How to select your investment in a tourist residence

Published on 01 Septembre 2017

Building up an asset base, tax exemption, supplementary income, preparation for retirement… an investment in a tourist residence offers many advantages. Here are some trustworthy tips for choosing your property!

While rates remain very low and the price per square meter increases, rental investment naturally becomes one of the best solutions to invest all or part of ones savings. Investing in a buy-to-let property, however does includes significant risks and requires day-to-day administrative management, which may not be suitable for everyone.

An investment in a tourist residence make it possible to benefit from the advantages of a rental investment without the disadvantages. These benefits include their attractive profitability (around 4%) as well as the investor being able to enjoy a vacation in his residence for one to four weeks a year. All of this without having to search for potential tenants or collecting arrears as this would be the responsibility of the manager.

Key criteria: location

As with any real estate investment, location is the most important element – tourist residences are no exception! A property by the beach that is easily accessible by foot is ideal. The proximity of the slopes and ski lifts to the mountain residence are what set your property apart from the others. In the context of a mountain residence altitude is fundamental as a higher altitude means a prolonged ski season, which equals more tenants. In either case, the presence of shops and public transport is always a plus. Do not hesitate to visit the site to determine the potential of the program. Ask yourself if you want to stay, if the answer is no, it is likely that the fill rate is not optimal!

ATTENTION: CHOICE OF OPERATOR

This is something that investors sometimes overlook. The choice of the manager is crucial to making a good and profitable investment as it is that company who will be responsible for finding tenants, maintaining housing, collecting rents and providing the various services offered by the residence (catering, linen, etc.).

It is therefore imperative to choose a professional, serious individual for this role. Financial strength is another important factor as it gives potential investors reason to have confidence in their chosen manager. It is important that this person is also able to provide the services offered by the residence throughout the lease term. It is therefore recommended to choose a large brand recognised for its experience and which manages a vast park of residences.

ATTENTION TO LEASE

Do not hesitate to reread the commercial lease point by point, and possibly have it checked by a professional (lawyer, notary ...). When doing this, you must take into account who is responsible for the cost of the work, the cost of maintenance, the replacement of the furniture. Who is responsible for a possible façade refurbishment or equipment rehabilitation? These points may, if necessary, weigh on rental profitability.

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