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Discussion Starter · #1 ·
HI All, hope you dont mind my seeking your advice and benefit of your expertise and knowledge. I have spent a lot of time reading various forums and sources of info.
A bit of background, we will be moving to the Sarthe region near Le Mans to run our business. We intend to buy a home with a gite or maybe two. We already operate the business from the UK. We will not be reliant on the gite income to fund our life in France, its more of a complimentary side to what we already do, a bit of extra income and space for friends and family. The other option is to just buy a home (no gite) which would be a lower price. Its unlikely we would have a mortgage or if so a very small one.

So my questions are:
1. Do the gite/s you rent out cover the running costs
2. What were you occupancy rates during 2012/2013 (hope this isnt a cheeky ?)
3. What websites in addition to your own do you use for marketing
4. Are the bulk of your bookings from UK holiday makers?
5. Do you have any additional advice outwith tax etc

If anyone feels these questions are too personal for an open forum, please excuse me or feel free to PM me

Many thanks, Jules
 

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Hello

I'm replying by pm for most questions, but here we go

5. Tax we go for the abatement......I think it's 55% but I'm not sure. We are planning to go for the official (prefecture recognised) classification that give you around 70% abatement. Despite my use of Moneydance to do the accounting it's difficult to keep track of costs, so we go for the abatement.

DejW
 

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Discussion Starter · #3 ·
Hello

I'm replying by pm for most questions, but here we go

5. Tax we go for the abatement......I think it's 55% but I'm not sure. We are planning to go for the official (prefecture recognised) classification that give you around 70% abatement. Despite my use of Moneydance to do the accounting it's difficult to keep track of costs, so we go for the abatement.

DejW
Thanks so much, I have read your PM and replied, VERY helpful and much appreciated
Jules
 

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My answers reveal my precise location and my name etc which I am not prepared to do in public (blush). Send me a PM and I will send you my responses on the understanding that they do not appear on the web.

DejW

I would have liked to know the answers to the same questions. Could you publish for all to see?
 

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I can respond to one question:
What were you occupancy rates during 2012/2013.

Friends of ours who run gites say occupancy rates are 80% June, July and August, 40 % May and September and 10% the rest of the year.

Regards


Tank
 

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So my questions are:
1. Do the gite/s you rent out cover the running costs
2. What were you occupancy rates during 2012/2013 (hope this isnt a cheeky ?)
3. What websites in addition to your own do you use for marketing
4. Are the bulk of your bookings from UK holiday makers?
5. Do you have any additional advice outwith tax etc

Many thanks, Jules
From our experience:
1. barely if even, and the initial investment isn't even sniffed at (and property prices have dropped by 20% since we bought)
2. our season is May-Sept: 2012 was about 75%, 2013 has been about 30% - ie nothing till max occupancy August and then 25% September
3. we use an agent (who adds about 60% to our rates, so we had to drop our rates so as to stay below max ceiling)
4. none from the UK, other than friends. Predominantly Dutch/German but also Spanish, Italian, Russian, French,
5. don't do it. As they say, if you want to become a millionaire running gites, start with 2 million!

hils
 

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PS for this year, running costs have increased by about 15-20% (weather enforced, utility tariffs and increased insurances), but rental rates haven't
 

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Discussion Starter · #9 ·
I can respond to one question:
What were you occupancy rates during 2012/2013.

Friends of ours who run gites say occupancy rates are 80% June, July and August, 40 % May and September and 10% the rest of the year.

Regards


Tank
Thank you, thats very useful for my calculations :)
 

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Discussion Starter · #10 ·
From our experience:
1. barely if even, and the initial investment isn't even sniffed at (and property prices have dropped by 20% since we bought)
2. our season is May-Sept: 2012 was about 75%, 2013 has been about 30% - ie nothing till max occupancy August and then 25% September
3. we use an agent (who adds about 60% to our rates, so we had to drop our rates so as to stay below max ceiling)
4. none from the UK, other than friends. Predominantly Dutch/German but also Spanish, Italian, Russian, French, Italian
5. don't do it. As they say, if you want to become a millionaire running gites, start with 2 million!

hils
Thank you Hils, No.5 answer made me laugh, not the first time I have heard this advice and am sure wont be the last!
Our primary intention is to buy a home to live in, the idea behind the gite is just to try and buy a home with a gite to help with running costs only. I dont expect to make lots of money (that will be coming from our business) I see the gite as a bonus only and we'd be doing all the work ourselves, no agent or staff/cleaners etc involved, however if the running costs of a gite outway the income, thats a different consideration :)
 

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IMO; if the property you want has extra space that you could hive off potentially for self-contained letting accommodation, at minimal investment, it's possibly worth doing. If you buy specifically for gite-letting, you're probably on a hide into nothing (or very little). It IS hard work from start to finish and you have to factor things like sourcing your clientele, non-payers, frustrated bookings, etc etc, as well as the turnaround days (that's the easy bit!).

Remember that a larger property has much larger running costs: insurances, utilities, taxes foncieres and d'habitation, and the tax breaks, such as they are, depending upon your fiscal regime, don't necessarily cover ALL the costs - including all those hidden ones, such as laundry ...., never mind the initial investment. And it gets more complicated to separate out the associated costs if the letting property is part of the property you live in - but Dej knows more about that than I do - our properties are completely independent of where we live most of the time (ie they are in Corsica, we're mostly in the Auvergne)

h FWIW
 

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Discussion Starter · #12 ·
IMO; if the property you want has extra space that you could hive off potentially for self-contained letting accommodation, at minimal investment, it's possibly worth doing. If you buy specifically for gite-letting, you're probably on a hide into nothing (or very little). It IS hard work from start to finish and you have to factor things like sourcing your clientele, non-payers, frustrated bookings, etc etc, as well as the turnaround days (that's the easy bit!).

Remember that a larger property has much larger running costs: insurances, utilities, taxes foncieres and d'habitation, and the tax breaks, such as they are, depending upon your fiscal regime, don't necessarily cover ALL the costs - including all those hidden ones, such as laundry ...., never mind the initial investment. And it gets more complicated to separate out the associated costs if the letting property is part of the property you live in - but Dej knows more about that than I do - our properties are completely independent of where we live most of the time (ie they are in Corsica, we're mostly in the Auvergne)

h FWIW
Hi Hils
Thanks again for all your info.
To be honest the bookings part is the one that least worries me, we bring lots of clients to France every year on tours and for 2014 are fully booked for one event and 50% booked so far for another. We have clients we are accommodating in 3 chateaux, 1 hotel and 7 gites around Le Mans area, all of which we book from other owners.
We are now expanding the business to other areas in France that we know well, however my reasoning is that we have pretty much guaranteed clients for a few of our events and any other bookings would be a bonus (although dont get me wrong I'd love for it to be fully booked during the peak season!) IF we can find a property which has a separate gite, thats the ideal, we would not be doing big renovation projects or spending alot more money. We have so much work to do with our main business during the off season which will take us away alot from home that we would not be doing lets then.
Will have a better idea I suppose once we have been out viewing in Jan/Feb.

Jules
 

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Hi Hils
Thanks again for all your info.
To be honest the bookings part is the one that least worries me, we bring lots of clients to France every year on tours and for 2014 are fully booked for one event and 50% booked so far for another. We have clients we are accommodating in 3 chateaux, 1 hotel and 7 gites around Le Mans area, all of which we book from other owners.
We are now expanding the business to other areas in France that we know well, however my reasoning is that we have pretty much guaranteed clients for a few of our events and any other bookings would be a bonus (although dont get me wrong I'd love for it to be fully booked during the peak season!) IF we can find a property which has a separate gite, thats the ideal, we would not be doing big renovation projects or spending alot more money. We have so much work to do with our main business during the off season which will take us away alot from home that we would not be doing lets then.
Will have a better idea I suppose once we have been out viewing in Jan/Feb.

Jules
OK - looks like you might well have a go-er. So you're right, it's the fiscal side of things which you need to pin down.

Can't really help, as we're in a completely different situation, but I think you stand a chance of doing pretty well/at least break-even. Good luck.

hils
 

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Having seen bookings down this year, have just got a booking for NEXT August for 2 weeks; unheard of ...!!!!! Hope it bodes well :)
 

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Yah boo sucks to you then Dej :D
But you have spa attendees & a regular clientele, don't you? It's not like regular just holiday lets is it, your place?

Anyway the 2014 booking has just been cancelled, so there we go ..... ah well.
 
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