Invest in a Tourist Residence
Guaranteed profitability, a solid asset base and the possibility to benefit from stays: investing in a touristic residence may just be the ideal way to combine business with pleasure.
Touristic residences are groups of fully equipped and furnished apartments, typically found in popular destinations such as the coast, the countryside or the mountains. These residences are let out to holiday makers for periods ranging from a day to a month. Offer more than simply a place to stay, these residences tend to have benefits such as access to catering and laundry services, a reception desk, gym facilities, a pool etc…
By investing in a touristic residence, you are opening up the opportunity to combine profitability and fun.
Once you've bought a property from a developer, you sign a nine to eleven-year commercial lease with a management company. This company will thereafter take care of the residence for you: not only will they find tenants, but they will also tend to maintenance and collect the rent. The moment the lease is signed, the management company will start paying rent to the property owner.
The investor can even choose to stay in the residence themselves for a certain number of weeks each year. The number of weeks, and their distribution (in low, medium or peak season) will affect the net return.
The return on this kind of investment, net of running charges and excluding the Foncier tax, can reach up to 4.5%. This investment furthermore allows you to benefit from taxation advantages. Additionally, you can benefit from a VAT reimbursement of up to 20% of the total sum of the investment.
Attention : to benefit from this, the owner needs to keep their property for 20 years, or sell it after 9 years with a continuity of the commercial lease.
Choose in complete confidence
The guaranteed returns, the chance to stay there yourself, as well as the taxation advantages are indeed big draws for this kind of investment. Don’t forget that location is one of the most important success factors of real estate investment: a well situated property assures a high rate of occupancy and facilitates its future resale. It is of equal high importance to carefully choose the right property management company. After all, it is them who will be sending the rent. To avoid nasty surprises, experts recommend sticking with well-known names that have been well established in their sector for a long period of time.
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