Jump to content

Build, renovate or martgage and lots of questions!


Recommended Posts

I posted here a bit last summer about our potential move to France, now hopefully in a year or so's time.

We haven't managed to get over yet to start having a look around because my partner's business really took off in the second half of last year, and she's been phenomenally busy.  Plus, I decided to start a business alongside my full-time job back in October, and that's keeping me pretty busy as well.  The good news is, the money is coming in at a good rate at the moment, and our initial plan to rent has turned into a possibility of buying.

Of course, it isn't exactly like winning the lottery, so there are some limitations on us .....

We're currently weighing up the pros and cons of buying a plot of land with CU in place, applying for detailed planning permission and building as the funds come available.  Or buying a building to renovate, again as funds are available.  Or finally, applying for a French mortgage in my name, based on the income from my full-time job, and buying a house that's immediately habitable.

Can anyone who has done any of these suggest some pros and cons?

Building and renovating seem to have the same disadvantages of either being at a distance while contractors do the work, or renting nearby for the duration.  I'm confident of my ability to keep bringing in the money to pay for the work, even in the current economic climate, so that isn't an issue.  But obviously, giving up my full-time job and then having to rent in France will reduce the amount of available funds.

Would we be able to live in a mobile home on the plot while the work was being done?

We're also considering an eco-home, mostly built by ourselves, and I've ordered a copy of La Maison Ecologique to find out more about eco-homes in France.  (I'm aware that some work, such as electrics, has to be done by registered professionals.)  This would save dramatically on costs, and is my preferred option because it's a dream for me to have built my home with my own hands.

The option of buying a home with a mortgage is probably easier, and I don't think there would be any barriers in my case.  The amount we would want to borrow should fall comfortably within the one third of gross income that I've read about, if I use my job as income source, say it's a holiday home and that my partner pays all the bills on our current home.  My bank account is very healthy, and shows a steady flow of money through it.  We would be looking at a maximum 60-70% mortgage, probably less.

I assume there's nothing the lender can do if you choose to leave your job shortly after getting the mortgage and buying the house, as long as you keep up the repayments?  We would also be looking to pay off the mortgage early.

My gut instinct tells me to buy the land, follow the dream, and don't get into borrowing territory (borrowing not being my favourite thing), but there are probably a lot of things I haven't considered.

Does anyone have any words of wisdom for us?

Link to comment
Share on other sites

You appear to have it all in the UK, both with businesses doing well !

When you move here, you will have nothing, unless you plan to continue your existing businesses ?

As to your housing question, your more likely to find the right place for you, in one that already exists, be it habitable or in need of renovation, since the best locations has had property built on it long before we all decided to move here.

Financially it has benefits, since there is still so much property out there, starting from as little as a good months salary ( UK), then the rest is upto you!

regards

Link to comment
Share on other sites

Thank you for your reply, tj

We definitely don't have it all.  Yes, we're comfortably off, but we still live in a rented house that we could be told to leave with 2 months notice regardless of whether we pay the rent or not.  It doesn't make for a settled feeling.

We will definitely continue our existing businesses in France.

What do you mean by best locations?  I see a lot of good locations to build here in the UK (with prices way out of our league, I might add), and I understand the UK is far more densely populated than France.  But perhaps our requirements are less than most people's.  All we want is a little house in a rural location where we can enjoy our main hobbies of walking and cycling.

Link to comment
Share on other sites

What TJ is hinting at,  I believe, is if you continue your businesses in France, whilst living in France they become French businesses.  Any base in France of a UK business has to be registered in France.  This means that you are then subject to French employment charges and taxes.  Which asssuming that you keep your existing clients means that your businesses might not be as profitable in the future.
Link to comment
Share on other sites

Hello, Ron

Yes, I understand that.  It isn't a problem.  We're not talking about huge amounts of money here, so the effect will be relatively small.  I also have plenty of opportunity to expand my business when I'm no longer working in my full-time job and have more time available, so we'll probably end up better off in France.  The only reason I'm keeping the job at the moment, and not concentrating full-time on the business is that we may decide to go the mortgage route, and it will be far simpler to base that on income from employment.

It might sound as though we're pretty well off here, but we're not.  I'm talking about buying a small house in Creuse, Deux-Sevres, or one of the other least expensive Departments that will probably still need some work even if we go the mortgage route.

Link to comment
Share on other sites

[quote user="Lulubel"]

  It isn't a problem.  We're not talking about huge amounts of money here, so the effect will be relatively small.  [/quote]

 

No actually with just a small business you might find the impact is enormous.  Even with a moderate business expect outgoings to the government and other bodies to be up to 60% of income.  With a small income outgoings can be more than income.

 

Now to your question about housing:  have done 2 and 3 simultaneously.

 

My comments - renovations easily become money pits.  Clear ideas of what you want and 100% specification is essential.  Change orders cost money as do the things you thought were included but are not.  The ruin for a month's salary can easily top out at several year's salary - so before you go this route be sure it is really what you want and have it fully costed.   The advantages of course are that you can tailor the building to what you want and need (within budget of course).  If you are looking for an investment this is probably the worst option - but if you want investment property in France is possibly not a good move.

Ready built house - you know what you're getting.  You can move in straight away - but it may not be exactly what you want - and to turn it around to be 100% what you want - see renovation comments above.

 

 

 

Link to comment
Share on other sites

If you're looking at moving your businesses to France I'd suggest that you start by watching all the videos on this site:

http://thenakedaccountant.wordpress.com/10-questions-to-start-up/

They'll give you some idea of what you're up against and what your options are. Last year I got Lisa to do me some comparative figures for different types of set-up and they really helped to clarify the effect on the bottom line.

 

Link to comment
Share on other sites

[quote user="andyh4"] 

No actually with just a small business you might find the impact is enormous.  Even with a moderate business expect outgoings to the government and other bodies to be up to 60% of income.  With a small income outgoings can be more than income.

[/quote]

I'm still not sure that I understand this.  Everything I've read online about the different types of business has stated the ongoing outgoings as percentages.  I will have to do some more research.

Link to comment
Share on other sites

[quote user="Albert the InfoGipsy"]

If you're looking at moving your businesses to France I'd suggest that you start by watching all the videos on this site:

http://thenakedaccountant.wordpress.com/10-questions-to-start-up/

They'll give you some idea of what you're up against and what your options are. Last year I got Lisa to do me some comparative figures for different types of set-up and they really helped to clarify the effect on the bottom line.

 [/quote]

Thank you.  I'll watch them tomorrow.  (Have to be up for work at 4am, so need to start winding down now.)

Link to comment
Share on other sites

[quote user="Ron Avery"]What TJ is hinting at,  I believe, is if you continue your businesses in France, whilst living in France they become French businesses.  Any base in France of a UK business has to be registered in France. [/quote]

... not so, apparently, if the 'centre of economic interest' remains in the UK, according to a French accountant (also UK qualified ) that I spoke to recently

Link to comment
Share on other sites

[quote user="Lulubel"][quote user="andyh4"] 

No actually with just a small business you might find the impact is enormous.  Even with a moderate business expect outgoings to the government and other bodies to be up to 60% of income.  With a small income outgoings can be more than income.

[/quote]

I'm still not sure that I understand this.  Everything I've read online about the different types of business has stated the ongoing outgoings as percentages.  I will have to do some more research.
[/quote]

 

percentages of what the authorities think you should be making (and possibly corrected in arrears - not percentages of what you actually make.

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

×
×
  • Create New...