proving ability to pay monthly rental?

[DebP]

Hi

We're trying to rent a property on a long term rental through a French estate agent and have been asked for the usual pile of documents.  Most of which are ok but they've also asked for a work contract and 3 years worth of income documents.

We have our own business, so we can provide the extrait K - will this be sufficient to replace the work contract? -the estate agent appeard to be flumoxed by us not being employed by someone!!  

Then what do we do to show income?  We don't draw an income from the business and in addition, because it's a relatively young enterprise, we showed costs rather than profit for the first two years and will only show a small profit for last year (which is still in the hands of the accontant).  However, we do have quite a chunk of savings, so will have absolutely no problem with paying a monthly rental but it's the case of how do we prove it.

Any ideas?!!

Thanks

Deb

 

[mary]

Hi Deb

I have taken on a long term let and had to produce similar docuent.  I am a partner in my Husband's business and we are both self employed.  I gave them copies of our last three years sets of Self Assessemsnt (HMRC) and also our audeted acconts, which if fact were two years behind as our accountatct was auditing, the latest set.  They were happy with this, but I know, I thought of how thorough they were.  I think the agents have to be thorough, because firstly you have the property for 3 years and also I believe, if you can't keep up with the payments, it is very hard for them to evict you from the property if you do not, so they have to ensure that you can keep up the monthly payments.

I would have thought showing a bank statement with the amount of savings you have, should surfice.  I know that they are very particular in that mortgage and rent are no more that 30% of your joint income.  I hope this helps. 

Regards

Vida

[DebP]

Thanks Vida

Out of interest did your accounts show a profit? 

My concern is that ours didn't for the first two years and our accountant has only just started working on our 08 accounts which should show a profit (albeit a small one and certainly no way up to allowing for the 30% rule). 

Deb

[mary]

Hi deb, sorry for the delay in replying.  I 've been back to the Uk for the weekend.  Our accounts did show a proiffit as we have been trading for the last 7 years.  Even though, the girl did not seem to know what she was photocopying and was more interested in our self assemmement,  I still think, that by showing your savings, then this should suffice.  I know we felt in our case, where we have rented out house out in the UK, even if we did not get enough rent for the house to cover the motgage we were paying in the UK, we could still afford the rent here in france, but they are very careful and want to know how you will cover the rent, even if you are not working.  You need to get your situation accross to them, and get the account to issue a draft set of accounts if he can, as we had to do this, as they had not been fully signed off.  Perhaps take bank staments showing your savings for as many years as you can, to show that you are carfeul with your money.

Best of luck, Vida

[DebP]

Thanks Vida

I've since spoken with our bank and they've said this situation is becoming more and more common but that most immos should accept a bank guarantee of up to a year's worth of the rental value.  So I had a word with the immo and she confirmed that the owner will accept 4 months from us, providing all our other paperwork is in order.  So this is great news.  Now we just have to submit everything and hope we tick all the other boxes for them  - blood group, proof that we've been born, inside leg measurements ....that sort of thing!

Thanks for your help and advice

Deb

[DebP]

An update

Well it's been a painful process.  Our estate agent insisted on seeing the last 2 years of business accounts and forwarded them onto their insurance company to assess us. When we didn't pass the underwriters criteria (which we knew we wouldn't), the estate agent then asked if we had someone who could stand as guarantor for us by providing their own salary slips and basically going though everything that we had.  Being in our 40's I don't think our one surviving parent would be too happy in doing this and there was no way was I going to ask. 

I kept trying to get the caution bancaire option on the table but we had to go through all the other avenues first before anyone would consider it.  Even though the owner was more than happy to accept this, the estate agent really didn't want to go down this route. Because she'd not heard of this form of protection for the owner she was, I think a tad suspicious about it.

However, we have a fantastic bank (Credit Agrocole Languedoc), and our contact there phoned the estate agent on our behalf and I think one official person talking to another finally paid off.  So after 4 weeks of wrangling everything is now going through.  Can you imagine a UK bank doing this!!?

Our planned move date has slipped but luckily we gave ourselves a bit of extra time, so we're still ok for a few more weeks.

So we're now getting there and should be in by the end of April.

Ahhh.....looking forward to a lovely summer in our wonderful new home