Investing in a holiday rental business in France

If you are thinking of buying a property as a long-term investment, you could do much worse than buy a property to let out for holiday rentals in France. Depending on the location, it can be a year-round business with the added benefit of providing a family holiday home. In terms of lifestyle investments, it is certainly more fun than investing in shares or Bitcoin and probably safer too.

Of course, as with any investment, there are disadvantages as well as advantages (the value of your investment may go down as well as up etc!) but, if well-managed, the benefits should certainly outweigh the downsides in the long-term:

Benefits of a holiday rental property

• An opportunity to acquire an asset and use it as an income-generating business
• Generally higher yields than a traditional buy-to-let investment
• Better capital return thanks to the additional value of a business and established rentals
• You and your family can use the property if and when you wish
• Great way to buy and try out a potential future family holiday home
• An excellent alternative retirement/pension income plan
• Demand is strong for self-catering holiday accommodation all over France from the French as well as foreign tourists and, more importantly demand is growing in both markets. Remember, France gets more tourists than any other country in the world
• Holidays in many parts of France have year-round appeal so you have a continuous, annual income stream
• If you are mainly looking for a family holiday home, renting out your property for a few weeks per year can cover all the costs hence effectively providing free holidays

Disadvantages of a holiday rental property

• Involves a lot of management. This will cost you money and /or time. It takes more time and effort than a traditional buy-to-let investment. You can of course employ the services of a property management company but you will need to factor in these costs when working out your budget and your potential return on investment.Initial set-up costs can be high as a holiday rental has to be well-equipped and durable and there will be turnover of high-use items and furnishings.
• Maintenance costs can also be high especially if you are employing someone else to do the cleaning and maintenance
• Mortgages for holiday let properties can be more difficult to obtain and if you do get approval, expect to put down a 25-40% deposit.
• It is worth ensuring that you can afford an extended void period for whatever reason (pandemic anyone?)
• It is important to understand websites, marketing, and social media if you want to ensure bookings. This means making time on a daily basis to work on these, promote your property and deal with enquiries and bookings

How to identify a property that will offer the best holiday let returns

• A cliché though it may be, location is just as important for a holiday house as for a permanent home. When choosing a location, remember to keep potential future clients in mind. Imagine what most guests are likely to be looking for when on holiday
• Make sure there is some ‘wow factor’ whether this is the interior design, incredible views, fantastic coastal, mountain or city location or the facilities provided. Standing out from the crowd will ensure you get noticed and hence get bookings and good reviews
• Keep within two hours of an international airport and major city; accessibility is important
• Target areas with broad appeal and year-round attractions and activities
• Choose an area both where people are likely to want to stay for longer periods at peak times and weekends off-peak
• Make sure your location has a café, a bakery and small shop close-by at the very minimum and preferably a restaurant and good walking, cycling and activities
• Think about the type of property, the quirkier or more characterful the property, the more popular it is likely to be

If you need help finding the perfect French property, please get in touch: nadia@foothillsoffrance.com