Where to start... South of France

Hi
My husband and I have been toying with the idea for a few years of investing in a property in the South of France. We have visited the area a few times on holidays and know the type of property we would be interested in.

We want to stay out of the cities but still be within driving distance of them. Ideally looking for a villa with pool that would have a good rental income during the year and be orientated towards families.

I would like to know if it is a simple case of the more you invest the more the return? Would we ever see a long term return from an investment of 500K in one property?

We would also like to use the property ourselves for holidays and could see ourselves retiring there in the long run.

Having looked at the rentals for similar properties you could theoretically achieve up to 5K for peak summer weeks.

Don't want to appear too green - but is this really achieveable?

So after all these questions, where do I start. Is there a book on the subject that someone would recommend. I want to do my homework on the legal, financial and tax aspects before I get to excited by all the euro signs.

Many thanks in advance
Sinead

Hi Sinead
Everyones situation is different but for what its worth here is what we did. We purchased in the SoF last year. Initially we had a similar idea, but smaller budget, to you. As in family property, rent part-time, self-use and possible retirement use.

At the time I spoke to a knowledgeable colleague (tax consultant) about the tax implications etc. However, IMO the most valuable bit of advice that she gave was not to mix emotion with investment.

In other words what she said was if you want a holiday/retirement home then buy that but dont expect it to yield a substantial (esp after costs of renting etc) or regular income. Simply view it as our home in France that perhaps make some contribution to its own cost.

Or buy an investment property with zero emotional attachment that you simply rent out and forget about it.

We went with the zero emotional attachment and for us that was the way to go.

Personally, if I had a budget of 500k (and I mean a borrowing budget not cash) I would look at the possibility of buying two properties. One as a pure investment property (appartment for less than 200k) the other as my personal use property. Especially if you can only use the villa for only a couple of weeks in the year. Although you would have to settle for a smaller villa. Spread the risk. Then come retirement you have two properties in your portfolio to use towards you ideal retierment villa.

Although, like you I would be interested in hearing from people who have managed (or tried) to combine personal use/investment in the one property.

Perhaps the reason you have being toying with this decision for a few years is that you are mixing emotion and investment. Would it be easier to make the decsion if it was a pure investment?

Cheers and good luck.
CrazyWater

Hi Crazywater
Thanks for your reply.
Think you have hit the nail on the head with the investment/emotion mix.

A major part of the purchase decision is buying a place where I can picture us living in 20 years. This is also our first venture in property investment (apart from our own home here in Ireland) and need to thread carefully as if this goes belly up thats our only chance/savings down the drain.

For this reason I would rather gamble on a 'sure' thing and feel that a bigger house/villa would be a safer bet in the long run. Also as we have a family we always tend to rent houses while on holiday and have never rented an apartment. Don't know much about the market or what to look for in that department but would know the 'right' house in an instant if i saw it.

Can I ask where exactly you bought, and if the investment is turning a profit for you so early in the game?

Wifey
Lots of things change in 20years and what you like now might not be what you will want then. Also there is no such thing as a sure thing all investment comes with a risk and the best strategy to cope with it is diversification. Since it would be your first investment property why not start at a level that allows you to sleep well at night. Rather than get tied into something large with a heavy emotional attachment.

Anyway I'll PM you later with some of the detail of what we did it might help you.
CrazyWater