Gites in France, other investment property and holiday villas in France
Many people shy away from buying a French holiday villa because they feel they will not use it enough. In that case why not let out your holiday villa in France to use it as an investment property? Gites in France are just one type of investment property with the potential to generate income.
Investment property in France depends on type and location
A potential landlord must consider what type of tenants you want to attract to your investment property in France. Do you want a holiday villa in France for short term lets, for example, or would you rather attract long-term tenants providing a regular and secure income?
The type of property and its location largely dictate who you are likely to attract. A property in a town or city is appealing for businessmen and holidaymakers but also for locals looking for a long-term lease. Country properties and holiday villas in France will perform better as short-term lets.
Holiday villas in Cote d´Azur will obviously be busiest during the summer, whilst the winter is the best time to have an investment property in a French ski resort.
In general, city properties will accumulate the best rental income in France. However, investment property near a beach or ski resort can attract high levels of income in the short-term.
Gites in France
Gites in France are self-contained, self-catering rental properties in the country. Farm cottages, converted mills and barns and private units within a larger house can all be termed gites in France. They are privately-owned and intended to function as an everyday home for holidaymakers.
The facilities offered by individual gites in France vary considerably and you should check out the situation regarding amenities which might affect value.
Gites in France are typically secured by a deposit and paid for in advance, depending on how long the tenant wishes to stay there.
How the French leaseback scheme works
The property is provided by developers and, once bought by investors, is let back to a large holiday company who, in turn, rent the French investment property out to tourists.
You also don´t have to pay VAT on new-build properties at 20.6% along with other financial benefits. Under the leaseback scheme, the owner is then guaranteed rental income plus the use of the property for a few weeks of the year.
What are the prospects for rentals and investment property in France?
Although long-term rentals continue to do well, seasonal letting income fell during 2005 in France. Holiday villa owners are seeing customers waiting late before searching for deals on the Internet. This has affected larger properties more as smaller units are more likely to have a loyal customer base and many continue to prosper.
Aesthetics and facilities, such as pools, are increasingly the deciding factor for prospective tenants. A good photograph may draw them in but it is furnishings and facilities which will cause them to return. Demand is still high amongst British holidaymakers and increasingly amongst Irish and northern European tourists.
The market is more competitive and property prices are higher than yesteryear. A return of 5% on gross income would be considered a good performing investment property.
Finding tenants and managing a holiday villa
This can be difficult if you do not live in France. An investment property´s performance can suffer and you may have to sort something out by flying over to France. Holiday villas can be especially time-consuming due to the high turnover of guests.
Overseas-Homes-Direct.com provides an online holiday rental service which takes away the problems associated with renting out your French investment property.
Legislation in France for letting a holiday villa
For purposes of income tax, you are obliged to inform the authorities if you generate income through an investment property.
In France, holiday villas and other properties to let can still prove good to be investment property. The sector is very competitive and ski and beach properties will only perform well for part of the year. It is worth keeping this in mind and not rushing into any purchase.
