Started by T1berious in France 10-Jan-2018 - 7 Replies
We're thinking of buying a 2 bed apartment in a French Ski resort (Chamonix, Morzine or Tignes). I just wondered if anyone here has recently(ish) bought a place in France and could give me some hints and tips?
Thanks in advance!
I can't offer any advice on buying, but I'm also looking to do this, so if you get any help, it would be great if you share it?
In any event, one of the key metrics for evaluating what's on offer will be the £/m2 you can afford. So the starting point is a budget, basically, and some info on how it's all to be funded. This'll be the staring-point of any conversation with an immobilier as well.
Speaking of which, don't. I mean, don't randomly wander into an immobilier on your next ski trip. their job is to sell you what they have on their books, not advise you on options and strategy. We picked 3-4 potential places and went out on two Long Weekend trips in the low season first. Only on the second trip and second location did we walk into an estate agency. 2½ hours later we had the purchase contract signed and the keys in our hand.
So once you've got a budget and financing mechanism in mind, then there are some more questions to ask yourself: in no particular order -
Are you able to go out on a whim/short notice or are you limited by school holidays and/or work holidays?
Do you speak French or German (even a little)?
Have you considered the benefits of somewhere with good public transport links (i.e. don't have to rent a car).
How important is it to have underground parking?
Do you need good Broadband e.g. you could work there in the summer but only if links are good?
Do you have siblings or parents who might augment the cost and share ownership?
How near to the main télécabine/télésiege do you want to be? <300m? <200m?
Some random thoughts:
Realistically, apartment blocks need regular maintenance and refurbishment so you'll have both a basic annual maintenance fee and regular 'extraordinary' items. Make sure there's an established refurbishment fund being built up by the managing agents/co-proprietors. Out new boilers cost £40K. New garage doors £10K. Road resufacing £15K. The new roof will be at least £80K. This is for a block of 40 apartments, so we pay 1/40th but it adds up. It's a good idea to have an idea of how much you can afford in terms of these sorts of shared costs. And it affects your rental strategy - in our case, rentals cover all these annual costs and we wouldn't be there the main school holiday weeks anyway, so we rent.
If you're working, then realistically, you're limited by your holiday entitlement and related constraints. The point about siblings/parents is that between you, you may find that you can pool your funds to buy somewhere bigger/better and you wouldn't have any less usage than if you alone owned it.
Be careful about how you position this with relatives. it's surprising how often people assume they'll be able to use your place rent-free, even it it means you're losing a week's commercial rental. In which case, you basically subsidising their holiday. Have a clear policy up-front that relatives will pay the 'net' rate i.e. what you get after agency and cleaning fees are deducted. This way, everyone wins.
There's a lot to be said for being able to got to/from your place via public transport. Immobiliers often gloss over this, but for both clients and yourselves, not having to hire a car for shorter trips can be very useful. It also allows people to do overlapping arrivals/departures, which can be convenient.
How important are the low seasons and the summer? Increasingly, the summer season is as important as the winter. Some resorts are very lively in the summer, but others are completely dead. So do some research into the summer opening dates of the gondolas and lifts. The local Tourist Offices are a good source of information.
Proximity to the lift is a key factor in pricing. If you can walk to the main lift you pay a premium. This may not seem so important if you visit in the summer, but as you know, it makes life far easier if you're not reliant on a busy navette or having to get the car out, and can clomp your way, booted, form you basement boot room to the lift.
Some people are fixated by 'ski-in, ski-out' and will pay a big premium for the convenience. But in my experience a lot of SI-SO places may be great in the winter, but are miles away from the village amenities in the summer and low seasons. We're 5 minutes walk from the village centre and 8 mins clomp from the télécabine: we could have had a 3-bed apt or even a small chalet further away, or a SI-SO apt but that would have been a drive away, further up the mountain. Everyone who's used the place has said how good it is to be a short walk from shops, bars, cafés and the bus stop down to the valley.
Broadband and fibre cable are expensive up a mountain. Our £30/month package gets us a good cable collection, including BBC1,2,4,Cbeebies,World & ITV1-4 plus Netflix. But only 15-20Mbps. That's the Premium package - many places get very low Mbps. So worth checking what's available, especially as rental clients tend to expect reliable Broadband and Cable TV nowadays. And if you plan to work remotely then work out what the minimum acceptable Mbps will be.
There are loads of other things to discuss and prioritise but the above isn't a bad starter. You'll get loads more advice, I'm sure.
If you decide to buy in France and are going to need a French mortgage you need to get your skates on, as after the end of March 2019 the amount you will be able to borrow from a French bank will fall from 80% to 65%.
The consensus is that rentals won't normally repay the mortgage. Not unless you go full-on into renting every week you can and don't use it yourself, over a long period (in which case, it's probably not a very good property investment option) So, in order of desirability 1. You have the money to buy up-front, outright (lucky you), 2. You have the income to repay the mortgage without having to rent, or 3. (most common) you use rents to over on-going costs, refurbishments and maintenance and have the income to repay the mortgage, or 4. you can just about manage costs and repayments if you really go hard at maximising rents even if this severly limits your usage.
We got a mortgage no problem from UBS, but they did expect us to provide at least 20% equity (this was 2003, not sure how it is now). A few years later, we paid that off with a more attractive mortgage extension on our UK home at a better rate, when we had the equity to do this in our UK home.
Also, do a bit of Worst Case Scenario planning. What if you decided it really wasn't working out and for some reason wanted to sell up? These sort of properties can take some time to sell. And any profits would be liable to CGT, not only in the UK but probably locally too. In Switzerand, for example, different Cantons taper CGT differently, so for us, it tailed to zero but only after 5 years (this to deter property speculators).
Buying in CH is not the adversarial process it is in the UK - like France (I believe?) you use a single Notaire who acts independently for both parties. But like Scotland, the penalties for withdrawing a signed purchase contract are much more severe. We were glad we had all the deposit funding organised up-front as the process was fast (as I said 2½ hours from viewing to signature and key hand-over). The model of a separate buyer and seller solicitor is alien.
Also on the budgeting side, as well as (a) the £/m² budget and (b) the ongoing building budget, make sure you are realistic about (c) internal refurbishment and furnishings. If you are going to own an existing apartment for, say 10 years, then it's likely you'll replace the kitchen, or bathroom, or flooring. And probably some furniture as well. Refurbishment often needs specialists and these and their materials are going to be more expensive up a mountain.
Please don't let me put you off! Buying our Swiss apartment was one of the best decisions we ever made. It's given us loads of holidays and now we're approaching retirement, we're really looking forwards to spending more time there, winter and summer.
1 To have a parking space,preferably underground, is hugely important in a ski resort——if not it will be a nightmare parking in the busy weeks.
2 We looked at 3 properties and thought we were well on the way to purchase—only to find out the vendors had done another deal without us being told till the last minute—-so really stay in touch with your agent.
3 In FRANCE the buyer pays fees to the agent as well as the vendor—-I would feel embarrassed quoting what we paid.Iunderstand the rules have since changed and agents now have to be upfront.
4 Make sure you understand the management fees and extras—-you have no control over these.
5 If you buy an apartment there will be an owners association with an Agm once a year—-we have attended a few of our meetings but unless your French is very good you will struggle to understand what is going on.
6 Ski apartments in certain locations die in the suicide months—-April ,May,October and November—and in high locations all shops and restaurants will not be open—-go and look out of season.
7 We are in Saint Gervais,near Chamonix which is the poor man's Megeve—-450kms of piste where property prices are cheaper than Chamonix and easy access from the motorway.Always look at the satellite locations of major resorts.
8 Consider access from motorways etc—-a long drive to your resort in heavy snow can be a challenge—putting those chains on when your fingers are numb,it's perishing cold and if everyone is getting stressed it is not much fun!!
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