French Property: Town or Country?
When buying a permanent residence, holiday home or for investment, deciding on the location, not just the department in which to buy, can be a difficult choice. Many people fall in love with a property and then let everything else take a back seat, but when buying for pure investment, the decision should be made purely on where you will get the best capital increase and a good and reliable rental. I would normally advise a town or city property for this purpose, for several reasons.
Towns attract a working population all year round, giving rise to huge demand for properties to rent and buy. This will push up prices if demand exceeds availability. Many French people rent in town and own their own home further out where they spend weekends and holidays. University towns allow investment in student accommodation, which is cheap to buy and has a consistent rental demand. Towns that have attracted large international companies, such as Montpellier, Marseille, Lyon, Bordeaux, Toulouse and Nice, are likely to have an increase in demand for housing.
The government has invested in many of these towns to provide better transport links, which will attract more businesses. In these cities it is possible to buy leaseback properties (usually with no personal use) or those offering guaranteed rental. Many other cities and towns from the north to the south fall into this category, so decide on a general area and take it from there. These towns are being brought up to a higher standard so base prices are still reasonably low against Paris, for example, where prices have already greatly increased.
Town centre rentals If you prefer a town property for your own use, but want to rent it out when you are not there then you need to consider who your renters will be.You may find that you get holidaymakers wanting to see the tourist attractions and preferring to stay in an apartment in a town than an hotel.You may get some longer term rentals from people on short-term work assignments or students during term time.
You need to keep in mind when choosing a property for your own use and to rent out that you will need to attract the widest selection of renters so the more reasons there are for people to want to be there and the more benefits your property can offer compared to others in the area, the more rentals you will get. However, the priority is that you love it and want to be there too. So whether it is a town or a rural property as long as there are enough plus points you are bound to be able to rent it out part of the time. You can also take advice from local rental agencies.
Rural locations If you would rather buy an investment property in a more rural location, look for areas that will attract long-term renters, i.e. places where people want to live permanently. Consider the reasons why people are likely to want to rent; for example is there an international school nearby which would attract families relocating for work, who might prefer a rural family house to a town apartment? There could be projects in the area that attract an international work force who might prefer to live in the lovely countryside and commute a short distance to work. Properties not far from an airport would perhaps attract people intending to commute regularly to the UK, but who want to benefit from ‘the good life’. When buying for investment, but with the possibility of using the property yourself (either as a leaseback or classic purchase to let out when you are not in residence), then the decision is slightly more complicated as you need to choose an area that you would enjoy if you are to fully benefit from it. For this you need to decide where in France you would like to be – if at first it appears that you have no preference then consider what you would like to spend time doing when you are there, what type of weather you prefer and so on.
The importance of journey times and ease of access will depend on whether you intend using your property for lots of short trips or for longer periods. Rural properties can vary tremendously from area to area, with some being more isolated and further from amenities and neighbours, while others can be within walking distance of a shop with neighbours surrounding you.
Buy to let If you intend to buy the property primarily to get some income from rentals, then I would advise buying a property that is not too isolated and is near amenities, tourist attractions and activities so it will appeal to other holidaymakers. Although a nice property will always rent out for holidays, the more plus points you can offer, the more rental weeks you are likely to get. It should be attractive from the outside so it will look eyecatching in all your publicity, as this, as much as its location, will attract renters. If you are buying in the warmer areas of France a pool, or access to a pool, will ensure more rentals – the extra rent received will more than pay for it over a few years.
Alternatively choose a property near the sea or a swimming lake. Facilities such as golf, fishing, excellent walking country as well as pretty villages with cafes and restaurants will be important to holidaymakers as well as tourist attractions in the area. Easy access to the property is important.Your property should be within an hour of an airport, a TGV station and not too far from an autoroute so your tenants can use all forms of transport. Rental amounts can vary considerably. If you rent out full time the rent is likely to be between 4.5% to 6.5% but if you let out on a holiday lettings basis then you will get some very highly paid weeks, some low paid weeks and some empty weeks.
If you buy in a town where there are lots of seminars and events it may increase the number of higher paid weeks so it’s worth looking at what events there are nearby. Bear in mind that rentals can be higher in some of the southern areas where properties are more expensive but that holiday lettings in northern France can continue throughout the year too as nowadays not everyone is looking for the sun. There are lots of rural activities available and if you make sure you property is warm and cosy for the winter it can be an attractive proposition to stay in during colder weather.
Pleasing yourself If you are lucky enough to be buying a property purely for your own use then the choice of town or rural property will entirely depend on your own preferences. Do you like the hubbub of a town? Do you want to be able to walk to shops, restaurants and bars? Are you happy to be in a more urban environment with lots of people and traffic? Town properties will always be a good investment and you can count on good capital growth and ease of selling when you are ready. Some town properties have leisure facilities such as a pool as well as gardens.
Remember that a parking space is preferable with a town property to make it saleable for the future; even if you are not planning on having a car it is worth buying a space with your property. Or do you prefer the tranquility of the countryside? The wonderful thing about France is the diverse selection of architecture available. Prices are likely to be lower in the more inaccessible areas, perhaps central France, which are not close to the more popular cities. These areas perhaps do not attract the working population so the demand for housing, and therefore the price they command, is lower. They will offer extremely good value but their capital growth may be slower. However, there will always be buyers for beautiful rural properties so if this is what you are looking for you will have an opportunity to buy the property of your dreams within your budget and spend many happy years enjoying it. If the rural area is has an airport serving the cheaper airlines this will help to create more capital growth in your property as the demand for second homes in the area will increase.
Penny Zoldan founded Latitiudes French Property Agency 19 years ago. Tel: 020 8951 5155 www.latitudes.co.uk