We invest wisely. France – the safety of investments

The country of wine and cheese has always attracted us: at least since the 18th century, when the Russian nobility switched to French. Today, the fashion for France has not passed, having found its reflection in the popularity of local real estate among Russians. Is it possible in France not only to buy, but also to earn, or at least not to lose – in this material.

National situation

France is a unique European country where real estate prices did not collapse to unprecedented levels during the crisis. From 2000 to 2008, the rise in housing prices in the Cote d’Azur averaged 10% per year. From the beginning of the 2008 crisis to 2010, there was a tendency to decline by 5-15%, depending on the type and location of real estate. After 2011, the market has stabilized. Now the cost per square meter varies greatly across the country, depending on the region. In the popular city of the Russians on the Cote d’Azur – Nice – “square” now costs about € 3.5 thousand on average. In Paris, the coveted square meter is almost three times more expensive – € 7-8 thousand. On average, “square” in France can be estimated at € 2,5 thousand

Among the advantages of France for investment in real estate, in addition to price stability and the absence of sharp recessions, realtors usually highlight the special cultural and historical proximity of this country to Russia. Our citizens feel comfortable in France and love to come here, so the flow of potential tenants and home buyers is assured.

Alexander Matsulevich, representative of Service Azur : “Firstly, the main changes in tax legislation hit the French citizens, which led to an increase in offers on the real estate market, and, accordingly, it became easier to bargain and get more interesting prices.

Secondly, interest rates on loans in France are lower than ever. The floating rate is on average 2-2.5%, the fixed rate is about 3-3.5%, and since these rates are the same for everyone (both for residents and non-residents), today it is interesting to take a floating rate loan, followed by the possibility of moving to a fixed one. This option is primarily interesting to investors who purchase properties worth more than € 1,300,000, because thanks to the loan, you can reduce or avoid the wealth tax (ISF).

Thirdly, due to the availability of information, it became clear how to properly execute property and optimize taxation. Moreover, today, in many agencies, banks, notary offices, Russian-speaking managers are working, which makes it easier to work together. ”

Nina Metreveli, a representative of Nice Properties : “Speaking about the advantages of France, two main criteria should be noted. First, today France is the most stable country in Europe. During the economic crisis, there was no collapse in real estate prices, as in many other countries. On the contrary, in many regions, prices continued to grow, albeit slowly. Secondly, the French mentality and culture are closest to the Russians. ”

Elena Belluti, a representative of CGF International : “From an investment point of view, France is notable for the stability of real estate, prices have never sharply dropped here, as, for example, in Spain. And in some regions, like on the Cote d’Azur or in Paris, they grew even in times of crisis. This is a guarantee of investment, gives the prospects to resell an apartment with a profit. France is also a country in which property and property owners are protected by law, transactions are conducted through notaries who are guarantors of the purity of the transaction. ”

Entry threshold

The minimum cost of housing in France varies depending on the region. So, in Nice a good apartment can be bought at a price of € 3,500 per sq.m., in Cannes – from € 6,000 per sq. M. m, in Saint-Tropez from € 8,000 for the “square”. Such an apartment can be successfully resold or rented.

Alexander Matsulevich : “If you have a lack of confidence in the correctness of the prices of the property being acquired, you can always contact the agents or professional experts who will provide you with an analysis of similar sales.”

Nina Metreveli : “The main advice is to work with experienced local agencies, since they know the market well. They will be able to advise you on all issues arising before, during and after the transaction and are interested in long-term cooperation. Simply put – turn to professionals. “

Elena Belluti : “As for the minimum cost of housing, the one-room apartment of 20 square meters. m will cost about € 180 thousand in Paris, and in Nice – about € 100 thousand

A novice investor should carefully study the real estate market, select neighborhoods that have the potential for price increases. To do this, I advise you to contact your local realtor, who will explain in detail the difference in quarters, give an approximate alignment of prices for the desired property. This will help most effectively and quickly create a personal opinion about the region and possible purchase. You can discuss your favorite options by phone before arrival.

In the neighborhoods where there is a great demand for apartments, namely, they should be interested in, there are no miracles. There is an average price per square meter, which must be adhered to. If this quarter you found a profitable option, in which the price is much lower, most likely you will be disappointed in the new apartment upon arrival by opening something that was not written in the announcement. Of course, at the market price there are more interesting apartments, but they are sold quickly, sometimes in a few days. Therefore, we must be especially active, keep in touch with a local real estate agent who will warn you about a new option appearing on the market. ”

Sales prospects

People who five years ago invested in real estate in Paris or the Cote d’Azur, not only lost nothing, but also earned. And all because housing in these regions is constantly growing in price. Investments in real estate in other regions did not bring such good results, but it is also impossible to say that they did not pay off.

Acquisition of housing for the purpose of subsequent sale with a long-term perspective in France is more profitable than the purchase of housing for a short-term period. The fact is that for the first five years the homeowner is forced to pay value-added tax (the amount of the sale of real estate minus the amount of its purchase, the possibility of deducting construction costs or renovations) – 32.5% Only starting with the sixth year of ownership of real estate in France, a system for reducing the amount of tax is provided. After 30 years of owning a property, there is no value-added tax.

Alexander Matsulevich : “The first condition for real estate liquidity is its location. Property in the centers and resort, coastal areas does not become cheaper. The annual increase in real estate prices of approximately 3-3.5% or more, such as, for example, in 2013, in Cannes, a rise in prices of 7% was recorded.

In addition to location, the area of ​​housing plays an important role. So, the most liquid objects are studios, apartments, somewhere up to € 800,000. Their cost is lower and it is easier to get a loan for them (this is beneficial for non-residents), therefore these objects fly away like “hot cakes”. In addition, it is an ideal option for renting out, especially for the period of festivals and other events. ”

Nina Metreveli : “Due to the stability of the market and the constant rise in prices, the most interesting from the point of view of investment in real estate are the Cote d’Azur and Paris. Those of the Russians, who five years ago bought houses or apartments on the Cote d’Azur, can today, not only freely spend their holidays by the sea and enjoy the wonderful climate, but also profitable to resell their property or rent it out.

The potential profit depends on the type of property and purchase objectives. If you are planning a quick resale, the purchase of real estate for repairs and its independent restoration will be beneficial. Unfortunately, the Russians prefer to buy ready-made, renovated real estate with a slight increase in prices. This property is better to resell in a few years. ”

Elena Belluti : “In France, the norm is to keep an apartment in the property for about five years, during which time the rise in the price of real estate allows you to cover the initial costs of notarization and commission of real estate agencies. After this period, it is usually possible to sell the apartment with a profit for the owner. Cote d’Azur and Paris are a real estate market that is being promoted by foreigners – they love France and believe that the price per square meter is low compared to the UK or Russia.

The most liquid are apartments or villas that are of interest to the foreign clientele. This is usually the whole property, which is located in the center of the leading cities, prestigious neighborhoods. On the Cote d’Azur, these are objects close to the sea, in beautiful residences or corresponding to a certain style, for example, bourgeois – high ceilings, stucco molding, large areas, parquet … This can be either a property with a freshly made repair or in poor condition. Some investors are looking for exactly the latest type of real estate in order to earn money on the resale of the object they have already repaired. ”

Rental prospects

The yield from the rental of French real estate is 5-6% per annum, but in some cases even 10% per annum. However, according to realtors, most investors prefer the resale of their property to lease.

In France, several types of renting should be distinguished: short-term, seasonal rentals or long-term rentals (more than 12 months). The Cote d’Azur is full of various events and activities, so the profit from seasonal rentals is quite attractive.

There are management companies in the country who can be trusted with a tenant search. As a rule, they take from the lessor 20% of the income received, if we are talking about seasonal rent, and the monthly cost in the case of permanent rent.

Alexander Matsulevich : “When searching for rental housing, you need to pay attention to the condition of the object, its location (preferably the first lines), the view of the sea, surroundings and additional comfort (garage, parking, pool, garden …). Long term rent is stable and convenient, but mainly apartments are in demand. Do not forget about the existence of various kinds of government programs for the purchase of real estate for the purpose of subsequent lease. In these cases, you can get good tax rebates.

The Russians also rent out their French villas and apartments, but to a greater extent they acquire real estate as a country summer residence, a place for solitude and rest. ”

Nina Metreveli : “The profitability of the rental depends on its type: long-term rent on the Cote d’Azur usually covers utility costs and taxes, while seasonal rent allows you to get a net profit of about 5-6% per annum.

The greatest income from renting bring objects for seasonal rent on the Cote d’Azur. When searching for rental housing, it is necessary to pay attention, first of all, to the location of the object, then to the amount of utility costs and taxes. ”

Elena Belluti : “The main goal of investments in France is to invest in capital, secure the money invested and make a profit on resale. Renting is a minor request, although about 40% of Russians are looking for tenants in the end. You can rent housing in France seasonally or permanently. On the Cote d’Azur or in Paris, for example, seasonal rentals are an interesting business that foreign investors are very fond of. ”

Conclusion

France is a country with a steadily developing economy and a steady rise in real estate prices. All these factors allow you to successfully invest your funds, save them and multiply in the near and in the distant future.

Despite the fact that resale of real estate is the most popular type of investment in France, we advise you not to lose sight of the opportunity to earn money on renting out your property. Moreover, housing on the Cote d’Azur allows you to make good money on seasonal rental, and real estate in other regions – on the long-term.

Especially we recommend to pay attention to the possibility of buying property in France in poor condition for the purpose of further repair and resale.


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