The Diplomat May 2011 - Property Watch with Hugh Atkins

Pure France real estate expert, Hugh Atkins, advises Diplomat readers on property investment in France

The French holiday rental market is flourishing, benefiting both investors and renters who are looking for a slice of the Gallic good life. A long time popular holiday destination for both the French (preferring to stay closer to home) and overseas visitors alike, France continues to draw a healthy number of tourists and 2011 figures are already set to top 2010.

For the British in particular (of whom around 19 million travelled to France in 2010), the draw for holidaying in France is its geographical location and proximity to UK, the weather in Southern France, the food and the wine. France also saw a shift in trends during the global recession with many Brits holidaying closer to home, ditching long-haul in favour of short-haul Summer sun.

With a constant stream of tourists looking to rent idyllic French property, the pound strengthening against the Euro and French mortgage rates at an all time low, the time is right for French investment. Savvy investors are capitalising on this and the South in particular has experienced a surge in activity as foreign buyers return to purchase second homes. This in turn creates a competitive rental environment, driving quality and rental prices.

The rental process, especially in the summer months, can bring in around 14 weeks of income and provided buyers have done their research and match their needs to that of the rental markets, there should be little difficulty in producing a successful season. This all depends heavily on the property itself of course, and buyers must think about location, location, location, room configuration, maintenance and a host of other factors when deciding to invest in a buy-to-let property.

For the Brits this environment shows no sign of slowing, with French transport links ever-improving. Accessibility via Eurostar and the TGV, the glut of airline access (Ryanair flies to 16 destinations and easyJet to 13) and the ferry means that travel costs are generally low and make France an even more inviting prospect.

For UK buyers, the Dordogne Valley, centred around the town of Bergerac and reaching westward to Bordeaux and eastwards to Sarlat remains a popular area to buy (and also for holiday home rentals) as is Gascony at the foot of the Pyrenees and Provence, with its steady supply of property and prices remaining static. With Provence, aside from the obvious attraction of the coastal properties, the most appealing areas are still the traditional Provençal countryside villages - particularly in Luberon, close to Aix, Lourmarin, Avignon, Arles & St Rémy and within striking distance of the Cote d’Azur. These areas usually present higher property prices but in turn receive a higher return on investment, meaning that a well priced property, in close proximity to the beaches of the Med, is always good choice.

What is important to remember is that marketing the property correctly is key. Get a good website with good photographs and use the best advertising portal to promote it. If your property is of high quality then working with a rental partner who has a solid and loyal client base, built up through the personal touch, is ideal.

Investment in a holiday rental home or business will not make you rich overnight, unless you are going down the total renovation, property development route. An average ROI is around 5% but if you get your proposition and marketing right, you could see an ROI of about 7%. Long-term the chances are the property will increase in value and rental income will reduce any borrowing and your investment can be realised.