Investment simulation - Cherbourg, Barfleur, Valognes, Les Pieux

BECOME AN INVESTOR
Whether the aim is to build-up an estate or to boost your pension – you are right to consider a “buy-to-let” solution. Whether your financial means are great or modest, there are alternative schemes and various tax advantages that guarantee a solution adapted to your means.

LONG-TERM ARGUMENTS
An inheritance for your children
As a parent, you are intent on insuring a comfortable future for your children. As an investor, you may already have envisaged investing money for them. Why not invest this money in property ? You will then, in turn, hand-down an asset which generates income.

An improved pension
We are all concerned with making provisions for a more comfortable pension. Thanks to the income from the rent – buy-to-let is an ideal way of boosting your future earnings.

IDEAL CONDITIONS FOR GETTING STARTED

Undeniable tax advantages
To stimulate the rental market, taxation laws benefit landlords.

For example – the Borloo law enables
landlords to deduct up to 65% of the acquisition price from their taxes. Or alternatively incentives for reducing income tax.

All-time low interest rates
Over the last 10 years, interest rates have dropped by approximately 50%. This tendency improves borrowing prospects.

Greater return on investment
Return on investment is increasing thanks to a strong and constant demand in the rental market. This situation enables a profitable and risk-free alternative to stocks and shares.

Newly adapted loans and mortgages
Specially adapted for buy-to-let schemes, they are designed to optimise the investment.

Source : UCB mag’ – investor edition

"BUY-TO-LET” AS A SERIOUS ALTERNATIVE
>>> See an example

According to a study from Aon Consulting which compares the standard state pension with average wages in each Europen Union member state –

The average state pension is £100 per week and private pensions are not only becoming more and more risky, but also only offer a limited income:

For example, a male aged 65 (non smoker) – who has invested £100,000 on a pension scheme over his working life - can expect to earn aprox. £7,000 per year or £583 per month.

In addition, in the case of death – the residual value of the fund is only 50% of its initial value unless the beneficiary has taken out specific (but costly) provisions.

It is time to look into alternative and/or additional pension schemes which can provide the following:

At GIMAZANE IMMOBILIER, we have carried out significant research, and are convinced that purchasing a property in the Cherbourg peninsula on a buy-to-let basis is a REAL alternative. As a reputed estate agency with both property management and property sales departments, established in the Cherbourg peninsula since 1994 – we will convince you of the numerous benefits.

We can assist and accompany you through all aspects of the buying and renting procedure with our 2 British members of staff.

The rental market in the Cherbourg Peninsula is expanding rapidly – demand is greater than supply. This means that rented houses rarely remain empty.

In France tenants remain in rented accommodation for an average of 31 months. According to a study carried out by ARLA (Association of Residential Letting Agents) tenants in the UK stay in rented accommodation for an average of 17 months.

By letting through an Estate agent that has a property management department – there is no stress or hassle attached to the scheme. It is worth noting that in France in order to be an estate agent, it is obligatory to have a license which can only be obtained after significant experience or training in the same field. This means that the agency is reliable, professional and regularly checked-up on. If it breaches the law- it immediately has it’s license withdrawn.
The agent will deal with:

Despite the wide range of services provided and the reliability of agents - property management fees in France are considerable cheaper than in the UK; they amount to approximately 7% of the rent, compared to 12-15% in UK.

The cost of insuring a rental property is considerably cheaper in France than in the UK. (In the UK, the sum insured should represent the full RE-BUILDING cost of the property. Almost 40% of UK properties are under insured, which means that in the event of a claim, insurers will not pay the full amount of the claim. In France on the other hand insurance policies are not based on a re-build value). Example : in the Cherbourg area - a 2-bedroom house can be insured on a “buy-to let” policy for approximately £120 per year. There are also insurance companies that provide a fully comprehensive policy specially adapted for “but-to-let” properties. These offer cover in the case of damage or deterioration to the property, un-paid rent, property remaining vacant, and the cost of legal aid if it becomes necessary. These policies can cost up to £250 per year.

In the case where a tenants benefits from state subsidies, the subsidy (which covers a % of the monthly rent) is paid DIRECTLY to the landlord. This provides a real guarantee of payment.

The lease agreements in France allow the owner to retrieve the house for his own use or if he wishes to sell the property. At the same time a standard lease agreement is for 3 years which explains why tenants tend to remain in rented accommodation for longer.

PURCHASING THE PROPERTY

The initial investment is considerably less in the Cherbourg Peninsula. It is possible to acquire a 2/3-bedroom house for less than £120,000 (including all the buying fees), compared to a similar property in the UK at aprox. £300,000.

It is advisable to take-out a mortgage for the initial purchase. Mortgages in France are advantageous as they have a fixed interest rate and the rate is also considerably lower than in the UK.
For example, it is possible to borrow £110,000 over 25 years at a fixed rate of 4.6% - this represents monthly instalments of £617.00.
In the UK – a similar loan would have an interest rate of aprox. 6.6% therefore the monthly instalments would be £1,043.40

For those that do not wish to take out a mortgage and wish to invest a lump sum – you can be sure that this form of investment will offer a much better return that any savings account or stock exchange investment.

AND AFTERWARDS ?? INHERITANCE ISSUES

One of the major inconveniences with the British pension scheme is that there is a very poor provision made for a remaining spouse in the case of death.
The advantage of handing down a property is that the government doesn’t take half of it !
This means that your widow(er) and/or your children can either continue to benefit from the rent that is being paid on the property, or sell it and enjoy the proceeds.

WITNESS ACCOUNT

"Priced-out of the UK market, we were surprised at the affordability of French properties and the incredible value for money in comparison. The process of buying in France was both quick and easy, making just two day trips for the house-hunting and contract signing. The Agency has always been very efficient and approachable, helping for smooth, stress-free transactions and dealings. Buying property in France is definitely a long-term investment option worth considering."
Mr & Mrs Kyriakides, England