To buy a lodge, or not

A snowHead

Hey,

Thanks for taking the time to read. My brother and I (and families), are thinking of buying a ski lodge. Some helpful factors
- probably somewhere between 400k and 600k
C20% of that deposit with the rest mortgage
- We’re UK residents (feels relevant given EU exit stuff)
- idea of having something that adds value to life. So profit not the biggest thing, although would want it to pay for itself/pay off mortgage
- would only want access for c6 weeks a year. Two weeks of Xmas and half term and some summer time
- would need to have 3 bedrooms to cope with families
- probably in France for ease of travel

Some questions that arise:

- are we kidding ourselves it’s viable?
- if you were going to do it, what would you read/research?
- would you do through an agent?
- would you manage yourself or hand it all over?

Literally any reflections advice or help welcomed.

Thanks,
Paul

A snowHead

Well, the person's real but it's just a made up name, see?

Also, realistically, it would probably be an apartment rather than a "lodge".

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@Comptp, Welcome to snowHead

Must be something we have all considered at some point, FWIW, having thought about it (and looked many years back) my answers:

1. Here is certainly a good place to get advice as there are many owners here.
2. Personally I would go through an agent - I'd want the support of someone who knew what's what.
3. I'd want it managed - I can't run to France to sort out any issues or lost keys etc. Again that's me.
4. Also think you're optimistic with getting a lodge, certainly in popular areas
5. Likewise, your money making weeks seem to be the weeks you want to be there
6. Re mortgage, would that be with UK or French bank? Either way you'll need to show that you have the means to pay the mortgage - which may only be possible if you buy an existing rental property with history of income

I've always reached the conclusion I would only do it if it was for my own use whenever I wanted and the odd rent to friends and family a bonus.

Full disclosure I am risk adverse!!! Loads of people do it and manage it so I'm sure you could snowHead

Anyway, snowHeads is much more fun if you do.

@Comptp, my brother in law makes most of the rent for his apartment in Morzine at Xmas/New Year and half term - they are the real money earners.

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Welcome to the forum @Comptp.

Quite a few of us here have places in the Alps, which means you can get inside advice on various resorts.

One question, when you say "lodge" do you mean a separate building or an apartment? The latter is certainly feasible in that price range in a number of places, and apartments have the benefit of someone else maintaining the building (though you have to pay). A separate building is also possible, but for that price you are either talking about a very small resort, or somewhere which is a drive to the nearest ski lift.

So ... is it viable? Well it most likely will be in terms of quality of life, but financial returns are another issue which I don't know about, ours is only used by ourselves and immediate family.

What to read/research? Well there is lots of internet stuff and glossy magazines on buying a holiday home abroad, which do contain the essential factual information (e.g. about French property legalities) but tend to be optimistic because they have a vested interest in getting you to part with your money - ideally more than you first thought of. But actually the first thing is to decide on exactly what you want and where.

So: exactly how much accommodation, do you need 3 decent bedrooms, or would 2 do plus a small bunk room for kids?
any extra features? e.g. parking, outside or covered, swimming pool in summer, lift to all floors
what sort of situation? e.g. how much it matters to you to be close to a ski lift, or walking distance from shops and restaurants
what sort of resort? e.g. purpose-built (so seasonal only) or year-round village, access to high mileage or smaller ski area, place with a summer activity scene (e.g. mountain bike trails) or just hiking (available anywhere)
and are you fixated on a big-name resort (might stretch budget) or having decided everything else are you prepared to look around?

Essentially, like any property purchase you will find everything on your wish-list puts you beyond budget, and somewhere along the way you need to make some compromises.

Our story: we happened to notice some studio apartments in Morzine were about the same price as the budget we had earmarked for a campervan project. That set us looking, we soon realised those apartments were poorly located or had other serious issues and we had to re-think budget upwards a bit. At that point we started researching the process and went to a French Property show in the UK (I don't know whether those have started up again) which got us realising that there might be good places to look that weren't on the usual tour operator list and we found out about those - you will find the Trip Reports here on Snowheads helpful. And then we went in the summer to look. Our criteria were: decent ski mileage, easy access from Geneva, walking distance from town and (ideally) ski lift, and a town we liked as a place. We ended up buying in St Gervais and are very happy with it, but there were quite a few other places where we could have met those criteria.

Would you do it through an agent? I guess you mean buying. Well there are certainly people offering that at a price. I think we wanted to be a bit more hands-on, but if we had struggled to find somewhere we might have tried to establish relationships with some of the selling agents in our chosen resort; just as in the UK when they get something new they will phone people they think will like it first. We found internet listings a bit hit-and-miss, it seems that new properties don't get put on the internet quickly, and they often stay there when they are unavailable for viewings due to an offer (that is required under French law). So we did it the old-fashioned way by walking into agents' offices and viewing apartments that fitted our bill.

For rentals you will have to ask those on here who rent out their flats. You are pretty much going to need someone on the ground anyway to release keys, change bed-linen, clean up, etc so some sort of management seems to me essential.

Good luck...

After all it is free

@Comptp, I know people who’ve done this recently in La Tzoumaz (satellite village to Verbier) at that budget for a decent sized place. They carefully selected the property for renovation potential and managed the renovation and running of it themselves.

A lot of French apartment owners do the management themselves and keep it simple. For example, many apartments don't provide bed linen, towels, etc

They usually would have somebody local to hand over keys, check inventory, clean.

You will get involved in French income tax as well if you rent, of course.

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Yep second Bob on this - at that budget you will find something desirable - check GreenAcres.

Think access - you don’t want to be clearing lots of snow all the time or paying someone to do it. Do get a big garage and have storage if you are renting, to put personal things.

Go green - in Valais solar works in the winter, have good modern wood stoves too.

Aspect is vital - get a sunny plot/location - makes a heap of difference to heating bills.

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Paying for itself is very different from paying off the mortgage. Think about it you're asking to make 480k profit plus interest over say 20 years even before bills so let's say 750k/20 = 37k pa over 10 off peak weeks plus 3 summer weeks - that's nearly 3k per week of profit you've got to clear (and we haven't even considered tax yet). To ask that sort of money you need a pretty swanky place with little competition (to get the occupancy) which won't come for under 600k

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And if you pay a lot more the opportunity cost of the capital......

On the positive side DOTM you could also factor in accumulating value - buying carefully could be advantageous - with Alpine inflation running somewhat above other areas…

You know it makes sense.

It's difficult to have any confidence in continuing property price inflation - nice to have, but difficult to factor it in to a sound financial appraisal. And if you factor that in, you also have to factor more general inflation - to make an educated guess at real price inflation. And transaction costs would eat up some of that, as would tax.

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

@Comptp, it's a pipedream bruv don't waste your time.

A snowHead

There are complications about buying with someone else, too. One of the apartments near ours was bought by two couples, friends. It went well for a few years, then one of the couples needed out. They remained very good friends, there hadn't been a falling out - it was just that things changed. The couple who remained, who became friends of ours, decided to buy them out, as they loved it so much, but raising the finance wasn't easy for them. Fortunately they decided on a French mortgage. Fortunately because French lenders were much tougher than British ones, at the time. They had to provide many years of financial data from the company they ran, and he had a very thorough medical which discovered he had prostate cancer. Fortunately caught very early - he was shocked, a relatively young, fit guy - good skier and strong MTB-er. He made a full recovery! We used to swap weeks with them - they always had friends who wanted a place at half term, when we always absented ourselves, and took theirs for a week in a low season period, with empty slopes and no lift queues. No money changed hands, no French income tax to pay.

A snowHead

@pam w, I often think that, if one filleted the forum for your posts, there would be enough material for several biographies! wink

Well, the person's real but it's just a made up name, see?

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@Comptp,
How many people would it be for?
What square meterage are you looking for?
What sort of ski resort are you thinking of - small/medium/large; family friendly; snow sure etc?

Anyway, snowHeads is much more fun if you do.

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A ski apartment shouldn't be thought of as an investment, but rather a desirable spend. That way it will not be a disappointment.

The original posed problem is a bit too vague to be able for me to offer any advice other than, perhaps, look at towns nearish to ski areas such as albertville or grenoble where 3 bed houses are more likely to be found for circa 400 thousand euros.

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After all it is free

Wow, so much helpful response its hard to answer each part. But I'll try.

The primary thing isn't financial, if it only paid off the mortgage over 25 years I/we wouldn't care, I'm 40 so have plenty of years to use/have longer mortgage. I'm selling a second home because whilst its great in terms of yield/return its not really adding value to my life. So this is a family/skiing together esc idea. Although we wouldn't want to be shelling out loads so ideally just breaking even.

Its me and my brother who are best mates and if worst came to worse and it never rented we'd be able to cover the costs with existing salaries without killing ourselves. (but not aspiration of course)

All good with apartment, sorry hadn't picked up on nuance re naming. 3 okay bedrooms (two doubles and one that could have bunks) would be fine), sitting room and kitchen not so small you'd want to kill each other and you'd be able to have a pullout bed in, but no need for it to be a palace.

Keen for family friendly ski, ideally bigger ski area or access to bigger ski area key. Not wedded to a place as such. So any recommendations really welcomed

The idea of spending less, (on Greenacres you seem to be able to go 260k euros, great website so thanks), slightly further out but not formally renting as such is interesting and using the family friends model. I can do enough DIY to make a place fresh but wouldn't want to totally refit (I can tile, plumb etc). Also the idea of maybe letting one of the Xmas weeks is interesting.

Thank you all so much, even those less keen on the idea. All the views are so welcomed

Lots of good advice so far. We took the plunge 3 years ago, having found the property we didn’t think existed in our sort of price range. COVID has definitely caused an increase in prices plus a shortage of properties.
Things to think about.
1. How much space do you want/ need. You seem to have thought about that already.
2. How far away from the lifts are you prepared to be? The further away you are, the more space you get, but the rental opportunities drop.
3. Storage and/or garage. 2 families’ ski gear permanently in situ takes up space, and if you do intend to rent the place out you need to be able to shut it all away.
4. Views? Outside space? They up the cost.
5. Don’t underestimate being drawn to the mountains more than 6 weeks a year.

In terms of property management, you can find locals- often ex pats here in the 3V - who run property management companies and may charge a small monthly fee, or (as we do) you find someone who you can use on an ad hoc basis.
We found our place via a local agent. We had rented through the same agent for a couple of seasons, and made it known we were looking. Also look at leboncoin - a multifaceted french online marketplace- which has professional and private sales.
I’d suggest spending time exploring the resorts you are interested in and really get to understand the wider area and local market. The sort of accommodation that’s great for a week’s ski holiday, may ultimately not be what you would chose as a holiday “home” where things like space start to feel more important than walking to the ski lift.

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Our place was just a few metres from the piste - not ski in/out, but a VERY short walk. It also had stupendous views. Both turned out to be absolutely key. We had a lot of family time there with various groups, often including skiers and non skiers, and kids of all ages. The fact that people could go out skiing without having to get a car out, and perhaps just for a couple of hours, was hugely important. It was on the "rez de jardin" which meant skis and boards were just stacked out on the terrace, easily accessible, and you could step right out onto the snow. Snowballing, bit of sledging and snowman building right outside the door - and when the grandchildren were very little that was crucial. And the view meant that it was a heavenly place just to "be", with a terrace big enough for a table and chairs (and loads of skis and boards). We were there up to 5 months a year (just retired), including loads in the summer.

What would your mortgage repayments be? That's not too difficult to know (though interest rates are rising....) and is the starting point for how much "profit" you need to make. Covering the cost (or even just the interest) on a large mortgage is quite a big ask, if you only have 3 "peak weeks" to rent it out. (This, and all my comments, relate to France - I don't know about anywhere else. The four "vacances scolaires" weeks are the peak rental weeks, along with Christmas and especially New Year).

Having your own place is great - but my instinct is that you would be lucky to cover the cost of the mortgage.

One huge advantage of your own place is not having to travel on those awful peak season weekends. You'd generally lose that for half term if you were renting out the other three weeks.

@BobinCH, I suspect things are different in Switzerland, and yes bookings have been higher this year than in previous years. TBH I don't look at current prices very often.

You know it makes sense.

lots of talk about ski pad never being an investment & I have to say I entered my place 7 years ago with that mindset, but you cant deny the massive price hike that there has been in the last 24 months, frankly huge.
The OP seems to know exactly the point of a ski pad, he is changing a money making BTL that gives him no joy into a ski pad that makes him very little money but gives him a lot of joy.
Have to also agree on forgetting the 6 weeks use, guaranteed you'll end up going out for weekends with mates & if i am understanding the dynamics you will have weekends for you & your mates, brother & his mates, your wive & her friends & SiL & her friends, so with all that I doubt you will have many full weeks left to rent.

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

A snowHead

Another thing to consider is whether a cheaper resort that matches your m2 price target will retain that value in future. I think that climate change will make a difference to this quite quickly.

I am writing this looking at the rain outside, haven't seen anyone on the main resort lift all morning.

A snowHead

Well, the person's real but it's just a made up name, see?

sure it will cost but in my sums anyway I added up what we spent annually on holidays & it did not work out that much more, add to this it also opens up some on going savings, you are not paying for luggage or ski carriage or ski rental, for a family of 4 that approx £400 per trip less. then for us anyway we avoid the costly sat/sun new year/half term flights, we go out Friday evening return Monday , that's approx £300pp saved on these flights.

as an illustration:
Family of 4 half term , flights 4x£450, luggage 4x£100, accommodation 7x£200 =£3600 + passes.
Us at half term, flights 4x£150, no luggage, no accommodation = £600 + passes

yes of course we have to pay annually for the apartment but in that 1 week alone we saved £3000 & it only costs us £6000 a year to run the place

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@rjs, sounds grim, where are you? I do agree with your point on low altitude places making questionable investments and the price of the high altitude places already being through the roof.

Orelle may be somewhere where prices are still reasonable that is yet to have a heyday, although people have thought this before and lost (or at least not gained) money on it. The below ticks all of the OP's requests and is well within budget. If it looked more appealing in the summer months I could be tempted by a small flat there

https://www.green-acres.fr/en/properties/house/orelle/Atyvxztl4ps17dz9.htm

Anyway, snowHeads is much more fun if you do.

[
as an illustration:
Family of 4 half term , flights 4x£450, luggage 4x£100, accommodation 7x£200 =£3600 + passes.
Us at half term, flights 4x£150, no luggage, no accommodation = £600 + passes

Why are the flights cheaper for you at half term if you have your own place? No luggage bit I get, but not the flight cost.

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because I dont have to go out on a Saturday or Sunday, I go out the Friday & back the Monday

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@Comptp, masses of good advice here now. Don't forget what I wrote above, while there are a huge number of things you might like to have, you will need to end up compromising on some of them so make sure you know what is most important for you.

For example someone mentions views, and those certainly add value (and cost) to Alpine homes, and the same is true of aspect. We were happy to have an east-facing view of the less interesting side of the valley, while we lack the spectacular views in other directions we are happy that what do see is has the benefit of being in the sun most of the day, and in the hot summer months our apartment is spared the problem of getting baking hot in the afternoon. But others would have different priorities.

The British Rightmove website has quite a few Alpine listings from French estate agents, so you can spend a lazy evening researching prices in different places. Once you know your target area(s) though, you will want to check all the properties not just that selection. Just like in the UK, sellers might take a lower offer. You also need to take into account transaction costs which are higher than the UK, and ongoing expenses including tax.

After all it is free

@rambotion, It's raining here in Arc 1600 at the moment and its grim outside. We decided not to ski. But there is still plenty of snow and it is April. It snowed last night. The rain will stop, eventually, and we'll be back out skiing again.

@Jonny996 is absolutely right. You need to work out the likely net cost (realistically...) and then decide whether that is the best way of spending that money on holidays. Some people have said, in previous discussions of this sort, that they would not want to spend all their holidays in the same place. We decided that we WOULD, and we did - up to five months a year for 15 years, all year round. The spectacular view was what convinced us that this would be the case - we bought off plan, having had no intention at all of buying, after seeing an advert in the resort. We were standing in an alpine meadow looking out over 180 degree view of the mountains, Beaufort Valley and Mont Blanc. We never got tired of it - and I only sold, several years after my husband died, because I did not spend as much time there, on my own and - more important - I had to pay back the second mortgage on the UK house that we'd taken out to buy it. I wouldn't have taken out a French mortgage as all my income was in sterling. Just as well we didn't, given the way the euro's value climbed against the pound.

Another thing to think about is travel - for short periods, away from the big holiday changeover days, flying and renting a car works well. But for longer trips we always drove because we needed a car there. Driving to the Alps, especially with kids, is not for everybody but it never bothered me.

If you will have school aged kids for some years your options are obviously more constrained.

Somebody said three bed apartments don't rent well - but perhaps that is changing. I've been looking for big apartments for family holidays and some of the nice three bed places are extremely expensive, and availability very limited. But they're high-end, with pools etc, which I don't really need. But a lot of people no longer want to squash into tiny places with people sleeping on the dreaded "clic-clac".

Starting a list of what features you DON'T need would be a good idea - and there's food for lots of enjoyable evenings, building pipe dreams, glass of (French) wine in hand.

*Ski* the Net with snowHeads

This has all been amazing, what a group of people

So if I take it further having heard what you've said, and then people can tell me what I've missed or what they think or would add or where I've gone wrong.

A scenario that's forming

Lets say we go for a place that's €260k, that's an apartment, 3 bed, big enough to be there for that amount of time, not in the very centre of a ski slope or that's in a satellite village, somewhere in the Three Valleys (recommendations welcome) which seems viable on RightMove and Green Acre. Would probably need a bit of TLC but cool with that.

We put down €180k and borrow €80k over 25 years on a repayment mortgage, which leaves a monthly mortgage of €339, add monthly costs like council tax 150€, heating/power another €150 and another €150 for things i haven't thought about totals €750 PCM. Shout what I've forgotten.

We assume the idea that when we stay, we between us (or if just one of us is staying) pay that 750€ per week, so for example at Xmas we'd pay €1500, Feb HT the same and then say one week each in the summer (still a massive bargain, we paid €3.5k accommodation only for half term week). Both of our wives are teachers so constrained to non term time so we'd not use more than that unless not rented in the summer and then why not. So that's 5 weeks or 5 months paid of 12. We'd be able to leave kit there, drive to it etc, all of which saves cash.

That would mean that we'd need to rent out 7 months worth of PCM payments, or €5250, lets add 20% for variables so €6250 per years worth of other use. I'm guessing for a weeks use whenever there is snow, lets say Jan-March, or 8 weeks, you could charge €500 per week (? that's a question) and assume you only fill for half of that (4 weeks €2k)

If you assumed mostly friends and family use, we have friends who live in Europe who'd use at least some times and then UK family who'd get a cheap week in France, especially if you rented for majority of the summer holiday weeks. You'd have to find 8 weeks rental at €500 over the rest of the year, which seems doable. As its all friends and family you ask them to clean at the end, wash sheets etc. Use some of the 20% variable to manage but know you might need once a while to stick in more to repair or upkeep.

Smash me with alternative facts or views and problems, or just tell me its the best idea ever.

Help!!

To buy a lodge, or not

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