You don’t have to be a property investment expert to see why so many people bought houses in France in the last twenty years. Over the period, all French property has increased enormously in price. But that was then. Is French property investment still a viable option or are the good times gone?
The answer will depend on where you are now and what you want your investment to achieve. There are still places in France that are likely to achieve significant growth but the day of the fast buck has gone. If you’re looking for a good return over time I would say that the French property market still has something for you but if you’re looking for something to buy now and expect to sell for a 15 or 20 per cent profit in a year or two, forget it.
There are lots of leaseback deals, and potential investment opportunities do exist in new build flats and community developments in big tourist areas like the coast and the Alps, but you need to have considerable money to invest in the first place and the advice of a good accountant to see whether these are tax efficient for you. It’s not an area that I am qualified to comment about.
For the ordinary person like you and me French property investment returns come down to two areas: renovation or holiday homes. So let’s look at those a bit more closely.
There are still plenty of opportunities for property renovation in France. There are houses falling down all over the place! But are they a good investment?
Well for a start, in general it’s much cheaper to build new than to renovate. That’s why there are so many tumble-down French properties around, many of the French don’t want the hassle and are happier with a new house. You would think that would be great news for the foreign buyer looking for a renovation project.
It is and it isn’t. There’s certainly enough availability and prices in many areas are still sensible. The difficulty comes with assessing just how much work is needed and what it will cost. Even if you’re a builder, plumber or electrician, French regulations are different. Twenty years ago they were very lax but now you need certified installers for this and that. French artisans are almost without exception very good at their trades – but at a price. You have to be very careful not to jump at what looks like an opportunity only to find it’s a money pit. You can certainly do it, especially if you’re prepared to get your hands dirty, but make sure it’s your head that rules, not your heart!
So what about holiday homes? Is that the best way to good French property investment?
If you’re prepared to let it out to others, you’ll certainly recoup some of your expenses and, over time, the French property market is still heading upwards (if not at the high percentage rates of a few years ago). Once again it’s a longer term investment.
That in a nutshell is the secret of French property investment at the moment. If you’re looking for out and out returns, other sources probably provide better options. However, if you’re thinking of buying in France anyway, and you steer away from the hotspots (coast, Alps, Dordogne) you’ll find plenty of properties that are bound to increase in value over the years and you’ll probably be having a great time while they do!
