Renting appartments

A snowHead

I am thinking of buying an apartment in the french alps. As I am thinking also in terms of investment, can anyone tell me how many weeks a year you can actually rent these appartments? I can imagine that it would be between December and April, no?
Thanks!!

A snowHead

Madalena, if you choose the right area you will get summer rentals as well. Knowledge is king!

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

Madalena, We go through a local estate agent. We find that the apartment is occupied for the 14- 16 weeks out of the 18 week season. The week before xmas has never been used other than when we take it ourselves. You may get less weeks if you are renting it out yourself and not through a local estate agent however you pay for the pleasure at about 30% to the agent. Saying that if you have any problems in the apartment eg leak from apartment above they sorted it out without me having to go to France myself.

Where are you thinking of purchasing? By the way Madalena, welcome to snowHead

Do not count the summer season in your rental. You may get a couple of weeks but consider it as a bonus. A leaseback scheme may work best for you, we did not go for the leaseback and it is working out well but we use the property a fair bit and so the minimal usage from the leaseback did not suit us.

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Thanks!!!

I am not sure yet where I want to buy it, but so far I have been looking in Trois Vallees, Paradiski or Portes du Soleil. Not that I have excluded anything else, it's just that I only now started to look and I am still trying to find the best options. I am opened to other suggestions!

I am also searching which agent to talk to or if it better to talk directly to particulars to avoid fees, although it's more difficult to find.

And of course I have to see if it really is a good investment! I hope so!

Anyway, snowHeads is much more fun if you do.

Have you thought about switzerland - I spend alot of time dreaming about buying a property that's genuinely my own (I have a leaseback in oz en oisans). Int erms of apartments you seem to get a lot more space for your money in say nendaz which gives access to the four vallees and which I anticipate would have good rental potential

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This is our first year, we have rented out a total of 13 weeks, 9 in Winter, and 4 this Summer. I expect that to increase next year though.

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We have an apartment in Ste Foy and have been letting the it ourselves through various websites and can rent out the expensive weeks out 3 to 4 times over. (Christmas, New Year and February) If only it were the same in January and March!! As said earlier treat summer as a bonus, although I cannot understand why more people do not visit the Alps in the summer.

After all it is free

Madalena, we were fully booked from the first weekend in February until the weekend before Easter barring a couple of days. January was a different matter, but we had just moved in on Christmas Eve.Fogliettaz, nor can I , but tried to target my summer advertising towards the French market. All my summer bookings are from the UK though, so that one didn't work.

So, on the whole you would think it is a good investment, right?

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Madalena, I do, as it has given me a lot of pleasure too. We have used it ourselves for 5 weeks this year. I should cover most of my expenses this year, and all of them next.

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Helen - I'd say your is going to be a pretty spectucular investment in terms of enjoyment and long term financially (if you ever sell). You clearly love the place. The apartment seems smart and proximate to the skiing. Other skis resorts are easily reachable _ Milky Way Les 2 Alpes & Puy St Vincent. Serre Che seems to be a a place that is attracting investment. MGM are building there or are about to. Those drags can't last forever. You seems to be heading the right way to rent it out as much as you need to. Added bonus for you as an investment is increasing flights to Grenoble. The websites say Turin is nearest airport but would have thought Grenoble slightly nearer.

I've only skied there 1 day but thought it was very pretty althoguh I seemed to spend a lot of time on my back-it was my first week's skiing and I did a wipe out on top of a red and went 200/300 metres before I stopped.

Madalena I was always told the realistic winter rental season is 16 weeks. Christmas to Easter with I suspect the biggest difficulties to rent the 2/3 weeks after New Year

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dan100, Grenoble is exactly the same distance away, but the route is longer because of the Lauteret. and more likely to close in Winter. They have improved the roads recently between Turin and Montgenevre. The drags are disappearing rapidly, you can get around and avoid most of them now. Our swimming pool is being built now.

Madalena, I'd agree with Helen Beaumont, . Make sure it has a summer season as well - not sure that Trois Vallees does. We have an appartment in Peisey-Vallandry & let it out (when not using it ourselves) to mainly friends. Last winter it was occupied for all but about 10 days. This summer about 4 weeks are taken so far - & that is without either my brothers or my families using it - we normally would.

dan100, the 2/3 weeks after New Year are usually the first to go!

You know it makes sense.

geri, ours was empty then last year, apart from the first week, I blamed that on only just moving in though.

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

Helen Beaumont, We've got several skiing friends with kids away at uni & working ( Shocked

) who like the quiet slopes at that time. My husband & I also are at that stage & tend to take a week then too.

A snowHead

geri, I like to go then too. All our friends have school age kids though. We do too, but they are old enough to be at home without us.
My favourite time, as the snow is usually better, less ice and slush.

A snowHead

We chose Chamonix for our little project as it has a very strong summer season.

The bank allowed us to use a 16 week rental year for our business plan's income projections. I hope to do rather better than that. (2 weeks Xmas NY, 5 weeks Feb hols, 8 weeks summer + 1).

Not many places have such a good summer potential.

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

Madalena, As an investment, property in France is subject to a 30 per cent CGT on any profit when sold. There have been some spectacular price rises in the last 10 years and good profits have been made. Now though, Eurozine interest rates have started to rise and I can see a situation where property prices could stagnate (like in Spain) or, heaven forbid, fall! The very long term should be good but I do suggest the time for easy profit could have passed.

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Anyway, snowHeads is much more fun if you do.

pam w, yes I believe it does although not sure of the scale

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http://www.frenchentree.com/fe-legal/DisplayArticle.asp?ID=851. I found this, but not sure how up to date it is.

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pam w, I was 'stung' for nearly 10k euro's CGT last year when I sold a flat in France. If I had owned the property for 15 years there would have been zero to pay. It is a sliding scale up to 15 years ownership.

After all it is free

pam w, Yes, it's heaviest in the first 2 years, 60% I've been told, the next major break point is 5yrs, then diminishing to zero after 15 yrs.

David@traxvax, quite. We weren't able to complete our purchase until last month because the vendor need to reach her 15 year anniversary. Suited us fine...

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Helen Beaumont, Useful link, thanks.

Madalena, I think French property is a good investment generally, but is not so subject to massive rises and falls as the Uk market - I don't know about Portugal. Personally I always advise against leaseback as it's so restrictive, and most people I know with properties to rent out have a reasonable number of weeks rented, providing the apartment is in the right place and is nicely presented. The first thing to do, though is to decide where. The places you mention will have good winter rentals but the price per square m will be very high. Look around and do lots of research first.

BTW welcome to Snowheads.

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I think it's more for French residents because of the social charges payable.

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In addition to French CGT, UK CGT is payable on foreign property disposed of by UK taxpayers. While there are some reliefs UK CGT never dimminshes to 0 so you will have UK CGT to pay even if sold after 15 years (unless you are abroad for a whole tax year in the year of disposal). If in doubt take expert advice. Any French CGT paid can be offset against your UK liability if you dispose within the 15 years.

You know it makes sense.

Thank you all! I am still dooing lots of research. The places I was looking were indeed some of the most expensive, so I now considering other ski resorts also and taking into account the summer period also. (I am opend to suggestions). There are so many hipothesis that I still have a long way to go! I also have to compare the possibility of buying in Switzerland because of the CGT issues. Again if you have some hints regarding property investment in Switzerland please let me know! Smile

Thanks again!

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

Madalena

I think in Switzerland if its your holiday home you don't pay swiss CGT or income tax but sadly declarable here in the UK. Also in Switzerland, I think there is a rule about not disposing of the property for 10 yrs but I've never pusued the research that far to understand the implications-I'm sure others have.

You do need to factor in high acquistion costs especially if buying with a mortgage

Pam- there isn't an indexation relief anymore for CGT. Instead there is a tapered relief of upto 40% of gain after 10 years e.g if you buy property for 100k and after 10 years it was worth 200k. 40% of your gain would be exempt from CGTso only 60k is potentially subject to CGT. you also have an annual allowance presently worth 7900 and so would pay CGT as 40% of £52100 ie £20,840. You can offset against this any CGT payable in foregin countries. you may also be able to offset certain costs but someone else will have to give this advice and you can offset CGT paid in france.

Pam - I think you have a sound view. Like Helen B you've made a fantastic investment because you love your place

brian

I think if you're a UK resident, French CGT you pay counts against your UK CGT liability, ie. you don't pay twice for the same gain, so that might not be so bad.

In Switzerland things vary canton to canton, but for Valais (which includes the Swiss PdS, Verbier and the 4Vs and right along to Zermatt and Saas Fee):

- CGT is charged but on a sliding scale over 20 years, it dwindles to almost nothing by about 15 years.
- there is no inheritance tax
- you can't sell to a non-Swiss in the first 5 years unless you apply for special permission on grounds of illness, unemployment etc.
- even if you sell to a Swiss, iirc you're not allowed to make a profit.
- you're only allowed to occupy the property for up to 6 months of the year without applying for Swiss residence

Swiss mortgage rates are historically lower than the UK and the Eurozone, current variable rates are around 2.8%

For links to more Swiss agencies than you could shake a stick at:

http://www.les-agences-immobilieres.ch/

You can see what I'm buying here (I think there may be one or 2 left):

http://www.anniviers-immobilier.ch/html/les_alpes.html

Help!!

Renting appartments

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