When Did You Take The Leap?

[b4rkie]

Hi All,

I have always dreamed of a bolthole in France and have done quite a bit of research already in my spare time, but bought nothing as yet.

By nature I'm quite cautious with cash, mainly because I have a young family and I dont want anything to jepordize our home in the UK.

The plan is to beat down my current mortgage a bit so that my UK home is safe before investing in my bolthole.  I've no idea what kind of rental

income I can expect from the second place once I have it, so I want to make sure I can afford the new mortgage payments myself - i.e. little or no dependancy on rental to pay off the second mortgage.

A friend has recently taken on a second place in Florida and borrowed to the hilt but also borrowed 2 years worth of mortgage repayments.  He said that this was to ensure he had 2 years to get rentals in place.  Sounds like a great idea, but we'd all be doing it if it were that great a theory, wouldn't we?

I guess the question is : "at what point did you finally decide you were financially secure enough to take the plunge or was it a big risk?" 

Im not after any figures, of course that's personal, but I'd appreciate some views.  My wife and I are in our mid-thirties in case you were wondering.

 

Thanks!

Tony.

[Tresco]

Barkie (can I call you that - it's easier?)

Can I ask, by 'Bolthole', do you mean somewhere you can spend holdidays with your family?

A Holiday Home that would (hopefully) be rented out at other times, with you still living in UK?

[Tresco]

Sorry, I now see you are called Tony. Our Edit function has failed this evening!

[b4rkie]

Hi!

Tony or Barkie works for me - Ive been called other things but you dont wanna know about that Im sure!  ;-)

Yeah, that's right.   What we want is a holiday home to spend time in several weeks a year and rent out to other holidaymakers the rest while still living in the UK.

My friend's gamble (see first post) seems to have paid off, and if I want until I can afford to run a second home I'll be 70! I was just after others opinions as to when they felt they had enough "bottle" to take the plunge.

 

Cheers!

 

[Tresco]

I'm cautious, like you, so I think your plan of beating down your current mortgage is a very good one.

We used to have a holiday home (at the same age as you) but it was paid for outright. However we spent years pumping money into that house, to the detriment of our home and lifestyle in England.

It was a lovely house, but there was no question of getting it up to the high standards necessary to rent it out, so it was used by us, family and friends - lots of wear and tear and no extra money coming in to set against it.

If you look in the 'gites' section and go through some of the old threads there are discussions about how much income you can expect (along with costs) but my impression is that standards for gites are very high now.

If you and your family want to use it, you will naturally want to do so in school holidays, which means even less 'income'.

Leaving aside the issue of renting out, I am probably one of the only people here who ended up hating having a second home. Other people have very positive experiences so I think I'll button it...for a while.[:D]

 

 

 

 

 

 

[Nearly Retired (I am now)]

For us, owning a second home in France is something of a challenge which at the moment we enjoy. There's always something to worry about if you are the worrying kind - have the pipes frozen, will the boiler light, how tall will the weeds be, has it been burgled, did it lose its roof in that storm last night (yes, daily internet peeks at the local weather) ? ? etc. etc.

It needs constant work when we're there - paint the shutters, cut the grass, fix that socket and so on. So far it's good fun, and we spend a lot of our time in England planning / shopping for our next trip

Often it can be a problem being there at the the right time to get any third party to do their thing - maintain the gas tank,  quote for this or that.

I actually seem to like this sort of thing and can cope quite well. Some might find it hell.

We've not gone down the renting route because as said before, I too don't think we'll ever get it up to standard and if we do I don't want some scum wrecking it! Renting would need a reliable person on site / close to site to deal with the day to day problems and changeovers. All for what? Maybe 10 weeks @ £500 less costs. Say £4000 per year less tax. We then wouldn't be able to go at the drop of the proverbial hat and would have to sit at home in UK. No. For us renting it out is just not an option.

When to take the plunge? We only did it when we had paid off the UK mortgage and could buy in France by cash. It's a big enough hassle on its own without having to worry if you can pay for it. 

 

 

[YCCMB]

Like Tresco and NR, we have a place which we bought outright and due to our advanced age we're mortgage free in the UK. We do rent our place out, and although it's on one of the main websites, we don't do any other aggressive marketing to get bookings. We could rent it out dozens of times over for the 6 weeks of the UK school summer holidays, but that's about it, and as a consequence we probably only get 6-8 weeks' rental a year, which is, of course, taxable. We don't want to do more, because like NR we don't want to find ourselves in a position of not being able to use the place ourselves if and when we want to. In our position, I would say that the rental income probably just about covers our main overheads, but that's not really taking account of the general wear and tear (even considering the short period for which we do rent) of things which get broken, damaged, or just generally "used" and hence need replacing.

We hope eventually to spend increasing amounts of time in France, and so our investment was always going to be a long-term commitment, and we were extremely fortunate to be able to find a property in excellent condition, but nevertheless, as NR says, there's always something to be done. We don't mind that our holidays aren't really "holidays" in the accepted sense, but you need to allow for the cost (either in your own time, or someone else's) of general maintenance, even if the property is in good shape, not forgetting that if you do intend to rent, this maintenance not only increases, but is something expected by any tenants......

I think that being able to afford a second home financially is really just a tiny part of the picture. If it's an investment, it's an expensive one, with little if any guarantee of return (certainly in the really saturated French market). If it's a place you want to use, and enjoy spending time in, even just for holidays, can you also afford the cost (or are you prepared to sacrifice the time, during your holiday) to repair, maintain and generally look after the place (all of which you'll still need to factor in if it's only for investment purposes)?

I should have said, too, that I wish we'd been able to buy when we were in our 30's and with young kids, although there's a big downside to that if you have to keep them amused while you do DIY. Our kids were in the advanced stages of adolescence when we bought our place, and really disliked the idea of spending every holiday in the same place, and being cut off in the countryside.....It depends on your personal circumstances and how you enjoy spending time as a family, but it does seem than many people find that their idea of an idyllic family holiday home in the deep countryside is their kids' idea of purgatory by the time they're in their mid-teens. Luckily, we are now at the stage where our kids are old enough not to have to come with us, and that brings its own advantages, as we can please ourselves!!

[Coco]

I agree with everything that has already been said.  To be quite honest it always amazes me when people are prepared to take out a second mortgage for a holiday home - if that's all it's ever intended to be; too much of a worry for my liking.  We bought our house in 1999 and paid for it outright by trading to a cheaper area in the UK - it wasn't far, only 20 miles, but it halved the cost of our house, buying like for like.  We only did this because we wanted to buy a house in France that we would eventually live in permanently, otherwise I wouldn't have compromised our UK investment. 

We had to fit in with other people at work regarding holidays so had our own trips to France planned out for the whole year, which meant we were able to maximise rental weeks.  But as others have said, we could have rented school summer holidays, easter and christmas 10x over, but we wanted to be here at easter and christmas.  We used to net about £2000 a year after we had paid taxe d'habitation and fonciere, a gardener, someone to do the turnrounds, etc etc.  This just about covered our own ferry fares and allowed us to make small, minor improvements.  The gite market seems to have changed so much in just the last 5-7 years.  When we were renting out in 2000 we charged the top rate around here and used to get very nice comments in our visitors book but when I hear what people offer now I don't think we would stand a chance at the level our place was at.  We ensured there was comfortable furniture and nice bedding, a BBQ and good quality garden furniture but we didn't supply dishwasher, microwave, TV, DVD, CD, all of which seem to be regarded as the basic essential now.  So kitting your place out is going to cost an arm and a leg to start with.

As for kids being happy going back to the same place time and again.  That is something to seriously consider.  Since running our B&B we have had people saying they will DEFINITELY be back next year because the kids have loved the place so much, but we've learnt over the past 4 years that this very much depends on the ages of the kids.  If they're under 11 we can pretty much guarantee that we will see them again - but over that age we so often get an email from the parents saying that they will try an get away for a weekend alone but that they won't be coming back after all because the kids want to go somewhere different this year.  We even experienced the same with our own niece, who at 14 begged us to let her come back for the whole of our summer fortnight the following year - of course, when I mentioned it to her the following May, only 8 months later, I could see the look of horror on her face at the thought of two BORING weeks in the back of beyond!

My advice would be, keep the dream alive, keep looking, and if a real bargain comes up then take the chance but don't push yourself to any financial limits and don't rush into it.  We know of several Brits around us who have bought holiday homes and absolutely love them but find that for various reasons, kids, finance, work commitments etc, they are just not getting the use out of their properties and are selling up.

[hastobe]

We have done the same as other - we took out a mortgage to buy our French home but only after we were mortgage free in the UK.  We still need to do quite a bit of work (decoratively) to the house before we would let it out - but even then it would only be to friends, family, work colleagues etc - people we know and would trust.  We want to retire there (for at least half the year) in a few years time so we are buying the things we like and would hate them to be trashed.

With regard to the problem of being obliged to visit the same place every year (particularly from the persective of our teenage children) we have started to 'home swap' which seems to be working well for us.  Although we still spend several weeks of the year in France with the children (and have several short visits sans kids) we also get to visit other places.  We are off to Iceland in July for two weeks and have swap offers from (amongst others) families in Sydney, New England, Tuscany, California...which should keep us busy for the next couple of years.

Kathie

[Llantony]

We dreamed for years of buying in France (when it was cheap) and only managed it when we realised we had reasonable equity in our UK home and could then borrow more  (and the kids were more or less independent).  Before we retire we'll have to sell the UK house to pay off the mortgage (or sell the French house to keep the UK one, but OH won't have that!).  May try to buy something cheaper in UK in case we need to come back. Can't assume the French house will increase in value - or be easy to sell.

If you can't get a place up to scratch for commercial renting you could rent to family and friends. A friend of mine does that.  Ours isn't yet good enough to charge people for as we havenn't time to do the work, but we are hoping to retire there in the next 2 years anyway.

[Llwyncelyn]

In our case we originally purchased in 2001 and very much as a holiday home.  Again it needed nothing doing to it but we added bathrooms en suite throughout and generally improved the level of comfort.  In those days in the height of the season we too were getting £550 per week had great comments and one or two downsides with breakages.  As other contributors have said it covered overheads made a contribution and basically paid for three trips a year of a month or so. However there is now oversupply in the market and economics (those of us who can remember) comes into play...........it is a commodity and every commodity has its price.

We were able to purchase outright and without touching our then minimal UK mortgage.  We were then faced with French upkeep on a house in the country as well as our Georgian home in the UK.  We decided both to take early retirement and could not resist an offer  from a retiring Army officer for our lovely UK home and which had and will always be my dream of the last thirty years.

Then as a bolthole we bought a house in the UK which we have only been inside for a visit of about twenty minutes and this too is without a mortgage and has been rented since purchase.  Pay tax on that.

However we bought in France as a second home after two years of living here in the country we have finally woken up to the idea it is not for us and the house goes on sale in March and we have two visits househunting wise to the Tarn y Garonne and the Languedoc already booked.

I am not normally known for ultra safe approach but because of my wife's illness children and grandchildren in the UK our ages and just in case we fall out of love with France we have that bolthole in the UK.  Don't think we will every go back....................but never say never.

Final problem one of our grandchildren was conceived in France their parents our son and daughter-in-law are aghast at us selling................thought it would be a lovely place to bring the children for the next few years on holidays!

 

[powerdesal]

Bought in 2004 as a holiday home initially but as a place to retire to eventually. Liveable in but requires plenty of work to make it just how we want it. We do not have property in UK and wanted a place for my wife to spend the summer away from the heat in the UAE. The work keeps me off the streets during my annual leave [:)]. Plus we both enjoy the challenge and the garden is my wifes dream away from a sun browned heat trap where its too hot to be outside.

[Jollity Farm]

Bought our place last May after much consideration and soul-searching, none of the children want to move to France but at 23, 22 and 18 nearly old enought o do their own thing anyway!! Taking things very slowly, OH now employed in the French haulage industry and travels to and fro each week tho not to the house unfortunately. Had to extend our mortgage here but will be able to pay it off completely when we sell our house here. It is a worry about weather etc but we have fantastic French neighbours, all in the hamlet have made us most welcome and lots of advice on local artisans etc as we have a fair bit of work to do- someone always knows "a man who can..." WE are hoping to ultimately pack up and go either September this year or March 2008. I am studying hard at college to improve the language and the neighbours love to help as long as you make the effort to try! Take your time, do your homework, don't be pushed into anything and follow your dreams... we are here but once, enjoy!

[Val_2]

Only you will know when its right to take the "leap". A lot depends on your needs and personal circumstances. Make no mistake, living in France these days is very costly and you will need to have an income as savings disappear faster here due to many unexpected things that can and do crop up and credit and loans are not easy to obtain unless you have a proven track record first with the bank. If you have a transferable trade/business like we did, then its not so hard to leave what you know and start again although the bureaucracy is a nightmare and the social charges leave you poorer than you were in the UK but the quality of life makes up for that. We also had no mortgages or loans and bought our house outright so that was one headache out of the way here but every week you see many properties in the local press that have been seized by the banks up for auction so it proves that there are financial problems here too. I've seen so many brits come here and think they can otain benefits and financial aid when they have wasted their savings and sadly they have to return and start again.This was brought home when watching A Place in the Sun Home and Away last saturday afternoon where a couple couldn't make it here after sinking their savings into gîtes etc and ended up going back with a very meagre £110K to try and start again, I really felt very sorry for them but they did not do their homework in the first instance and did not understand the systems here which obviously bled them dry. If you can, keep a UK residence to let as a backup and then you won't have lost too much.

[Llwyncelyn]

Val today the good old Bank of England put up interest rates as well and that in itself will bring pressure so I am not sure if in France we continue to see a drop in the number of our countrymen and women who wish to come to France for to borrow money in the UK is going to become harder. Thus the property market will be reined in and sales will perhaps slow and people will be reluctant to increase their mortgages to help in the purchase in France.  Pure economics.  However hugely competitive market there in the UK and I am not sure but I think you can borrow up to five times joint salary in the UK.  It is of course the fact that insolvency in the UK no longer has the stigma that it once had and if things go wrong then it only takes some twelve months before that stigma is no longer in being.  However damage has been done by that stage.

My first mortage was £3150 and that was tough but managed to pay £315 deposit!

We decided to keep our place in the UK and maybe we will be ok for  do not have any mortgages on either property and we have 'blue chip' pensions.  However for how much longer but I do not think per se that Siemens is going out of business!

We bought an investment property in the UK on  the basis that France might not work out.  Normandie did not work out and we are moving south but if we do not sell here in Normandie we are not going to do stupid things back home financially to make it happen.  If then after a period of time the south does not work then we will sell and go back having tried.  However what do we then do for the changes within the UK within the next five years will be somewhat suprising.  Watch this space.

 

[hastobe]

[quote user="Llwyncelyn"]

Val today the good old Bank of England put up interest rates as well and that in itself will bring pressure so I am not sure if in France we continue to see a drop in the number of our countrymen and women who wish to come to France for to borrow money in the UK is going to become harder.

[/quote]

We borrowed in France - at 3.8% fixed for 15 years....our work colleagues (with UK SVR mortgages - at nearly double this figure) hate us!  They're now muttering about moving to France LOL

Kathie

[Llwyncelyn]

3.8% fixed for 180 months. What a deal.............you cannot go wrong for sure as eggs are eggs (remember that company was it bought by the French) there is very little to go wrong at that rate.

 

Well done

[powerdesal]

Off topic - sorry.

Llwyncelyn, e mails to you keep bouncing.

Regards

[Llwyncelyn]

Steve sent you a pm rdgs  

[DZ]

Reading all the answers to the original post I realize we are mad as hatters - two mortgages (one in the UK, one in France) plus 2 teenagers and one pre-teen to think about (teenagers absolutely refusing to even contemplate moving to France or even having another holiday there).  Still, the project keeps us very happy, busy and, generally, on our toes - or call it a mid-life crisis??? 

If I could turn back time, I would still do the same.

[BIG MAC]

Purchased our fixer upper in September 2005 put a small extension on our UK mortgage but it only has 9 years to run and is affordable so long as I keep earning!

We are on a budget and are very much in the business of keeping the place wind and weather tight gradually improving things as we go along.

Hopefully we will be able to retire in about 15 years and let the UK house out and maybe get a job in France or open a small business (If I could only get a hang of the language hopefully ten years will do it lol)

Only 43 now so theres hope and scope.

Our two eldest girls are with child so we hope to be able to see little sun kissed kids charging about the place and maybe drinking in a slightly better way of life than that in the UK.

[Just Katie]

Sorry, I have removed this as my son was playing about.  Sorry[:$]

[Miki]

The new pills take a time to kick in Katie, I should know..

The man once known as Ivor the Engine [:)]