Profitable business?

[motherland]

Hi!

My husband and I have plannedto invest in a house + 4 gîtes (not

B&B)  in the South of France. We did the maths, checked the

rental prices, etc...considering our target (foreign customers) and our

assets (activity offered), we think we would manage. Gïte activity

should make our family live, as this is going to be our sole source of

income. But, before jumping into it and investing all our money, we

would like to hear from gîte owners that "yes, it is possible to live

from this activity, that with this activity only and hard work, one can

live happily"...or are we just dreaming and that no matter the number

of gîtes available for rentals, we won't generate enough revenue to

make a living out of this activity?

Could you share your experiences/pitfalls/successes with us?

[bobwils]

We have been involved in a gite rental agency here in the South of France for a number of years. Our experience is that gite complexes (more than one gite) are not popular, especially with The British. Most people want their own private villa with a pool and they are willing to pay for it, price is not the overriding factor. The principle concern is sharing, most families looking for 2 bedroomed accommodation will accept sharing a pool with the owner of the property but no-one else, those looking for 3 or 4 bedroomed accommodation normally go for the private villa. There are some people who will accept a complex, a few who actively seek them (others to play with the kids) but they are few and far between in our experience and you will have a fair amount of competition as others have already set up complexes and are now desperate to fill them. Hopefully others will comment and, maybe they will report differently, these comments are just what we have found. We wish you well in your endevour.

 

Bob

 

 

[Quillan]

Have a look at http://www.gites-in-france.co.uk/ there are loads of gite complex's for sale, the question is why?

I have nothing to do with the above website, just something I found.

[nimportequoi]

I have a relatively small gite complex, but I think the fact that it is in a good location (not too far from the beach) and has a pool is a big plus. I agree that most people probably prefer a private villa, but if the choice is between a private house without pool or a gite complex with a pool, the gite complex with a pool wins. Families who stay with us in peak season enjoy the fact that there are other children around for their kids to make friends with. The prices are usually quite a lot cheaper too. Personally, I have not experienced any difficulties in filling my gites at all, however, I agree that there are an awful lot of complexes for sale, so that does indicate that there is a problem in some areas of France. Regarding viability of running a gite complex, there has recently been an interesting discussion about this on the LayMyHat website if you are interested:

http://www.laymyhat.com/forum/viewtopic.php?t=1594

 

[motherland]

Thanks you all for your comments.

Susan,

how "small" is your gîtes complex? 3- 4?

Do I understand right, that with your current bookings, you actually can live from this activity and do not need an additional source of income?

[Moorejw]

It all depends on how much you need to live on and your expected lifestyle. We moved to France once the kids had left home and we are mortgage free, so we only need to support ourselves. We will have 3 gites when our renovation work is finished and from the first year in business, when we were fully booked with one gite, and the bookings for this year with 2 gites completed, we know that we can afford to live here. BUT we have a relatively modest lifestyle, are aiming to be self-sufficient in veg, fruit, eggs and chickens, and holiday in a camper van or caravan.

You also have to do your worst case scenario planning, and see whether you could afford it if you were not fully booked. I, personally, do not think that a young family could afford to live on the income from 3 or 4 gites. I have had two kids and I know how expensive they can be!

[Eslier]

Like so many of these types of question, there are many variables and there is no simple answer.

IF you have the right properties in the right location with the right facilities then yes, of course, it is more than possible to make a decent living. To get all these things right, however, will almost certainly require a substantial initial capital investment. I have a small gite complex of three properties plus owners appartment with the allimportant heated pool and it generates an income of about 60,000€ per year. After all costs (including our own utility bills, tax, social charges etc.) we probably clear about 40k€ of which, we probably plough another 5 or 6k back into the business in the way of improvements and new facilities (tax deductable!). To buy a business such as ours, you would need to have around 750,000€ to get going and a bit more in the bank to see you through the first year. You would also need to do a lot of homework first to make sure you have chosen the right location that will attract enough visitors. Even in a popular area you would be surprised how much difference a few km in one direction or another can make.

Good luck in your proposed venture. You will find this forum to be an excellent source of information.

[motherland]

Eslier,

may I ask you what is your occupational rate to generate a gross income of about 60K€? You must be renting your 3 gîtes at least 26 weeks by year, or?

[Patmobile]

Yes, with good marketing and a quality product you should be able to make a decent living.  24-26 weeks of occupancy a year is our average for high quality cottages in attractive rural parts.  30+ weeks each year can be achieved by the seaside, especially if there are good local facilities that are available year round.

Although good marketing does not necessarily mean lots of expense, you should certainly budget a sensible amount for advertising in the first few years.  By sensible, I mean think of a reasonable number and double it.  It might hurt when you start paying, and you'll probably be able to trim it back later, but, as Orville Wright might have said, "You can't fly if you don't get off the ground."

Patrick

[nimportequoi]

We have a similar size business/turnover to Eslier's. I work as well, but only because I enjoy it more than staying at home all day during the winter and I earn a lot more  than I pay someone else to do the DIY and decorating required. I agree about the marketing, I spend about 4/5% of turnover of this on advertising, if you skimp on this you won't get the bookings.

[Eslier]

The largest six bedroom property lets for about 14 weeks (seven of which are at £1800 per week) and the two smaller properties for about 20 weeks each.  Having said that, this year we already have 14 weeks booked for the big house so we are hopeful of two or three more weeks and an exceptionaly good year.