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@davidof, Yes they may have to clad the outside of the building with insulating material
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You know it makes sense.
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| johnE wrote: |
| @davidof, Yes they may have to clad the outside of the building with insulating material |
if the whole building is done it shouldn't be too bad. There are adverts for the same block where they claim energy level E, which would currently be exempt, so it is all a bit random.
Orelle seems pretty cheap, do people not like the long cable car ride into the 3Vs?
Last edited by You know it makes sense. on Fri 3-01-20 22:21; edited 1 time in total
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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@boredsurfin, Ah! Longefoy. I drive through it a couple times every summer and wonder about the ski lifts there. Are they ever used, who uses them, where do you get a lift pass? To me it looks a beautiful village - provided you own a car or are a TdF cyclist. Oh wait a minute, they cancelled their visit their this year leaving the residents bunting looking rather forelorn
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Poster: A snowHead
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@johnE, No lifts in Longefoy, theres a couple of lifts a bit further along the valley at Notre Dame du Pre. Yes the TdF cancellation was a bit of an anti climax, a guy had even set up a Burger Grill and bar in one of the Lay-bys between Aime and Longefoy, plus many words painted on the Tarmac that are still there today.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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My experience, several years ago, was that it is very hard to mix and match investment returns and personal usage. As a result, I stopped renting our place a long time ago.
If you want to get value out of it yourself, with a family, that means using peak holiday weeks for personal skiing. The remaining weeks are lower value from a rent perspective, and also the lack of availability for peak weeks annoys local agencies who don’t like to rent on an “off peak only” basis as they don’t make much money that way. Throw in a few weekends of usage (blocking out 2 weeks at a time) and there’s very little left. So you’re left trying to rent it out yourself, which is hassle. If you have 3 kids, £200k to spare and a nanny, my guess is that you don’t need more hassle in life.
I also can’t think of a good scale resort where £200k gets you 3-4 bedrooms (you plus 3 kids plus nanny) ski in ski out with a long season and good rentabiity.
We love our apartment, it’s one of the best investments I’ve made emotionally and knowing everything I know now I’d do it again in a heartbeat, but, apart from a few bank shares I own from pre financial crisis, it’s one of the WORST financial investments I’ve made. I’d have thought that sticking the money in a FTSE 100 tracker and using the £6k/yr yield to fund accommodation would be more financially rational. Anything else is speculation on forex and property prices and that can be done through CFDs instead if that’s your game.
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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You need to Login to know who's really who.
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@Bergmeister, From the RIBA
Riba estimates the floor area of the average new three-bedroom home in the UK is 88 sq m (947 sq ft) - some 8 sq m (86 sq ft) short of its recommended space.
From which https://www.which.co.uk/news/2018/04/shrinking-homes-the-average-british-house-20-smaller-than-in-1970s/
Homes from the most recent decade have around 67.8 square metres of living space, LABC Warranty found – not much more than both decks of a London bus, which come to 55 square metres.
I like the way that the BBC ammends American units to describe the size of homes, Which uses double decker busses wheras we all know that the standard way to measure the size of a property is how many bedrooms it has.
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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| davidof wrote: |
| johnE wrote: |
| @davidof, Yes they may have to clad the outside of the building with insulating material |
if the whole building is done it shouldn't be too bad. There are adverts for the same block where they claim energy level E, which would currently be exempt, so it is all a bit random.
Orelle seems pretty cheap, do people not like the long cable car ride into the 3Vs? |
I think Orelle is a good place to base yourself if you don't mind driving. A few small resorts, close to Italy border & the back door entrance to Val Thoren.
I think it's cheap because there is nothing there!
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@Roscoe, I can give you an Austrian take on this. Firstly for 200K you won't get anything in any of the big resorts that meets your needs. We were very lucky to pick up our first property 93m2 for just under that a few years ago. Since then that one has returned about 7% (not including Capital Gains) a year on the investment after running costs but we have had nearly 80% occupancy in the winter months and maybe 20-25 days in the Summer. We don't make any money in the Summer though as the changeovers and Laundry costs exceed rentals of 3 days or less and most guests in the Summer don't stay for a week. It does however give us enough occupancy to meet the Furnished Holiday Letting (FHL) Criteria as per HMRC requirements. Look at your potential tax liability on income as well. I would also suggest you look at getting a mortgage if you were to buy in Austria. Very low interest rates and useful for FHL tax reasons. As stated elsewhere we have to rent this property for the High Season weeks which limits your options for family holidays.
We next bought a second apartment 15 mins from the Ski Amade resorts (but in a village with a small ski area). This was 200k but is 98m2, 3 bedrooms and a terrace. We use that one for our family holidays as we don't mind the short drive each morning and with the Salzburgland Super pass we can ski many different resorts over the season. We don't rent this apartment out but we could do with the same caveats above. Property prices in Austrian Ski Areas are still rising by about 5% a year because their savings rates are so low and people are investing in property so we should profit on Capital Gains. The biggest challenge was and probably would be for you, getting someone to look after and service the apartment on a weekly basis. In Austria you have the same (low return) leaseback options with some properties, one or two large "Management" Companies who are usually only interested in taking entire apartment buildings on or, you have to find someone to do it for you and make a private arrangement. You won't find an Austrian to do it so you have to cast the net a bit wider.
Finally, I'd do nothing now until we understand what the full implications of BREXIT are. Put the money into some of the investments mentioned above and get around 4-5% return (8-10k) to spend on Ski Holidays until Alles Klar!
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I advocate long term rental unless you know and are very confident as to exactly where you want to be and how much you really will use it.
Invest in something with a more proven return and use that to offset the cost.
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[quote="davidof"]
| johnE wrote: |
@davidof,
Orelle seems pretty cheap, do people not like the long cable car ride into the 3Vs? |
Agree not much in terms of drinking etc but if you are into it, offset by the use in the summer ..... walking and cycling etc and only 10 mins off motorway. .
Cable car currently being upgraded with a faster ride and direct link to Cime Caron. Should be about 20 mins to just about the highest point in 3v.
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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@Roscoe Just worth asking the obvious, but you have paid off your UK mortgage, I assume? Because if you haven't, then doing this first make a lot of sense in the long term. When we had our windfall, that's what I did. I then took a bit of a break to build up a nice positive balance across our current account, credit cards and savings offset, and then re-instated the mortgage to pay for the Swiss apartment, and then paid that balance off over a few years. Because I had an offset mortgage, it was simple to pay off most of it with the windfall, and then draw on it again to buy the Alpine apartment. Essentially, I kept moving roughly the same out of my current account as the original mortgage repayments, initially into a savings offset, and then against the amount I drew down for the Alpine place. That way, it sort of forced me to live within my means. Otherwise, for me, I know I would have started to spend the windfall on things like new cars etc.
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@Zorrac, bitter, much?
Leaseback works well for us: horse for course and all that. We know plenty of people who have switched out, and plenty who haven't. Both seem content with their lot.
And yes, I know all about the downsides: through an active Owners Assocation of both French and British, we manage them. It's not perfect, but it sure is easy.
Coming home from Christmas in the mountains this year, we remarked that "going back to the same old place" every year as some disparagingly put it, wasn't a holiday, it was a parallel life stream. Frankly, we know more people in the bars, the shops, the street, the neighbours than we probably do in the UK. My daughter has grown up knowing the place like her home town. And we love it.
Summer is fabuous (Not sure why, but we get 8 weeks cf to JohnE's 6 in 1600), winter magnificent. And of coruse, the shoulder seasons, while empty can be a quiet place for reflection or remote working.
Knowing what I do now, then given my time and the money over, would I do it again? In a shot. Has it made me rich? Not in cash terms, no. But then again, not poor either. It (just) about wipes its feet financially, although I suspect with an aging building that is going to change for the worse. But then that's not why we did it. As a family, we feel far 'richer'
As other have said, 200k won't get you much, unless you are going to take out a Euro mortgage to go with it. Or indeed be at some distance fomr the actual mountains. for 5 kids, you want at least 3 bedrooms, and in somewhere like Arc1950, you're looking at £450k and up for starters. €5,500 to €6,500 per sq m.
Do it with your eyes wide open, take what life throws at you, and it might be the biggest and bestest gamble you've ever taken.
Oh, and make sure you listen to advice, not opinions. 
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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been here in 2014, they were worn out back then, imagine the condition they are in now. And the price we paid was laughable, very small. Not sure what return you can expect from it counting in administration fees.
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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We bought a new build in Austria. It’s a 2 bed. There is a legal rental obligation. We have leased the management to a local company. They take care of all the costs including all bills and the letting + advertising. They take a reasonably large share of the income as a result which is a common practice in Austria. We take probably 5-6 weeks a year including 1.5 week at Xmas/NY and one at or before Easter. A couple of other weekends out of high season. Summer weeks etc.
We break even after financing costs. Nothing more. Without the financing it would be a very good earner. Capital appreciation has so far been strong as there are few new developments available in or near the town.
We get a place we love and feels like home. Like the OP we were spending a huge amount on holidays (2 kids), flights are generally cheap as bought way in advance or on air miles.
It’s the best thing we have ever done as a family. I don’t ever expect my kids to want to go on summer holidays with me when they are older but I am sure they will want to ski with us.
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@Arctic Roll, I think the summer season in les arcs has now been extended. It now starts at the start of July instead of mid July. I'm a bit behind the times.
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You know it makes sense.
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@Arctic Roll, Nope not bitter, just disappointed that leasebacks continue to be mis-sold. Everything I listed would be likely to be true with a CGH / MGM lease to a greater / lesser extent depending on the individual lease, and when it was signed, the terms of which may actually vary between owners in the same residence!
The operator compensation does not need to be mentioned in the lease for some, if the lease was signed before 2004 then the compensation may not be valid, if after 2009 it must be specifically mentioned in the lease it be valid. If between 2004 and 2009 then its implied.................
The return on leasebacks was reasonable 15 to 20 years ago, and the income could cover the expenses, but not now, and it continues to be mis-sold. eg. Friends of ours enquired about the compensation when looking around a new leaseback in Les Carroz and were told that it would be commercial sucide for MGM to impose it, (it would not be them anyway, as CGH run it, which was sold by MGM 5 years ago) when they do impose it!
Your arrangement in Arc1950? sounds super 
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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Elsewhere on this forum you will see that we have just bought ourselves a place in France. First time skiing there next week!
But we chose it as a lifestyle investment not a financial investment. In France at least there is a transaction cost of around 6-7% for buying and I gather about the same for selling. Plus apparently about the same for selling. And then currency risk, in just a few weeks we have lost another 5-6% on paper though that could move anywhere. (Plus, if the value does go up, there is French capital gains tax).
Obviously no one is going to make recommendations about finances without knowing your position in detail (and no doubt charging a fee). But lifestyle-wise, if you can see your way to using a place yourselves quite a bit (e.g. at retirement) or wanting to make it available to family, then buying somewhere could be a project which will pay its way back in pleasure many times over, long term. A little bit of rental in the meantime will help it on its way.
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Poster: A snowHead
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BREAKING NEWS: So first BREXIT impact in Austria. Despite having more cash in our Austrian Account than what we were asking for and already having a mortgage with said bank, we were rejected for an Austrian mortgage this weekend for another property purchase on two grounds. 1: New Austrian Law saying you have to have income in Euros before being accepted and 2: Because as a UK Citizen you will no longer be part of the EU. Cash only purchases for UK citizens for the foreseeable future then.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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| RedandWhiteFlachau wrote: |
| BREAKING NEWS: So first BREXIT impact in Austria. Despite having more cash in our Austrian Account than what we were asking for and already having a mortgage with said bank, we were rejected for an Austrian mortgage this weekend for another property purchase on two grounds. 1: New Austrian Law saying you have to have income in Euros before being accepted and 2: Because as a UK Citizen you will no longer be part of the EU. Cash only purchases for UK citizens for the foreseeable future then. |
1/ I think you'll find this has nothing to do with Brexit, it's because of international money-laundering rules. I'm an expat paid in a foreign currency and most British banks stopped offering mortgages to people without sterling income years ago. Before the money laundering regulations it was no issue. I also have a French mortgage in Euros and they have told me they would not lend to me anymore for the same reason - not paid in France, can't lend in France. However, in both cases there are still plenty of specialists who will offer a mortgage for a non-UK investment property or second home.
2/ My understanding is that any foreigner can buy a property in Austria subject to meeting the local state's foreign purchase regulations. In terms of funding you simply go to a mortgage company in the UK (or whichever country where you can prove your income) who is willing to lend on a property in Austria.
So not down to Brexit and not cash only.
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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@RedandWhiteFlachau, i was offered a mortgage by a private bank in Zell in 2011. They withdrew the offer because of money laundering rules. Sparkasse and Raifeissen were both happy to proceed. I went with Raifeissen.
What new law is being quoted?
Last edited by Well, the person's real but it's just a made up name, see? on Tue 21-01-20 10:52; edited 1 time in total
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You need to Login to know who's really who.
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@Raceplate, I quote "As I have asked our authority in Salzburg, I am really sorry but due to new law orders it is not possible to apply for a new mortgage for people from abroad who have no regular job income in EURO. Further there is a problem, because the GB is not in the EU anymore (when the Brexit is done)."
So the first is tied to money regulations which haven't changed since 2016 and were exactly as they are now in 2018 when I took out the last mortgage. The only thing that has changed is we will leave the EU in 10 days time. I can see why the Austrian Banks might consider that a greater risk and be unwilling to lend. There is no problem buying the property (and we will) but offsetting a Euro Mortgage for very good legal tax reasons is no longer an option. Borrowing from a UK lender rather defeats the object.
@holidayloverxx, I think it is more a case of enforcing more rigidly the Mortgage legislation passed in March 2016. Update from May 19 "Generally most banks are now insisting on a residency before considering a mortgage. They are also strictly enforcing the Euro income policy."
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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@RedandWhiteFlachau, thanks
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You'll need to Register first of course.
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This is kind of b0ll0cks.
Where we live there are a couple of hundred apartments and 58 chalets.
All the time the resort was running there were a few chalets and a dozen or so apartments for sale.
A few years ago the resort closed for skiing, took the lifts away and sold them to St Jean d'Aulps.
There was a flurry of apartments and chalets being put up for sale.
(roughly 18 Chalets and 40 apartments)
Five years on, and chalets sell for the ask as soon as they go on the market, and the price of apartments has crept up along with the decrease in availability.
And this is not a quant little village, it's a remote mountain top pass linking the 2 valleys of the PdS.
So while logic and reason would suggest that no skiing = no value, what we see on the ground is the antithesis of this.
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@WindOfChange, perhaps. But your experience is with skiing still being active in the rest of PdS. And the resulting uplift capability making it a more attractive summer holiday area as well. What if over a period, there was no skiing in Chatel, Les Gets, Morzine, and eventually Avoriaz - with all the lifts being removed and thousands of properties being put on the market? I agree they probably wouldn't be worth 'nothing', but a substantial drop is quite feasible.
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There's no skiing in Guilford, or in any of the neighbouring towns, yet despite this, property seems pretty expensive.
Go figure
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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@ecureuil, hmmmm. Chamonix increasingly popular in the summer (and it wasn't ever unpopular) ...
Not everywhere, probably, but some places alpine values not dictated by skiing.
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@under a new name, +1 The point I was trying (badly) to make.
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FAQ
