Buying French property to let, investment or as a holiday home
Letting out your French property, especially during the summer months, can be a great way to generate income – but it is really important to ensure that you do everything in the correct way.
Renting out your second home in France is a popular option for overseas buyers – some of whom plan to move over at a later date, and others who have simply purchased their property as a holiday let. Whichever group you fall into, there are a number of legal areas that must be considered. If you plan to be letting out your property as a ‘shell’, there is no need to set yourself up as a registered business – although if you are letting the property out furnished, then it may be wise to register as a ‘professional landlord’, so that you can take advantage of available tax breaks (such as access to the French health system). However if you register as a business and you rent out your property, you must remember that you are liable for French income tax on your rental earnings – although the double taxation relief between the UK and France means you will not have to pay tax twice.
If you are renting your property out long-term, it is also worth remembering that tenants have strong security of tenure in France, so it is important to conduct a thorough and diligent check on whoever you decide to have renting your property. Also, as a landlord you will need to provide tenants with certain survey reports, just as if they were buying the property.
If you let your property out furnished, there are certain benefits to setting yourself up as a registered business.
It is usual to ask for a deposit at the start of the tenancy; the amount of this will depend on how you are letting the property – for a long-term tenancy this will generally be for one month, and for a short-term let it is normal to ask for a 10% deposit of the total rental value. For a long-term let in particular, it’s a good idea to get the agreement signed by a notaire, as this will underscore the terms of the tenancy agreement and also give you stronger rights if the rent is not paid.
Finding the right tenant
When you begin searching for a tenant, your process will very much depend on the type of property that you have available and its location. For example, we would recommend advertising a large flat in a city nationally, whereas a flat or house in a rural community, village or hamlet may only need advertising very locally. You could, of course, start the process in the UK – and advertise through an English property rental website, many of which cater for short term holiday lets. When you are over in France visiting your property, it can be a good idea to make full use of local shops, and even ask at the Mairie (Town Hall/Mayor’s office) if you can put up a little advert. There are also plenty of free newspapers around these days – in some regions you may even find an English language magazine! There will be differences between advertising in France and in the UK – but our team at the France Buying Guide are on hand to talk you through your options to ensure you can make the best of this. A good tip is to continue advertising your property, even after you have been booked up for a while. This will help you stay out in the public eye, and allow you to keep an eye on general demand for short term letting in your area.
You could also engage the services of a local estate agent and management company to advertise for you, and deal with the general letting and maintenance of the property – for a fee, which is normally negotiable. This will mean signing a “mandate”, an agreement between you and the agent, to market your property for rental. Don’t be persuaded to have your estate agent as a sole agent however; most French agents will not expect to be granted exclusivity! In general, a decent flat or house in a good area with amenities will be easy to rent out, particularly in the summer months. Facilities such as garden, extra land and/or a pool, and being close to either the coast or mountains will always ensure that you can command a decent rental. Don’t forget insurance! We recommend using an established UK insurer that specialises in cover for people who let overseas properties. Holiday lets can often be a very good way to generate income from your French property whilst leaving you time to enjoy it yourself when you have no tenants!