Buying Ski Real Estate in Europe

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Reaction of the Maurienne

A snowHead

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Re the issue of modelling the investment return - there's nothing wrong with putting in a factor for 'utility value' if you intend to use the place yourself. After all, that's what you do with a car, which is an asset that loses value massively, even if you buy 2nd-hand. No one buys their daily drive car as an investment, they buy it because it has utility value.

Of course, if it has no utility value i.e. you never intend to use your Alpine property (just rent it out all the time), then it's hard to make it look competitive against simply buying a rental property in the UK or investing it in other assets.

That said, our property bought in 2003 in Switzerland is currently running at around an 8% equivalent net interest, which isn't bad, given that we do use it as well. Of course, some of this is currency fluctuation and we've also rented it out as well. But the renting simply pays the running costs and some of the maintenance. Some people see the currency fluctuation as an unstable element of any profit equation, but many other investments also have exposure to currency fluctuations and global/local trends outside your control. If you want to beat inflation then you can't do it without accepting risk, with the question being how much potential loss can you tolerate in order to get close-to/better-than-inflation potential returns?

My advice to people considering buying an Alpine property is to do it in the context of a diversified asset portfolio i.e. don't put all your eggs into one basket. If you're pumping all your spare money into just an Alpine property, rather than your pension and other investments, then you need to think very carefully about eggs and baskets.

And finally, don't assume that property is always a guaranteed investment. As a home owner, I've paid mortgage rates as high as 14% and seen my nephew declare himself bankrupt because he bought a property just before a crash which he simply couldn't afford afterwards and which dropped in value as well. These are extreme cases but they've happened in the last 50 years, the latter (negative equity + higher interest rates) more than once. And on top f that, my impression is that Alpine property can take quite some time to sell, even in a buoyant market, because people are very seasonal in terms of looking for holiday property. It's not unusual in our village to see properties sit on the market for a couple of years or even more.

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@LaForet, wise words.

I found the comparison with a car very good. I had an uncle who insisted on owner a car even though he only did a few thousand miles a year (I think he actually did less than a thousand) In terms of depreciation, running costs, insurance etc it was costing him a lot of money. Renting a car when required or just booking a taxi would have cost him less and would be more convenient (ie he could have a drink) but he wanted his car.

Many people here, rightly, point out that owning your own apartment is not necessarily cost effective and love the option of going to different resorts every trip but I wonder how many consider the same for cars - simply renting a car as and when needed; a Fiat 500 one day or a Morgan sports car the next for example.

Someone mentioned buying a car for £50k. My apartment cost 60, 20 years ago. The apartment costs less to run per annum and has actually increased in value. I doubt the car will.

With rational thought I really should sell my car (I really, really should) but like my uncle I probably won't. But I have no desire or reason to sell the apartment. It gives be such pleasure.

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We bought our apartment in what has been described as the 'dump' that is The Maurienne Valley, in a year round town so that there are events going on year round - we did not buy it to make money (we do rent it out as we like the apartment to have use) but to use as a base to explore The French Alps and with easy access into Italy for both Winter and Summer holidays and to pass onto our daughter so that she and any potential family she has in the future can also enjoy the mountains. We are also lucky enough to have a house in Normandy where myself and my wife will spend much more time when retirement comes in a few years time away from the UK grind.

After all it is free

We bought in 2018 in Morzine with a mortgage. Similar properties are now going for 75% more than we paid. No point cashing out as thats not why we bought it (and CGT would eat alot).

We use it ourselves & rent it when we want the cash to go on nice holidays somewhere else.

I would do it again in a heartbeat.

[quote="johnE"]@LaForet,I wonder how many consider the same for cars - simply renting a car as and when needed; a Fiat 500 one day or a Morgan sports car the next for example.
/quote]

I have done it twice, once giving up a company car because I didn't need it for work and was being taxed on the benefit. I always put the "car money" in a separate pot so I had funds to pay for car hire and taxis and plenty left over.

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I was without a car for a long time during Covid, having given mine to my son and family when they needed to move out of London, where they'd used public transport or Uber. I arranged to borrow my lodger's sometimes (knocking cost off rent, which was probably quite a dodgy arrangement, though I did pay the very small premium to put me on her insurance) and rented a few times. But renting was a pain because the Europcar depot nearest to me had closed and I found renting far from straightforward. One time I needed to rent a comfortable car to transport my aged mother in law to her care home there was nothing available at all, anywhere local. Only vans, which were really not appropriate. I used taxis rarely, and did walk locally quite a bit more, which was good for me. Now have bought a car of my own - 7 year old Fabia, which I love. It's about convenience, with cars, whereas with apartments it's about the enjoyment and familiarity of your own place, with your own rack of wine, books, music, clothes hanging in cupboards, coffee and tea in the cupboard, and the familiar ski runs right there. If you have to clear all your clobber for rentals, or like going to a variety of ski areas, that "convenience and familiarity" factor is out the window. It's a very personal set of priorities. But the chance of major exchange rate gains (as I had) or property price inflation (as @Nadenoodlee had) is just that - a chance. Not to be relied upon.

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if we are only ever going to spend money on an investment over enjoyment, then the beer industry is in trouble.

PS, buy the right car & it can appreciate as much as property.

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I was thinking of you a couple of weeks ago, @Jonny996, walking round St Gervais. Such a nice place!

You know it makes sense.

Otherwise you'll just go on seeing the one name:

A snowHead

Enjoy it, @Jonny996.

A snowHead

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@Jonny996, maintenance ? Or have they just inflated unreasonably?

Anyway, snowHeads is much more fun if you do.

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@Jonny996, enjoy! (I had a 964C4 when I lived in london Zone 1 - it maybe did 2,000 miles a year?)

I much prefer playing with property, albeit at a tiny level.

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another thing to watch out for: droit de servitude

https://www.theguardian.com/world/2023/jun/07/briton-roderick-sinclair-harassment-french-bridle-path-dispute-montjoi

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Buying Ski Real Estate in Europe

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