If you want to be a property developer in France then you must keep a tight rein on your budget and not let emotions get the better of your sums!
When:
a = Purchase Price
b = Renovation Costs
c = Re-Sale Value
d = Profit
Your profit (d) is the resale value (c) minus Purchase Price (a) and Renovation Costs (b). Don't take your eye off this equation.
Let's look at the purchase price because the cheapest buy doesn't necessarily make the biggest profit - if there are hidden structural issues the cost of renovation could be prohibitive making the prospect for a healthy profit remote. One thing is certain, in property developing you make your money when you buy not when you sell!
The ideal property is structurally sound and affordable with little work needed and a high profit margin (achieved either by adding value or by external factors such as major infrastructure or jobs coming to the area). You really have to have your ear to the ground to pick up the early tremors and pick a bargain in an emerging hot spot, for most properties there is a trade off between the 4 cornerstones of the equation.
Get a full structural survey done to be sure your investment is solid as a rock and will not turn into a money-pit. Know what you are prepared to pay for something and go no more - be prepared to walk away. Remember you're in the business of selling on, you are not buying for yourself.
You should have a budget for renovation costs, remember to talk to builders to get estimates for re-wiring, re-plumbing, kitchen and bathroom improvements etc so your budget is realistic. Budget for the following:
Labour and materials
Electrics and plumbing
Kitchen and bathroom
Windows and doors
Furnishing and decorating
Fees and Costs (eg. applying for planning permission, architect's fees etc)
Contingency (when dealing with old properties expect the worst!)
Your total Renovation budget will be well spent providing you bought astutely and your Re-Sale value warrants the investment. Factors affecting the Re-Sale value include whether your property is:
Close to an airport with budget flights
In a lively town or village
In an up and coming town or village
Close to the coast
Close to ski stations
Other factors affecting re-sale value are outside space, barns to convert, protected views or scope for a roof terrace - all enable you to add value to to your investment and increase the all-important bottom line, your profit.
Monday 30 April 2007
Monday 9 April 2007
Selling French Property (Part 1)
The key to selling your French property is to make sure you bought well in the first place. If you bought the right house in the right location at the right price then the job is half done - if you didn't all is not lost. Here are a few tips:
You will have to launch a full scale assault on the market to blow the competition out of the water. Remember you are in direct competition not only with other resale properties but in many cases massive new developments with huge advertising budgets and big marketing campaigns.
These developers pick potential buyers up at the airport, wine and dine them in a 5* hotel, give a guided tour of the show home with its designer furniture and then take them to the marketing suite to see plans and sign on the dotted line. This is what you are up against so you must do everything at your disposal to give yourself a competitive advantage - remember all you need to find is ONE buyer.
When a property isn't very large you've got to maximise every square metre of floorspace. Don't cover stains with throws over furntiture - it's quite literally a cover up and some buyers will think 'if they're covering up the sofa what else are they covering up?' Every room in your property needs re-working to make it feel like a brand new property. Invest money but make every penny count.
Replace old kitchen units, outdated tiles and worktops with the clean crisp lines of all white units and working top; remove partition walls to open out space and turn poky kitchens into ones which will impress buyers. Brits in particular like lots of space to cook in.
Your bedrooms are tiny? If you've got fitted wardrobes then keep them but strip out any other stand alone cupboards and wardrobes to make the room appear larger. The miracle of de-cluttering will show off the square meterage to the full. Simplicity sells.
In brief make your property a show home too - every detail from the furniture, the artwork, the dressings and the lighting should be carefully chosen to make it look as good as a brand new property. Get rid of the junk and the cheap furniture in favour of a chic sophisticated look and don't forget the finishing touches like a parasol and cushions for your sun-loungers.
You will have to launch a full scale assault on the market to blow the competition out of the water. Remember you are in direct competition not only with other resale properties but in many cases massive new developments with huge advertising budgets and big marketing campaigns.
These developers pick potential buyers up at the airport, wine and dine them in a 5* hotel, give a guided tour of the show home with its designer furniture and then take them to the marketing suite to see plans and sign on the dotted line. This is what you are up against so you must do everything at your disposal to give yourself a competitive advantage - remember all you need to find is ONE buyer.
When a property isn't very large you've got to maximise every square metre of floorspace. Don't cover stains with throws over furntiture - it's quite literally a cover up and some buyers will think 'if they're covering up the sofa what else are they covering up?' Every room in your property needs re-working to make it feel like a brand new property. Invest money but make every penny count.
Replace old kitchen units, outdated tiles and worktops with the clean crisp lines of all white units and working top; remove partition walls to open out space and turn poky kitchens into ones which will impress buyers. Brits in particular like lots of space to cook in.
Your bedrooms are tiny? If you've got fitted wardrobes then keep them but strip out any other stand alone cupboards and wardrobes to make the room appear larger. The miracle of de-cluttering will show off the square meterage to the full. Simplicity sells.
In brief make your property a show home too - every detail from the furniture, the artwork, the dressings and the lighting should be carefully chosen to make it look as good as a brand new property. Get rid of the junk and the cheap furniture in favour of a chic sophisticated look and don't forget the finishing touches like a parasol and cushions for your sun-loungers.
Is France a safer investment than Spain or non-EU countries?
A staggering 1 in 10 Britons have now bought abroad in search of sun kissed beaches or idyllic villages. But for those who have bought in certain destinations the dream lives have turned into nightmares, dream homes have turned into money-pits and dream investments have turned into scams.
Spain's infamous land-grab problem is not the only risk. The turbo-charged Spanish construction industry is spiralling out of control as wave after wave of new-build developments hit the coastline. This could trigger a property crash leaving thousands of Brits high and dry as a glut of properties will mean more supply than demand. In contrast the French coastline is protected by more planning regulation than you can shake a stick at - which protects both the natural landscape and your investment.
But even in France never buy in areas that are purely fuelled by foreign investment as this source could dry up, there must be local demand as well. Buy in places where there is no potential for more development where demand will always out-strip supply - places like historic town centres. And if you do buy on a new-build development bargain hard and get a knock down price so you can sell cheaply and therefore quickly if you want to move on. Remember you make your money on property when you BUY not when you sell!
In non-EU countries euphemistically termed 'emerging markets' you do not have the same protection against scams and corruption. Get-rich-quick schemes are usually scams so don't enter into deals that sound too good to be true. If you do go ahead don't think bribery and backhanders will get things moving - get everything in writing and keep everything above board.
The French system protects both buyers and sellers, unlike in the UK their estate agency industry is regulated and all French estate agents belong to a professional body (usually FNAIM) which guarantees professional standards and provides insurance cover in the event of any mistakes.
Spain's infamous land-grab problem is not the only risk. The turbo-charged Spanish construction industry is spiralling out of control as wave after wave of new-build developments hit the coastline. This could trigger a property crash leaving thousands of Brits high and dry as a glut of properties will mean more supply than demand. In contrast the French coastline is protected by more planning regulation than you can shake a stick at - which protects both the natural landscape and your investment.
But even in France never buy in areas that are purely fuelled by foreign investment as this source could dry up, there must be local demand as well. Buy in places where there is no potential for more development where demand will always out-strip supply - places like historic town centres. And if you do buy on a new-build development bargain hard and get a knock down price so you can sell cheaply and therefore quickly if you want to move on. Remember you make your money on property when you BUY not when you sell!
In non-EU countries euphemistically termed 'emerging markets' you do not have the same protection against scams and corruption. Get-rich-quick schemes are usually scams so don't enter into deals that sound too good to be true. If you do go ahead don't think bribery and backhanders will get things moving - get everything in writing and keep everything above board.
The French system protects both buyers and sellers, unlike in the UK their estate agency industry is regulated and all French estate agents belong to a professional body (usually FNAIM) which guarantees professional standards and provides insurance cover in the event of any mistakes.
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