Turning a family holiday home into a gite - is it worth it?

[chocolatefish]

Hello all

I am posting for some advice. My parents own a holiday house in the Languedoc, which they bought about 11 years ago. Looking to the future, they are starting to think about what to do with it when they no longer wish / able to use it.

My husband and I live in France, though a good 5 hours drive away, and we don't have the spare cash to cover the running costs through the year. My sister is unlikely to want to take it on. Other than selling up, we are considering the possibility of converting it to a gite, handing it over to an agency to manage and just booking a couple of weeks holiday each year, out of season.

The house is 3 bedroom bungalow, typical new-ish build in a lotissment, in a small village. It's a very residential cul de sac, all the neighbours bar one are permanent residents, and it's outside the main part of the village. The house is in good nick, but would need a fair amount of investment to make it 'naice'. The kitchen is old and and a bit tatty, the furniture is mismatched (partly inherited from previous owner, partly hand me downs from home in the UK and partly IKEA!), the decor is plain and old fashioned, the duvets / pillows / towels / etc are similarly mismatched and hand me downs. It's full of books, videos, clothes, general stuff that my folks have brought out over the years.

The garden is well maintained, and gives good privacy, there is a pool that works well and is a reasonable size. But that has been in place for about 7 years, and will no doubt have maintenace costs attached in the future.

The village is really small, and rural, and although renovations and tidying up of the 'historic' centre moves on each year, it's not one of the 'pretty' villages popular with Brits abroad. It is a good central location for visiting the Minervois, the coast round Narbonne, the Montagne Noir to the north. But the village itself has only a boulangerie, a boucherie / supermarket, a wine coop, and two very idiosyncratic restaurants (only open when the owners feel like it!)

Whaddya think? What kind of standard do gites have to meet to be attractive to guests? Living France photo shoot level? Would the location - residential, modern-ish house, not in a 'pretty' village - be a major problem?

Anyone else done this? We would be looking for it to cover its costs, maintain its value and give us a couple of holidays a year, it does't have to be a big money spinner. But I suspect that the investment required to bring it up to scratch would outrweigh the potential benefits.

Cheers for any advice.

[Cendrillon]

You will find lots of information on www.laymyhat.com/forum

[Gardian]

Chocolatefish .................

A very interesting and if I may say so, realistic appraisal of the circumstances.

Others will be able to offer input from the 'gite owner' side of things - my offering is as a sort-of consumer, in that we had to view many of the local properties around here when looking for accommodation for guests at the time of our son's wedding some years ago.

There's no doubt that you could sell a dog kennel as accommodation in the mid-July to mid-August period, but outside of that, quality counts. One third of the properties we viewed were excellent, one third OK-ish and one third tatty. To offset your improvement costs, you'd really want to be in the first category and that doesn't sound as though it would be cheap. Not necessarily prohibitive though. 

The thing that strikes me is that ongoing maintenance would be the biggest difficulty. One of our neighbours, for whom the house is a residence secondaire, are relatively lucky. Our other neighbours look after post-Winter deep-cleaning for them and generally get the place ready when anybody is coming down. However, pool maintenance has to be down by a firm of piscinistes and it certainly isn't cheap - €60 / wk is talked about.  If you don't have a contract, then you won't get anybody to come and fix a problem promptly. That's just two things and there are undoubtedly more.  Obviously, on-site owners (by and large) take care of these things themselves.  Using an agent to manage everything would presumably eliminate those concerns, but again the cost must be significant.

Do you have a choice though?  Let's say that the property, if 'sorted-out' is worth €250k, then its presumably readily saleable or lettable.  But you might have to spend  €30k to get it to that state.  If you do nothing though, its (as you imply) neither lettable nor easily saleable and even then at a significant discount to the €250k - it could easily be double what you'd spend bringing it up to scratch.  

The gamble is whether you could recoup in (say) five years what you'd spend on improvements (whatever that figure is) from nett letting proceeds. I suppose that you'd need a realistic appraisal of the costs of improvement, property sale value improved and unimproved and the possible nett revenue stream on an improved basis. Then add 50% to the 1st bit, take 80% of the next numbers and 60% of the last one. 

Others would doubtless quarrel with my percentages, but you get my drift. Hope that helps in some way. 

[dave21478]

Realistically, I dont think you are going to make money.

As soon as you have to pay someone to do everything from welcoming guests to cleaning etc, you are loosing a fair chunk of the income.

If you have to spend out just now to upgrade the decor and fittings, then it will probably take several years to recoup that cost.....just in time for it to have to be spent again to keep up with wear and tear.

To say nothing of the usual property ownership problem of potentially having to cough up several thousand for unexpected repairs every now and then.

This assumes that it finds any renters at all.

A modern-ish house on an estate near to a non-picturesque town doesnt really paint an attractive picture to holidaymakers. Now, its possible to promote it really well if you have the ability to talk it and the area up and it will help enormously if there are tourist things to do in the area too. Whats it like out of season though? it sounds like the sort of town that pretty much dies off over winter?

[NormanH]

You probably don't want to do this at all, but everything you say about it screams 'empty it, give it a lick of white paint and sort electics and plumbing if you have to and let it full time to a French family through an agent'

Worth a minimum of 650 €a month I reckon

[Lehaut]

Tend to agree with Norman for the quick fix option. Gut the house, clean it up and let it, through an established agent in the area. Maintenance at a distance is not easy be it Gîte or a let. If you start out with the expectation of breaking even, anything else is a bonus!

[chocolatefish]

Thanks all, that's really useful. I agree we are on a hiding to nothing with the gite idea. We hadn't really thought of just renting it out as a house. The swimming pool occupies a lot of the useable garden space, not much space left to kick a ball around, but it might appeal none the less. We are long term renters here, so we have an understanding of what it is likely to involve - lots of white paint for a start, as you say!

Cheers