French Real Estate: The ABC of Rental Income

French Real Estate: The ABC of Rental Income

France commands pole position as the most visited country in the world so, naturally, one of the choices for those property buyers who are looking to self-finance their dream is to offer guest accommodation. The concept is tempting – to work from home at your own pace, far from the rat race and in a beautiful environment. But is it really a viable option?

Explore Your Choices

There are multiple options, depending on how much income you’re looking to generate, and the amount of hands-on involvement you’re happy to adopt. Almost any property can be made suitable for guest accommodation, from an upscale Alpine ski chalet to a rustic Provençal olive oil farm.

To supplement your income during the tourist season, running one or more self-catering gîtes may be suitable. Bucolic rural gîtes are appealing to visitors, although the ‘high season’ can be deceptively short in some regions.

Another alternative is to run a chambre d’hôtes (bed & breakfast) in a high-demand location. A larger property could be set up as a hotel, although this would be subject to an altogether different set of rules and requirements.

Know the Terroir

Talk to people with first-hand experience of running accommodation so you know what to expect. The Brubackers, who own a stunning holiday cottage in the Dordogne, told us that “time moves at a different speed”.

“The closing process for the purchase seemed to take an eternity,” they explained,” even though we had everything prearranged with the bank for our mortgage.

“We hired workers to take care of the property renovation while we were in the US but felt that nothing was getting done. Consequently, we had to stay on-site for a month to supervise, and spent most of that time working full time, alongside the artisans.”

Paul, who swapped a fast-paced career as a London lawyer for life in verdant Gevrey-Chambertin, Burgundy, where he owns a luxury boutique hotel, reasons that, “You need a large budget – it’s a lifestyle choice, not an economic prospect for commercial return. If you do it for any other reason, you may be better off just keeping your money in the bank.”

Avoid the Pitfalls

From a professional perspective, French property expert Gaëlle Perreaux-Booth, the manager of FrenchEntrée Property Services, points out the three main pitfalls:

Bigger isn’t better: “People fall in love with a rambling property, thinking that they can renovate the outbuildings to turn them into lots of units. Because the cost of the property may seem low compared to the space offered, buyers fall into the trap of thinking that the renovation costs will be proportional. Add in work on the grounds, garden, pool and any common areas and the costs do mount up. It’s clearly the case that bigger isn’t necessarily better.

“When you hire specialist artisans in France, the bills add up quickly. If the owner isn’t on site there should be a project manager involved – their services effectively pay for themselves by avoiding costly mistakes and delays.”

Lack of marketing: “Your competition will be savvy and proactive so it’s really important to publicise and create visibility early, way ahead of the opening. Guests can’t be expected to find a place that isn’t being promoted.

“A website that’s linked to tourism sites is an absolute minimum, but it’s just the beginning. For example, a gîte needs to offer something unique and stand out or it’ll get lost in the maelstrom of the other 50,000 or so on offer.”

Overblown expectations: “A hospitality business can quickly come under pressure from external factors, such as an adverse currency fluctuation. It’s a crowded market and you’ll all be competing for the same guests.

“Although it’s possible to make a living from a property and even clear a profit, expecting too much revenue – particularly in the beginning – can choke the business. The most successful operations add ancillary offerings, which can consist of selling local products, hosting receptions, cooking or wine tasting workshops, or art and cultural activities. These help to support your income stream and, crucially, to extend the ‘season’ beyond its peak period.”

The right French property for you is still out there, you just need to do a little homework beforehand so that you can enjoy the richly rewarding adventure which lies ahead.

Contact FrenchEntrée Property Services on +44 1225 463752 or email [email protected]FrenchEntrée Property Services has been helping international buyers find their dream property in France for a decade. With over 120 estate agent partners they are able to source any kind of French property, priced from €40,000 to €40 million.

From France Today magazine

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