4 reasons to buy a new-build property in France
PUBLISHED: 09:25 16 September 2015
A new-build property in a managed residence may not be your first thought when you start looking for your dream house in France, however, there can be a number of advantages to buying new, especially if you are buying a property as an investment or holiday home and aren't planning to live there full-time
1. LOWER NOTAIRE AND AGENCY FEES
The notaire fees on new build versus older property (more than five years old) are quite different. On new-build properties, the typical notaire fees are 2.5%, compared to 7-8% for old properties. So for a typical property value of €300,000, buying new means a saving of around €15,000. In addition, when you buy a new build from a developer (even if an agent is involved), there are no agency fees to pay. As agency fees are typically 6-10%, this means a saving of at least €18,000 on a property worth €300,000. So in total, buying new will save you approximately 11% of the property price, which is money that can be spent elsewhere according to your needs.
2. LOWER REPAIR AND MAINTENANCE COSTS
New properties come with a 10-year build guarantee, which ensures that if there are any defects, they are covered by insurance, so you can be sure that you are not going to have any nasty repair bills in that time. When buying an old property, there are no such guarantees, and being significantly older, they tend to need more repair and renovation; if not immediately then certainly within 5 to 10 years of ownership. This is an important factor to consider, as aside from the potentially significant repair and renovation costs of a property, you also have to bear in mind that if you do not live there, then you will have to manage French builders from a long way away, which can prove challenging. The same goes for general maintenance. If there is a leak in the house, for example, and you don’t live there permanently, you may not spot it until the next time you visit. This could be a few months, by which there could be substantial damage.
Buying new doesn’t mitigate these risks, of course, although it does reduce the chance of them happening – which is why a new build within a managed gated residence can be a good option for people who are looking for a holiday home, especially if your French language skills are not quite up to scratch.
Buying an apartment or villa within a gated residence with an on-site management company means you can be sure that they will perform regular checks (usually at least once a week). If there are any leaks or damage of any kind, the management company will take care of it for you. So you don’t need to phone around and try and organise a local French tradesman to come in – this can be particularly helpful when you don’t live there permanently and therefore are not in a position to check that the work has been completed. This also applies to the maintenance of your garden or swimming pool, which can be very hard to manage from hundreds of miles away. If you do manage to find someone who you can trust and who can do it, the cost of hiring such people is quite high in comparison to a residence of multiple properties, where you can get economies of scale.
3. GOOD SECURITY
Security is also an issue for properties that are not within a gated residence and are left empty for weeks or months on end, as there is no one to stop potential thieves or squatters from entering the property. By being in a secure, gated community with someone always on site and other owners never too far away, the chances of having a break-in are, by and large, very minimal.
4. GOOD RENTAL POTENTIAL
If you are looking to earn rental income from your property, then of course you can rent out both new and old property. It is important to remember, however, that renting out a stone cottage in a pretty rural area of France will require work, and will also require finding someone who is capable of doing the changeovers, cleaning and linen provision, if you do not live on-site. If you buy a new-build property in a residence with a management company on-site, then they can take care of all of this for you, and will have the additional benefit of being able to do deals with tour operators (as they will have a number of properties to rent out) to ensure a good and steady occupancy rate and, therefore, rental income. If they are a large experienced company, they may also have a very large customer base to attract to the residents themselves. If a residence has an on-site management company, it usually also has some on-site facilities such as swimming pools, tennis courts and golf courses which further help attract holidaymakers. These factors can result in a higher rental income than would be obtained by trying to do it yourself, with a lot less effort.
Nick Dowlatshahi is the managing director and founder of Leapfrog Properties, which specialises in sales of French property to international buyers and offers a free fully comprehensive English language service, including mortgage broking. www.leapfrog-properties.com
Considering a new-build property? Click here for our pick of 3 new-build properties in France