1) DEFINE THE OBJECTIVE
There are many different types of overseas property investors and when investing in French property for rental purposes it is very important that a buyer figures out what type of investor they are.
Is the property entirely for investment? Will you want to stay in the property from time to time throughout the year? What will your strategy be longterm? Perhaps you will retire there, maybe you’ll sell.
A one or two bedroom apartment in central Paris will rent very well, but it’s not the sort of property most people would look forward to retiring to. On the other hand, a farmhouse in rural Bordeaux might be perfect for one’s later years, but then it will not offer the same assurances over rental income.
With French property, the other thing to consider at the start is taxation. Only with new-build property can you enjoy significant tax advantages. An example here would be the Residence de Tourisme model where an owner can enjoy a 20% tax rebate over 20 years if they agree to let a management company let out their property.
Of course, a management company would only do this on a property in a highly touristic location (less rural Bordeaux, more Alps & Paris). The decision cycle continues.
2) PICK THE PERFECT LOCATION
The golden rule. As with all types of property investment, the investor must find an area with sustainable rental demand, which will be strong enough to withstand any economic disruption.
Looking at it this way (and discounting commercial property) rental investments largely fall into two categories, lifestyle and tourism. A lifestyle investment would be a small apartment in Paris, close to transport link and amenities, perfect for young professionals. The tourism play would be in the Alps of the South, in a location close to slopes or beaches.
3) CHOOSE THE RIGHT ACCOMMODATION
The age of the property, its current condition and reports on previous maintenance are all examples of key aspects should be considered by the investor before purchasing. An apartment within a Period Haussmannian style property (stone façade, wrought iron Juliet balconies) will have strong resale potential, but if the building has been poorly maintained it could easily work out badly for the investor.
4) DETERMINE THE RENT
Just as with everywhere else, local lettings agents will know where the market is at and be able to provide you with your achievable returns. Yet this doesn’t mean that you can’t do your own research.
MeilleursAgents.com and INSEE both provide details on property rental and Adil (housing information department) can also help individuals calculate the rent of property in certain areas.
5) RESALE STRATEGY
Just as we mentioned at the start, the resale strategy must be inline with your overall expectations of the property. More than anything else, an investor must be confident that they will be able to sell the property on relatively easily when the time comes.