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Becoming Gite Owners!!


John
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Hi.

 

We are looking at moving to France to buy and run a gite complex.  We are not naive haing lived in France for 3 years before children and speak pretty good french.  On this and various other forums there are conflicting views about the state of the market but we think(!) that with the right property and marketing it should be possible to have a top line income of around 50KEuros from a 4 gite complex. 

We have done our research and from our perspective it stands up IF we find the right property - obviously the key and we are now actively searching.  Reason for the post is to try and get feedback from currnt owners as to what the market is like? Are booking levels good?

We are not looking at this through rose tinted glasses but as a lifestyle change but also as a good business move.

 

Any comments most  welcome

 

 

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Welcome

IMHO If your gites are really first class you will get full bookings for the school holidays months. You need to think carefully about how you might get lets for the shoulder months - could you go for pre-school tots, or golfing breaks etc.

If you want lets throughout the year, that market is more for couples, so many bedroomed places will not be attractive.

When choosing your property it is better to be AT somewhere rather than NEAR.

Think about what it will be like living in your property in winter.

Bon chance!
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The general consensus seems to be that unless your Gites are very high end in an expensive area such as Provence or the Riviera where you can charge a hefty premium in season, it is not possible to make a living, especially if you have a family to suport and any borrowing. Most Brit Gites owners seem to be early retirees or retirees who are looking to supplement their retirement income and savings. What apparently kills the economics are the short season and high French social security contributions.

Other factors to take into consideration is that in many areas the market is over saturated with Gites and the current dire economic situation in France. Also if considering targeting Brit holiday makers the current renewed weakness of the £ is not going to help.

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To be clear upfront, I don't have any gites nor do I have any experience of running any.

However ................ just a few thoughts on the maths.

From what I've understood from people who do run gites (not on here, face-to-face friends), they reckon that on 12 weeks occupancy p.a., you're doing well. Others on here may well say that's rubbish and that you can expect to do much better than that. Well OK, but they may well be businesses that have had to endure several years of poor returns and gradual accumulation of regular clientele. Stay with me for a moment.

That says that to achieve £50k p.a., you're going to have to get (roughly) £1k / wk / gite over the season - say €1150.

You only need your 'yield' to drop (or rather what you can get) to (say) €800 / gite / wk average and your occupancy to be 10 wks and the gross income drops to €32k, or £28k-ish.  Big difference. 

I know that I'm sounding negative, but I'm urging caution and realism over possible gross income.

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I would say it is all about lifestyle...

If you want (are willing to pay for) a lifestyle change that will allow you a minimum wage for a considerable amount of work then yes.

You need to consider the initial downpayment, restriction on lifestyle, returns versus work effort.

What is the yeild if you were to keep that money in the bank, what are the returns after the mortgage repayments, can you make back the 8% (or so) purchase costs for a property, selling costs and wait, have you calculated the real running costs (heating, phone, internet, insurance, electricity, advertising, marketing).

If you are reliant on the income then I would probably not do it... as there is too much risk, but, if you 'need' a lifestyle change then I would do it immediately.

I am glad for the decision that I made but I never had any clue about what was in store.

One last point is that you need to be mentally and physically fit as it is not easy and you probably wont be paying for a worker.

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Having lived in France for 20 yrs and running gites for 15 yrs your estimate of 50K is well over the top unless you can afford to buy outright a very high value complex in an "expensive to rent area", such as Provence/Cote d'Azur.

For the more inexpensive regions you would really be pushing it. We are in the south west and over the years our rentals have been around the 12/14 weeks as we rent to families. In order to get more weeks then you will be probably be looking at adults only rentals ( no not porn !) as there is a market for out of season visitors here who are not limited to the usual school holidays. In Brittany if you have small gites you could attract Parisiens and Germans, Dutch as well as Brits but then the rates are much less.

On whatever income you get you will pay social charges and Taxes (many and various) so expect to live frugally, oh and do all the work yourselves as you wont be able to employ anyone; and set aside a large amount of money for heating through the winter.

On the plus side its a buyers market so property will be cheap, but there is a reason for that - see above !

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Okay.. if you mention gestimate figures on a forum you are going to get torn apart...

But.. anyway here goes...

As a very very rough estimate I would imagine that you could get about 5% of your property price back on profit each year...

For 50k you would need a property price of 1M

That means if 2 persons work hard then each year their net income could be 25k each if they had an initial investment of 1M.

So I guess that I am saying, if you have a 1M property in mind and are prepared to work then go for it...

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HAving read this thread and others on the same subject I am a little confused why anyone rents out gites. It seems to be a lot of hard work mainly for the benefit of the French government and the tenants. So why do people who are not masochists do this?

 

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[quote user="Rabbie"]

HAving read this thread and others on the same subject I am a little confused why anyone rents out gites. It seems to be a lot of hard work mainly for the benefit of the French government and the tenants. So why do people who are not masochists do this?

 

[/quote]

As I said yesterday who'd be an entrepraneur in France [:P] HAving read your post [;-)]

Although with a percentage of allowances against tax etc and materials cost not being too high there is a small margin left to live on if you get it right but as you get older will you be able to carry on the slog of change overs or will you need to employ people to help which will all but use up that margin?

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It is interesting how the posting activity on the Gites section of this and the other Forum I visit, has tailed off so much over the last year or so.

Possibly a sign of many Brit Gites owners selling up maybe.

Certainly very few new posts from those considering buying a Gite.
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When first considering moving to France I had thought a gite would be a useful way of supplementing income but the consistent message from this forum has opened my eyes to hard work and low returns. Mny thanks to all who have allowed realism to enter. I am grateful for this information even if it is not entirely what I wanted to hear.
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Like so many other options open to people moving to France, running a Gite seemed to come pretty high up the list 10-15 years ago for people who wanted to make a small income (or even a larger one).

In the boom period, this seemed to make perfect sense, because, in addition to Mr and Mrs Holidaymaker and all the little Holidaymakers, there was a ready off-season market comprising Mr and Mrs Secondhomesearcher and family.

The newly arrived Gite owners could expect to make a small year round income and the more enterprising even managed to add on a few knobs and whistles by actually offering homesearch holidays, throwing in a bit of driving around, or linking up with the odd immo to become the accommodation of choice for the punters.

Mr and Mrs Secondhomesearcher have, in many cases, sold up now, as, once they finished their renovation they realised that it had cost them la peau des fesses and that they didn't really think that spending every holiday in the checkout at Mr Bricolage was their idea of a good time. They also realised that they should have done more research into the winter climate in their chosen location...

There's only a tiny trickle of new Mr and Mrs Secondhomesearchers. They are mostly the ones who have been watching 10-year-old repeats of " A Place in the Sun", who seriously believe everything they've seen on the programme to be gospel (and current). Others had friends who moved to France and who have returned to the UK, and have got cold feet about their plans. Some may even have been put off by reading forums like this one. Others just don't have the spare cash anymore. The few hardy searchers are generally determined to leave the UK at all costs, for reasons I won't dwell on, and believe that the streets of France (or literally anywhere apart from the UK) are paved with rosy-cheeked peasants who love foreigners, food is fresh, cheap and totally organic, and their meagre savings will renovate the hovel they're going to buy for £10K and leave them enough money to live like kings for the next 30 years.

Mr and Mrs Holidaymaker are, quite honestly, spoiled for choice (if they are still anxious to holiday in France in the first place). Given that such a large percentage of the early-adopters decided to open a Gite, the proportion of Gites to holidaymakers is still not far off its peak of 1:1. The problem is that they have weighed up their options and found that it's probably cheaper to holiday outside the Eurozone - and certainly France - at the moment, and that "climate change" has played havoc with their two weeks in August, which for the last couple of years have felt more like two weeks in November across much of Western Europe. That, and the fact that the only cheap way for a family of four to cross the Channel these days is in a rubber dinghy rowed by dad, is making them think that a two-week package to Izmir isn't the expensive alternative they once thought it might be.

Go on, tell me I'm wrong....[:D]

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Brilliant post Betty! The only thing I would add is the disappearance of the three main engines of growth that fuelled the home abroad purchases for Brits. Namely, easy credit, the strong £ and rising house values.

With the weak £, declining property values and mortgages for second homes difficult to obtain, it is unlikely we will see a return to the boom home abroad years for the foreseeable future.

Add to that rising taxation and the implementation of social charges on foreign second home owners in France, things are only likely to get worse.

As for Brit retirees to France, with the increasing retirement age and decline in annuity rates and pensions, by the time people in the future can afford to retire they will be too old to consider moving abroad!
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I always love reading your posts Betty, but this bit made me choke on my cuppa, brilliant!!!!!!

and believe that the streets of France (or literally anywhere apart from

the UK) are paved with rosy-cheeked peasants who love foreigners, food

is fresh, cheap and totally organic, and their meagre savings will

renovate the hovel they're going to buy for £10K and leave them enough

money to live like kings for the next 30 years.

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[quote user="idun"]I always love reading your posts Betty, but this bit made me choke on my cuppa, brilliant!!!!!!

and believe that the streets of France (or literally anywhere apart from

the UK) are paved with rosy-cheeked peasants who love foreigners, food

is fresh, cheap and totally organic, and their meagre savings will

renovate the hovel they're going to buy for £10K and leave them enough

money to live like kings for the next 30 years.

[/quote]

Really idun? Isn't it funny how we all see things differently.....

I found this particular diatribe to be pompous, pious and as having a somewhat patronising and sneering tone to it. So terribly 'clever' and worthy of a jolly good chortle among the 'initiated' ......

There are other, more polite and constructive ways of presenting a 'reality check'.

Chiefluvvie
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Chiefluvvie said:

I found this particular diatribe to be pompous, pious and as having a

somewhat patronising and sneering tone to it. So terribly 'clever' and

worthy of a jolly good chortle among the 'initiated' ......

IF I had been clever enough to say what Betty said years ago, I would have. Because I have found comments on this very board demeaning to french people............ all the happy smiling helpful people........ give me a break.....  and the lifestyle....................nothing to compare in the UK. And the property so cheap. And NEVER the France I knew right from the beginning.  So I found on this very board, pomposity, and piousness.

I cannot speak for Betty, but seeing my thoughts and feelings written so well, did make me laugh. It is sometimes nice to see that one's thoughts are shared to some extent.

I could say more, my views on France have often been at odds with many other poster's views and no I don't feel initiated, I just feel like a realist, as I always was.

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