Jump to content

Will a gite cover the mortgage??


froggiemel
 Share

Recommended Posts

Hi all,

my fiance and I are looking to move to Normandy (Caen-Bayeux-Cherbourg). The plan is to buy a 'corps de ferme' for around 100,000 euros and spend the same amount again renovating it. We want to live in one half and use the other half as a gite.

However we are young and only have a small amount of equity to be had from the sale of our current house... I'm bilingual so finding a job shouldn't be a problem, but my fiance currently owns a car sales and repairs garage and doesn't speak a word. Would he be able to find work as a mechanic/labourer with no French? This would mean a fairly low income between us and I wondered what you thought of the gite idea - would it give us enough to cover the mortgage? I have an extensive knowledge of the tourism industry in Normandy but I'm worried about the saturation of the gite market. Would it be better to buy an established gite business? Or a hotel? Affordable ones, however, seem to be like rocking horse droppings...

We are worried about giving up a healthy business in the UK to go to rubbish, boring jobs and struggle financially......

Any comments very much appreciated!

 

Link to comment
Share on other sites

Great that you're doing your homework before making the leap!

I moved down permanently on my own aged 34, and not regretted it (I will add that most of my life I've lived abroad so I'm used to a 'big change' and I think that's helped me tremendously).  I had property in the village already and knew prior to moving that the gite (self-contained, own garden etc) would not pay the mortgage or put food on the table all year round.

As for your fiancee moving without a word of French, I think if you really try to integrate he'll pick it up fairly quickly.

I don't know Normandy, it's demographics or economy but here in the Aude you might struggle; getting work is a battle most of the time.  I'm both self-employed & employed on a salary to make ends meet. 

I don't know what the requirements are to set up a garage but if you had the building with accomodation I would go down that route & advertise as much as you can - that with a lot of word of mouth (which is how I've got a number of contracts in the area with French companies/govt.) around the French community (& English) you should do well.

The gites market here is saturated, as is B&B .. I would stick to what you know and make it work for you this side of the channel, with your French  you could probably get him set up in business and then get out to find your own work.  You will struggle initially but it should be worth it if you stick at it!!

Bonne chance!

Link to comment
Share on other sites

Hiya

I don't want to discourage you at all (we moved here 5 years ago in about the same position as you and don't regret it at all), but I personally wouldn't count on gite income to live on. If you could find a job first that could keep your heads above water before you get here, and then use income from the gite as a (much needed) bonus, then that's probably the safest way. Also we found that renovations took twice as long and were twice as expensive than we ever counted on (even though we thought we'd taken that into account!). I know everyone says it - but it's true I'm afraid.

Re the gite saturation: My advice would be to look for something different you can offer that will make you stand out.

It's good that you're thinking hard about it - we didn't really. We just made the jump, and there have obviously been times when we have realised how stupid that probably was. France is just a different scenery - being broke and worrying about where the next mortgage payment is coming from here isn't any more fun than it is in England. If anything it's a bit harder because you don't know the system, the language, you're away from your friends and family.....

Anyway, I don't want to sound like a wet blanket and I really hope you find a way to make it work out - as I said, we don't regret it and have no plans to move back to England, despite having modified lots of our original daydreams!

Good Luck!

Suzi

www.patiras.com/trinite.htm

Link to comment
Share on other sites

In answer to your question, unless you are absolutely exceptional the answer to your question is a resounding no.

I would also say that your idea of getting two habitable houses (one for yourself one to rent out) for €200,000 (covering purchase and repairs etc)  in Normandy is rather optimistic.

Dont count on finding a job, other than possibly the most menial work, or casual black market work. Unemployment outside the big towns is pretty high and French nationals will usually get preference. The garage business is pretty competitive in the area and not much money to be made, there are even quite a few British garagistes catering to the Brit market so that area is well covered too.

Sorry if it is not what you want to hear but I would rather see people disappointed at having to rethink their plans early on than find out these things when it is too late.

Link to comment
Share on other sites

I really hate to sound pessimistic, but have you already found your corps de ferme for 100,000 Euros? There certainly aren't any around here in Seine Maritime for that sort of money. I call it the "abatoir" theory - if you find a property on a website that has a price that seems too good to be true, that's probably because there is something wrong with it - near the abatoir, the motorway, or some other such negative aspect.

But, assuming you do find such a property, and have spent 200,000 in total on purchase and renovations, how big a mortgage will you need and how many weeks will you need to book in order to sustain this mortgage? We have had our house in Normandy for 4 years now, and we have been exceptionally successful at letting it out (39 weeks booked in 2006). Even so, we have never made a profit.

These are our figures for 2006 (in Euros):

Sales 19,066

Insurance: 397
Repairs/Maintenance: 5342 (we had a new kitchen installed, and our maintenance fees are quite high as we don't live on the premises and have to pay a cleaner and someone to cut the grass)
Utilities: 1518
Publicity/Postage etc: 615
Purchases less than 380 euros: 2187 (miscellaneous furniture and bits for the new kitchen etc)
Peofessional Fees: 436
Misc: 273
Local Taxes: 890
Mortgage Interest: 5780 (OK, we have a big mortgage!!!)
Bank Charges: 125

Anyway, I'll let you "do the math", and yes, we do spend a lot of money on the upkeep and furnishings of the house but that is what makes us successful at letting it.

We have a lot of (English) friends in the area who are really struggling to make ends meet. There are not a lot of jobs in rural france, well not in our area that's for sure, and it's even harder for non-locals to get jobs. Many of our friends have ended up getting jobs back in the UK and commuting back to th the UK on a weekly basis, leaving wife and children stranded during the week at the house in France, seeing even less of each other than they did before they made the move. and spending miserable sundays with the thought of the commute the following morning hangine over them.

Sorry to be so negative, but please make sure you really really think this through before you make the final commitment.

EDIT:
Just realised that in my figures above, I only quoted for mortgage INTEREST payments as they are the only ones you can set off against tax. Our ACTUAL mortgage repayments are twice that, once you include the repayment part of the mortgage. We took out a 140,000 euro loan over 20 years and our monthly repayments are 902.19 euros. We are very fortunate that we both have full time jobs in the UK so we are able to top up the mortgage out of our UK earnings and don't have to rely on the rental income to cover the mortgage.

Also: Be aware that I don't think french mortgage lenders base the amount they will lend you based on the value of the property and its potential letting income. As far as I can remember, it is all done based on a percentage of your income, and they are very strict, by law, as to the maximum you are allowed to borrow, inlcuding the total of ALL loans, credit cards, etc, in the UK as well as in France. Please consult a financial guru on this matter because it may have all changed in the past 4 years, but it was certainly very strict when we took out our loan.

Link to comment
Share on other sites

I can only reinforce what others have said.  Have you found your corps de ferme - because one of those in the Caen-Bayeux region for 100K is going to be even rarer than rocking horse poo.  I was in Bayeux on Saturday with visiting family, brother in law is a builder, so he was happy to look at properties needing LOTS of work, there was nothing in that area for less than 160K that still needed lots and lots of work, and certainly not big enough to become a home and a gite.  There are 100s of gites and B&Bs in that area but I think they all get pretty booked up in the summer season (ie July/August). Our family and friends commented on just how few "tourists" there were wandering aroun the cathedral and tapestry area of Bayeux this weekend and the weather was glorious.

What kind of work would you be looking for?  Even though you area bi-lingual there is not a lot of work to be had that will earn good money.  If you OH doesn't speak any French then don't bank on him getting a job any time in the near future and if he starts up on his own and tries to get work from the Brit community just remember the high social charges.

Sorry it sounds negative but on the sort of money you're talking about and without having jobs, PLUS having a mortgage I think in this region you're on a hiding to nothing.

Link to comment
Share on other sites

Hi. Also don't want to sound negative, but getting any form of paid work is extreemly difficult. My husband (age 35) spent over a year looking for work. He is completley fluent in french, has a degree in french, and over 12 years of work experience in marketing and banking in the uk. He even registered with temp agencies but didnt even get one job interview in 12 months. Luckily we were able to live off our capital for 12 months. He now has his own business as a translator and we are managing to survive - just. We live in Normmandie, but not in a rural area! Husband was looking for work in Le Havre or Rouen. With our mortgage payments we need a minimum of Euros 2500 net to live on. (We do have 2 children). Jobs that pay enough are very difficult to find! The best advice is to find paid employment before you move over. Gite rental income, as already mentioned, will not be enough to pay a mortgage on a Euros 200K property. Joy

Link to comment
Share on other sites

  • 2 weeks later...

Thank you very very much everyone, you are all full of great advice!

We have considered going down the road of opening a garage but I will need to be there the whole time because hubby doesn't speak French, which means I can't get a job elsewhere to make ends meet....

We're now thinking of running a gite from the UK for a bit, to see how it goes before we make the jump.

By the way, I have seen some corps de ferme for €100,000! But you're right, probably not big enough...

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

{template="widgetContainer" group="global" app="core" params="'footer', 'horizontal'"https://www.frenchentree.com/}
×
×
  • Create New...