 Poster: A snowHead
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What does a 260k apt look like in the 3v is it even possible?
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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@Comptp, No, you're on the right track. We are getting closer to doing something similar, at a similar price range, but adding a degree of difficulty by aiming to buy a standalone structure (corps de ferme, or old barn w/living space below) that's likely going to be a fixer-upper...or tearer-downer...
We do not expect to make money in the short- or mid-term, but we do expect to significantly add to our quality of life. We love the Alps, maybe more in summer even than winter, and our jobs are pretty remotable...we're looking close to Geneva to be near an airport and rail links.
I've run all kinds of numbers, and I do think that with a carefully positioned apartment you can break even on carrying costs (mortgage amount is up to you, of course). But we wouldn't be carrying anything we couldn't pay off anyway -- we'd just take out a mortgage to finance renovations. Sounds like you'd be doing the same.
Right now the second-home market is booming in France. I don't know if that's going to last, of course, but one thing that's changed from previous up/down dips is the ability to work remotely. That's actually what tipped us toward "let's really try to do this now" from "maybe when the kids are grown..." So this might be a more permanent shift, not that prices will keep going up but that a dip won't necessarily be as deep as it could be.
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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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I'm already on record...go for it. One caveat: from a career in real estate investment management, I learned that there really is only one mistake one can't fix: paying too much in the first place. Buying at the top of the very cyclical vacation home market, and maybe paying a premium to get the one you gotta have....that's what it looks like.
...but if you can afford to make that mistake than go for it anyway! Some things are about much more than investment performance. And fun is one of them.
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@Scooter in Seattle, absolutely right. But you can't time the market so you never know if you're "paying too much." Unfortunately that knowledge only comes in hindsight...
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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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You only paid too much if you don’t use it enough.
Buy the Fkr and ski the sh/t out of the area whilst your legs can carry you!
HTH 
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@Pasigal, I mostly concur, though if one is watching there are clues. For example, in my case, the arrival of an unsolicited, signed purchase agreement at a number I'd love to take, along with a "love letter". This surprised me and upon inquiry I learned that there were just three places for sale in a community of 3,400 dwellings! This is prima facie evidence of a seller's market. Also, agents with enough experience have seen the ups and downs and generally understand the range of prices in a given market. Waiting for the top or the bottom is indeed a fool's errand, but with the right approach one can do better than just diving in.
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@AL9000, well put!
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@Scooter in Seattle, I agree that it's a sellers' market ATM. That said, if you see a property that isn't going to push you over whatever bright red line you've drawn, there's not much point in waiting. Interest rates are still low, but rising...so that's another factor to consider.
But it all depends on what you're looking at. There are close comps for things like 2br apartments in a big ski station, but if you're looking at an old farmhouse you can really only get a range and trust your gut. One thing I've found is that the sellers' market here in France has flushed out a lot of properties that might have been considered unsaleable to most people a few years ago. That's a good thing if you're willing to think creatively and don't need something in move-in condition.
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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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But does someone with just a few weeks holiday to get out there, and with kids to consider, really want to spend time "doing up" an interesting old property where if they arrive after a few days of heavy snow they have to spend hours digging through the snow-plough solidified stuff before having enough space to park the car? And no scope for renting out until it was prettified?
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I'm never sure about this 'fixing-up' thing. A friend of mine did this in the Lot. Old farmhouse that none of the local would touch with a bargepole. Huge effort to fix it up and refurbish and when I visited he was already observing that unlike the UK, land was cheap enough that anyone local just bought a patch and built their own place from scratch: yes, these were often part-finished, as funds became available, but the locals simply couldn't understand the British fixation with buying a wreck and spending a fortune in time and materials and contractors, trying to bring it up to modern standard, and failing. Once he'd done it and before the huge tiled roof needed to be refurbished, he moved to a 1970's villa. Which he could have done four years earlier.
For the OP, in terms of a detached chalet versus an apartment: the advice that we were given by all the immobillers when looking was sound - if you're still working and aren't going to get out to the place that often, then an apartment makes sense, but if you're semi/retired and are going to be out for longer periods, then a chalet makes sense. The operation, maintenance and refurbishment of a chalet is substantial and has to be organised by you, whereas for an apartment, you're one of many co-proprietors and the place is managed by an agency (often the original developer) and the costs are shared. As importantly, the agency will be organising everything, can deal with issues quickly, and there are economies of scale for building/maintenance work. Contractors are also more likely to respond to an agency maintaining a block of 40 apartments than they are to an individual owner (like everywhere, getting tradespeople at short notice can be a challenge, with the added issue of your being up a mountain).
Also, the wear and tear on a property in the mountains is substantial, and you generally need to budget for even more maintenance work than you would on your main residence back home in the UK. This applies even more to a detached chalet versus an apartment block.
That's not to say a chalet is the wrong choice for everyone. Just that the factors that dictate whether a chalet versus an apartment is the best choice are sometimes differently weighted compared to the house vs flat decision in the UK.
Finally, bear in mind the issue of capital gains tax. You'll pay CGT on the increase in value of the holiday property when you sell it. This means that the option to upgrade at a later date is usually not cost-effective: for most owners, what they choose to buy is what they're stuck with indefinitely. Unlike a primary residence, you usually won't find it cost-effective to sell and buy somewhere bigger as at a later date, because you'll have to pay CGT on the sale. And vice-versa, if you went for a chalet and decided to down-size later, then the CGT hit may make the process pointless, as you'd be paying over the odds for somewhere smaller.
Last edited by Ski the Net with snowHeads  on Tue 19-04-22 9:56; edited 1 time in total
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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@Comptp, thought of your thread when we were in St Gervais this week, and had a look in estate agents' windows. I think StG is probably somewhere in the middle of Fench alpine locations as far as apartment/chalet price goes - not as expensive as the main resorts in 3V, Espace Killy, Portes du Soleil etc, but more than smaller ski areas or the peripheral "back-doors" to the bigger areas. Anyway, for a 3 bedroom place in what I think of as a sensible location you are talking about 400-500K euros. You could get a bit below that if you were happy for a 2 bedroom apartment plus a "cabine" with bunk beds, or being beyond reasonable walking distance of ski lift and village amenities.
If you want to explore your fantasy further, I suggest you plan a summer holiday in the Alps. Not the ski season, but you can read up about the skiing and as others have said, with school holiday constraints you may well end up spending more time there in the summer than the winter. It is certainly a better time for driving between chosen locations and spending a few days in each. If nothing else you will be able to sample a few places for sale, get a better feel about what really matters to you, and if anywhere "clicks" develop a personal connection with a few local estate agents who you can keep bugging to ensure you get informed about anything suitable coming on the market.
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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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| LaForet wrote: |
| Finally, bear in mind the issue of capital gains tax. You'll pay CGT on the increase in value of the holiday property when you sell it. This means that the option to upgrade at a later date is usually not cost-effective: for most owners, what they choose to buy is what they're stuck with indefinitely. Unlike a primary residence, you usually won't find it cost-effective to sell and buy somewhere bigger as at a later date, because you'll have to pay CGT on the sale. And vice-versa, if you went for a chalet and decided to down-size later, then the CGT hit may make the process pointless, as you'd be paying over the odds for somewhere smaller. |
And, of course, that's CGT in both the country where your property is located and in the UK (assuming you continue to live in the UK). The rates of tax and the calculation of the gain may be different in each country.
Furthermore, you should bear in mind inheritance tax (which may be known as estate duty, death duty, etc in other countries). Again, the rules on this vary a lot from country to country and can be very different from UK IHT. Most likely, the country where the property is located will expect to tax the value of the property if its owner dies, which can lead to suffering more tax than if the deceased only has UK assets. The other country might have higher tax rates and might not have any tax-free allowance. They might not have rules to reduce/defer IHT on assets inherited by a spouse. With foreign income, there are usually mechanisms to prevent it being double taxed, but this is less often the case with death taxes.
Last edited by And love to help out and answer questions and of course, read each other's snow reports. on Mon 18-04-22 11:11; edited 1 time in total
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that's CGT in both the country where your property is located and in the UK (assuming you continue to live in the UK). The rates of tax and the calculation of the gain may be different in each country.
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Yes, but in the case of France/UK there's a double taxation agreement so, as I understand it you will not have to pay twice. If the CGT in France is £X and the CGT in the UK is £X plus £500 you will only pay £500, having already paid £X in France.
But sure, the whole tax and inheritance business is something to understand. The French inheritance laws meant that when my husband died, my three kids and myself shared ownership of his half. When it was eventually sold that helped, as we all had our own tax free bands for CGT and had no other capital gains.
If you buy a place just for your own enjoyment, and not as an investment, all this really doesn't matter. If you are lucky enough to buy and sell at a time which means you make a stonking capital gain, you'll pay tax on that gain. And if you have pots of money so that IHT is a big consideration for you, you'll need advice.
But you do need to understand the French inheritance situation which is very different from the UK. My family was very straightforward, but I do know one family where wrangling about inheritance and IHT about property in France has been a real bone of contention. One of the kids who inherited the place was really short of money (mostly through being an idiot) and wanted to sell it, but his siblings didn't.
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You know it makes sense.
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| pam w wrote: |
| Quote: |
that's CGT in both the country where your property is located and in the UK (assuming you continue to live in the UK). The rates of tax and the calculation of the gain may be different in each country.
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Yes, but in the case of France/UK there's a double taxation agreement so, as I understand it you will not have to pay twice. |
The DTA usually just specifies that the country where the property is located has first taxing right. The tax paid where the property is located can usually be offset against the tax liability in the state where the seller is resident. If that latter liability is higher than the tax credit, you have to pay extra tax equal to the difference.
DTAs on income and capital gains do not cover taxes on death, but fortunately France is one of the countries with which the UK has an estate tax treaty as well. https://www.legislation.gov.uk/uksi/1963/1319/schedule/made
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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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| Quote: |
The DTA usually just specifies that the country where the property is located has first taxing right. The tax paid where the property is located can usually be offset against the tax liability in the state where the seller is resident. If that latter liability is higher than the tax credit, you have to pay extra tax equal to the difference.
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Yes, think that was what I said, albeit in less technical terms...  My French notaire would only talk French, so I probably missed some of the finer points.....
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Poster: A snowHead
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Having bought a small appt., the single biggest benefit I found was being able to leave all my stuff out there. I couldn'y imagine owning just one set of skis anymore (but if I did Blizzard Bonafides). I thought about renting it out but not very hard. The agent fees were very significant and so the return didn't seem that attractive and I'd have got irritated seeing the gradual wear and tear, plus stuff going missing. Plus as already noted, you want to ski the absolute prime times for rental yourself.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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@Nickski, absolutely, when people talk about having an apartment giving them a letting income for part of the year they don't realise the huge benefit of being able to just turn up knowing your toothbrush is in the bathroom, your ski gear is in the wardrobe, and provisions in the larder cupboard.
And others - thanks for the information about things like GGT and IHT where I admit we rather glazed over when explained originally.
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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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your toothbrush is in the bathroom, your ski gear is in the wardrobe, and provisions in the larder cupboard
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rack of red wine on top of the kitchen wall units. White wine in the cave. Well stocked corner cupboard with all your favourite drinks and nice glasses. Books. Music. Your skis in the ski locker (which you'd have to empty for renters). Good knives. And (in our case) the drying racks with the linen and towels you washed last thing before you left, but couldn't have had hanging around with renters coming in. And - just once - some mugs and a pretty tea pot smashed across the carrelage because a wall unit had managed to fall off in your absence. Fortunately not on the head of someone who might have sued.
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You need to Login to know who's really who.
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I think two further issues. In Spain stamp duty is huge so changing properties is highly expensive. I dont know for France.
I know people who have got huge problems with inheritance tax equivalent in France where step children are involved and expert advice is deffo required
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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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More importantly.... what happened to the OP? 
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| countryman wrote: |
I think two further issues. In Spain stamp duty is huge so changing properties is highly expensive. I dont know for France.
I know people who have got huge problems with inheritance tax equivalent in France where step children are involved and expert advice is deffo required |
7% approx in France.
Another thing to bear in mind is that Social Tax on rents and profits from sale is 17.2% for non-EEA citizens. So for Brits that has gone from 7.5% to 17.2% post Brexit which might make owning a "ski lodge" no longer fiscally viable. Assuming you declare the rentals.
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@James the Last, You've missed the point. You haven't tied up capital. You have used money you have to fund something you enjoy. You could say that i have tied up capital in buying that shoulder of lamb I had for dinner tonight whereas I could have had pigs trotter. Actually, I'll have to check that out since I haven't seen what price pig's trotters cost these days - they appear to have disappeared from the butchers.
BTW £20 per m2 seems rather a lot for a weeks rental, even in Meribel.
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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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It is OP who is taking about this as a money-making project, with enjoyment an added benefit. He wants to be mortgage free on the back of the profits by 65. The assessment is therefore tying up capital that could otherwise generate income to pay for his ski trips.
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You could say that i have tied up capital in buying that shoulder of lamb I had for dinner tonight
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No you couldn't.
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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| James the Last wrote: |
| Why would you bother tying all your own capital up? |
Because 'tied-up' capital appreciates in value, while uninvested capital depreciates, thanks to inflation. I'm not saying this is guaranteed, just what's happened generally over the last 20 years. Yes, there's an argument over where best to invest to at least beat inflation, and that's a complex question, and for this topic, involves a subjective assignment of the utility value of owning your own place.
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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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Would you rather die with an extra £250K in your bank account or a massive smile on your face. Its that simple
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Would you rather die with an extra £250K in your bank account or a massive smile on your face. Its that simple
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Not quite that simple, and even if one's investment objectives are confined to having the best time possible, and ending up with £0K in your bank account, there's quite a lot of analysis which is worth doing. When we bought our French apartment we were pretty clear we were happy to spend ALL our holidays there - and we were right. We spent four months a year there, and loved it. But that calculation would have been quite different had we been restricted to school holidays, or if we'd have wanted to do other holidays, go to other places. We were also clear that we wanted our own place to live in, with our own stuff, and would be fine being out in the sticks with no "facilities" provided we were near the ski lifts in the season, and with good walks on the doorstep at other times. At no time did we expect the place to "wash its own face" in financial terms, let alone to make a bit of money. We had not planned to buy a place, and driving home from the Alps, having "discovered" it, in a resort we had hitherto never heard of, we looked very realistically at how we felt about spending all our holidays - not just ski holidays - there for the foreseeable future, which turned out to be 15 years. In the event it did become a good investment, largely because of the substantial rise in the value of the euro against sterling. But that was a bi-product, and lucky.
Being 100% clear, and realistic, about your goals is an essential starting point.
For some people with £X to invest, a UK buy to let, to produce extra income to rent nice places for holidays, and with a good chance of capital appreciation (because we understand our local markets well) can be a better way of putting a smile on your face.
Being realistic about time spent negotiating at a distance with French cleaners, French accountants and French plumbers, is also essential. The French stuff can be interesting, and my French language skills, though still not great, improved a lot. For some people that's part of the upside of having an apartment, but I have friends who owned an apartment for as long we we did who are still absolutely hopeless at French, and don't enjoy grappling with it.
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You know it makes sense.
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| pam w wrote: |
| For some people with £X to invest, a UK buy to let, to produce extra income to rent nice places for holidays, and with a good chance of capital appreciation (because we understand our local markets well) can be a better way of putting a smile on your face. |
A French investment guru made the same point as you - that the best place to invest in property is where you actually live as you know the local market and are at hand to deal with problems.
One fly in the UK BTL ointment - all properties for let will have to be Band C or above from 2025 (not sure if this will cover council properties though). That will be a major headache for many existing BTLers.
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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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It's a log time since I did a BTL and I'm completely out of touch - we bought an ex council house in Leigh Park, in Havant, and rented it through a Housing Association. Low returns, but the young couple who rented it were good tenants, and when the Housing Association were slow in getting problems sorted out (which they inevitably were) we dealt with it direct. They were there for a good few years and we did feel that as well as getting a very modest return on our investment we provided a family with good housing at a sensible rent. Rachmans we were not!
We were, at that point, "investing in property" but not when we bought the French place. Then we were buying a place to spend lots of time in and have great long holidays, at modest cost, in our retirement, and for that, it worked a treat.
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Poster: A snowHead
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Buy foreign property if you have an emotional attachment to the area. If not rent.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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| skimottaret wrote: |
| Buy foreign property if you have an emotional attachment to the area. If not rent. |
This. I've toyed with it a few times but came to the conclusion that I'd never like being tied to one place (maybe a different matter once retired with the time to put in?). Then the (to date) permanent devaluation of GBP came along in June 2016 and made it a lot more of a stretch.
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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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| Dave of the Marmottes wrote: |
| skimottaret wrote: |
| Buy foreign property if you have an emotional attachment to the area. If not rent. |
This. I've toyed with it a few times but came to the conclusion that I'd never like being tied to one place (maybe a different matter once retired with the time to put in?). Then the (to date) permanent devaluation of GBP came along in June 2016 and made it a lot more of a stretch. |
the GBP traded around its current value from 2008 (Brown's financial disaster) to 2014. It then had a brief period in the sun from 2014 - 2016 where it was at an (overvalued) 1.50 mark. People like Pam who sold up post 2016 did very well with the pound approaching parity.
To talk of a permanent devaluation is being a bit of a drama queen.
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You need to Login to know who's really who.
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| Quote: |
I'd never like being tied to one place (maybe a different matter once retired with the time to put in?).
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Yes - one's perspective changes a lot. Having travelled a lot for work, and lived abroad, we found ourselves very content to do the same walks at different times of the year, marvelling in the seasonal contrasts. Happy to ski the same runs lots of times too. But even if we'd not been so fortunate with the exchange rate (bought at 1.62, sold at about 1.13 IIRC) the financial aspect would not have been nearly as good if we'd not been there for months each year and able to take maximum advantage of cheap season lift passes, bought before end November. If you only have a couple of weeks holiday to spend in the Alps each year, renting a place to suit, in a range of resorts, has a lot to be said for it. Having your own place won't significantly change the other costs - travel, food, life passes. For us, the apartment's being right next to the piste was critical. Both for ourselves, when it was "worth" going out for just a couple of hours on a rough day, or coming back for lunch in the middle of a long day, and for kids and other visitors who could take themselves out skiing without our providing a taxi service. Ski convenience was a lot more important than shopping convenience. And perhaps the single most important feature of the place, all year round, was the view. And having a terrace to sit out with a glass of something and enjoy it.
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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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You'll need to Register first of course.
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@pam w, wow, how lovely.
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Edited away, as I'd only read the first page. Doh!
Edited back in as having read the next two pages still no-one seems to have said: Tax.
So factor in the tax (income, not fonciere or habitation, you've mentioned them). there will be a tax liability to the French and/or UK govs for the income you generate (net of allowable expenses). So you need a bit more surplus income to cover that.
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We got round the income tax thing by never renting out and just spending 25-30% of our time in our apartment.
Tax wise a great idea, lifestyle even better, financially makes absolutely no sense at all. 
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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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| Quote: |
Tax wise a great idea, lifestyle even better, financially makes absolutely no sense at all
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But somebody whose priority was financial wouldn't buy an apartment in the Alps in the first place.....
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| Hurtle wrote: |
| @pam w, wow, how lovely. |
I think Pam hit the sweet spots for buying and selling in what is a charming area.
Les Saisies has now been "discovered" and is not such good value as it once was. The big advantage is that it is up on a high plateau so even if the alpine skiing is not extreme it makes it better for walks and mountain bike riders and that kind of thing and gets you up and out of the hot valley air in the summer. Access to various towns is also easy: Geneva, Lyon as it is quite central in the Northern Alps.
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FAQ
