A French estate agency, Gites à la Francaise has spotted a niche in the French real estate market – concentrating on selling property which has an income producing capacity such as gites or flats which can be let as holiday homes.
The concept isn’t new, and this specialization highlights the difficulty many buyers have obtaining funding nowadays. The agency’s MD, Simon Oliver says “In the past, UK buyers in France could afford to buy a property in need of renovation, spend six months to a year doing up the place and creating a couple of gites or a B&B before finally profiting from their investment two or three years down the line. This is no longer attractive: today’s buyers want an instant income stream as soon as the deal is closed.”
The agency specializes in finding interesting properties in appealing parts of France such as the Dordogne, Gascony and Languedoc, and which already have a B&B structure or gites in place; many are already going business concerns with successful track records going back several years.
Oliver went on to say “A typical property is a small estate with land, a main house and one or two income producing gites. The gites will produce a steady income-between €20,000 and €50,000 per annum-which means that most properties have a ROI of around 7-10%.”
This is already a pretty good return, but many of the setups are currently run by owners approaching retirement and have considerable scope for improvement. Better marketing could extend the letting season by up to a couple of months, and there are often disused outhouses or attic space which could be transformed into furnished accommodation.
France is increasingly seen as a desirable place for a holiday home or even to live full-time. The 2011 Quality of Life Index, by comparison website uSwitch saw France emerged as the clear favorite, as it claimed first place for the third time in a row. The French real estate market is seen as being relatively stable as the price declines were far less dramatic than in other real estate markets.