Building Your Property Portfolio
Central Paris — Google Earth
June 25, 2009
Bonjour French Property Insider Subscriber,
The weather has turned warm and summer is finally upon us here in Paris. The long days and mild weather have brought everyone out into the streets, the tourists into the city and the rental apartments are filled to the brim.
June has been a great month in Paris for a lot of special activities — this past Fête de la Musique was just as fun as ever and coming up this weekend is the Gay Pride Parade, a never ending barrel of laughs and surprises. It’s no wonder tourism has been so strong, in spite of the economy.
In today’s issue of FPI, we have a few different themes — first a look at how to build a successful property portfolio by funding your investments using equity release loans to purchase in central Paris where rental revenues and appreciation are non-risk. Following this model is the road to a healthy return on investment as well as having the pleasure of usage of your properties.
Some have been selling rather than buying properties — considering the current rate of exchange as a way to take advantage of the weak dollar and British sterling. Learn more about what both Americans and the British are doing with their French properties.
Some are finding bargains in auction properties — but it’s not an easy road to travel and there are a few upcoming trade fairs you might want to consider attending this coming year.
All this is in today’s French Property Insider along with Hot Properties in central Paris worth a gander for their potential rental value.
Editor, French Property Insider
Email: [email protected]
P.S. Parler Paris Apartments have availabilities in the month of August at the lowest annual rates. Be sure to visit http://www.adrianleeds.com/parlerparis/apartments and make your plans now to visit the City of Light at the best deal of the whole year!
Volume VII, Issue 26, June 25, 2009
In this issue:
* How to Use Equity and "OPM"
* FPI Fractional Property Offerings
* Announcing: Fall Property Exhibitions
* Get 1 Hour of Consultation FREE
* Currency Online Exchange Service
* Brits Big on France and Each Other: Two Looks
* Parler Paris Apartments: Le Déco
* Former Piaf Home on the Market
* Hot Property Picks: Ripe for Central Rental
* Lifestyle: Buying an Auction Property
* Lineup for the Next Property Auction
* How You Can Obtain a Mortgage in France
* Parler Paris Après-Midi: Exceptional Day in July
* Managing Your FPI Subscription
* Subscribers Receive Discount on Insider Paris Guides
I started with one lone property. The timing was good and each year it increased in value, so much so that within less than 10 years, it more than tripled in value. With the equity built, I took another loan in order to buy another investment property. It generates enough rental revenues to easily cover the mortgage. Then I took another equity release mortgage to buy a third revenue-generating property, and another to buy a fourth. Within eight years, an initial investment of less than $45,000 grew into four properties appraised at more than $2 million today…all by leveraging the appreciated values of the properties in order to take equity release loans.
Not every property market can boast of such substantial appreciation, but Paris is special. Paris is one of those magical spots on the face of the planet that is protected by its residents to withstand the test of time — old buildings cannot be razed or changed without permission of the state, new buildings must be approved prior to construction and the height of buildings is limited.
Therefore, Paris cannot build up or out very easily, putting a limit on the very number of residential properties. Older properties in Paris are well respec
ted and rather
than lose value with age, gain value for their maturity and intrinsic value. Central Paris has become more and more desirable to an international investor — as rental rates in central Paris continue to climb along with rental occupancy rates.
It’s a simple question of supply and demand. The demand for good properties in central Paris (districts 1 through 8) continues to increase, while supply remains stable, therefore prices continue to increase and availability continues to decrease.
The short term vacation rental market is the most lucrative. Apartments of all sizes rent well in central Paris and most specifically in the Marais (3rd and 4th), the Latin Quarter (5th), Saint-Germain-des-Prés (6th) and Eiffel Tower (7th). Finding quality properties in these districts is rare and prices are on the rise, while other parts of the city have seen a downturn.
In the most recent Notaire price reports for the first quarter of 2009, the districts which rose in value were the 1st (1.8%), 2nd (5.7%), 3rd (4.2%), 4th (2%), 6th (2.1%), 7th (4.2%) and the 12th (.4%). All others remained stable at zero growth or reduced in value up to -4.9% (5th).
LaCoteImmo.com offers an up-to-date price service online, based on the sales registered by the Chambre de Notaires. As of June 15th, the figures looked a bit different for the key districts:
|District||1st Quarter Reported||LaCoteImmo.com Sales as of 15 June|
If you purchase a property in central Paris, you reduce your investment risk with the confidence that it will appreciate well and generate good rental revenues. These are the properties that will eventually afford you the ability to take an "equity release" loan in order to purchase more like properties.
This is the route to a successful property portfolio. One property propagates into two, and then three and then more revenue generating properties that continue to increase in value and continue to provide additional equity release funds, all while paying the mortgages with "OPM" — "Other People’s Money."
Some of the lending banks we work with are now offering equity release loans. Banque Patrimoine et Immobilier (BPI) will makes equity release mortgages possible on holiday homes and buy-to-lets. The maximum loan to value they will provide is 70% and is subject to an appraisal
instructed by BPI.
Crédit Foncier will provide 50% loan to value on a main residence when the purpose of the entire mortgage is to increase one’s global assets, and is also subject to an appraisal.
From experience, I can tell you that proof of substantial rental revenues from an existing property goes a long way when the ‘committee’ de terming your borrowing risk is reviewing your application! And therefore getting your equity release loan is relatively simple!
Property in central Paris is a non-risk investment. You can virtually guarantee appreciation and revenues, if not absolute enjoyment! Build your portfolio the smart way…with OPM — Other People’s Money.
If you are interested in traditional fractional ownership properties currently offered by our Fractional Ownership partners, see below:
LE PALACE DES VOSGES
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CHEZ LA TOUR
LE PETIT TRESOR
* Exhibition of French Property Set for London *
A French property exhibition will be held in London in September, publisher Archant has said.
Run by lifestyle magazine Archant Life France, the event will take place from September 11th to 13th at Olympia, with the company stating that the recent exhibition held in Harrogate revealed widespread optimism about the French market.
Buying the right property in France could reap dividends over the next few years, French property law specialist at solicitors Furley Page Sarah Bogard said this week. She stated that the country is a buyers’ market and is offering falling prices.
* Luxury Real Estate Trade Fair Loves Paris in the Autumn *
Not everyone can afford a private island or a fancy penthouse on New York’s Upper East Side. Still, for those who can, an invitation to the Luxury Real Estate Trade Fair will be just the thing to make the autumn seem brighter. And where better to promote high-end property than Paris, the world capital of chic? This elegant ambience will be further enhanced by the venue, Paris’s famous Musée du Louvre.
On the 27th, 28th and 29th of November 2009 Prestige-Paris will celebrate its third birthday with the assistance of France Convention, a specialist in niche and luxury trade fairs. This year’s gathering will be required both to meet the visitors’ very demanding expectations and outdo last year’s exceptionally successful event.
The recent recession has failed to affect the luxury sector as much as the rest of the economy, in fact the latest figures have revealed that the Parisian real estate market has improved. It seems that the most beautiful and luxurious homes never fail to find a buyer, a thought that will encourage participants in this most prestigious property exhibition.
If you are a guest staying in any one of our luxurious Parler Paris Apartments, and would like to consider having your own "pied-à-terre" for your pleasure and profit, contact Adrian Leeds for a FREE one-hour consultation while you’re enjoying the apartment in the City of Light. Visit http://www.adrianleeds.com/parlerparis/apartments for more information or email me at [email protected].
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The strength of the euro against sterling is working in favour of British people selling up in France.
Mike Lewis, his wife Anne and son Paul bought their 16th-century French farmhouse nearly four years ago. Le Luot lies in a sleepy village in the le Manche region of Normandy, a place of cider orchards and half-timbered houses where life is delightfully slow and the Calvados sublime.
"We took it as a project to enjoy. We went over and bought it on the spot. It was perfect," Mike says.
But now they are among the many Anglais who are selling. The French throw up their hands in despair, complaining first that we arrive en masse to occupy the derelict old barns and farmhouses, then about-face and leave in droves because of the economic downturn. It isn’t quite as simple as that. Although it might seem odd to be selling in the teeth of the recession, the English are gambling on changing world fortunes, and the strength of the euro against sterling is working in their favour.
"Prices in France have slipped but the euro has gone up," says Mike.
In fact the price of his house, which is £450,000 (€530,000), fluctuates as exchange rates move. "It has gone up by £140,000 only because the euro is now so strong. It can change by £20,000 in just two days. At the moment the euro is going our way, which is bad for the English buyer but good for the English selling."
In the past four years, Mike and Anne have turned Le Luot into an Englishman’s ideal residence. They have added four bathrooms to the five bedrooms and created a games room, a gym, a huge living room, marble floors, a bar, indoor barbecue and pizza oven. Three barns on the 10 acres have planning permission for conversion into houses and there is approval for a lake…
To read the entire article go to http://www.telegraph.co.uk/property/5569242/French-property-time-of-cash-in-on-the-euro.html.
An estate agency has said that many Britons are selling up their properties in France – but other UK buyers are the main customers.
The Daily Telegraph reported that the high value of the euro and the gains this offers for sellers mean it is a good time for some to cash in, while others want to move back for lifestyle reasons.
However, the bulk of customers at estate agency Winkworth are Britons, the paper noted.
To read the entire article go to http://www.propertyshowrooms.com/france/property/news/britons-selling-french-properties-each-other_193417.html.
Parler Paris Apartments Welcome to your home in Paris. Home is how you will feel in a private apartment in Paris that has the "seal of approval" from Parler Paris Apartments and me, Adrian Leeds. Parler Paris Apartments offers high quality accommodations to make your stay in the City of Light as enjoyable and memorable as possible.
We at Parler Paris know each and every apartment owner or manager personally, and stand behind the quality of those we represent. We understand your needs and desires, all the small details that make a rental apartment a warm and welcoming home and a much better alternative to an impersonal hotel!Parler Paris Apartments is administered and serviced by the same great team as Parler Paris, French Property Insider and French Property Consultation. You can trust that Parler Paris Apartments and all those with whom it is associated will do heir best for your 100% guaranteed satisfaction.
SPOTLIGHT APARTMENT(S): Le Déco
Rue Saint-Sébastien, 11th Arrondissement
1-Bedroom, Sleeps Up to 4
From the quiet, residential rue Saint-Sébastien, walk up a mere dozen steps into this beautiful, newly renovated one-bedroom apartment. Le Déco’s stylish and comfortable interior combines contemporary design with Art Deco flourishes, while retaining elements of its 19th-century French heritage in its original wood beamed ceiling and marble fireplace. Its three large French windows with wrought iron railings provide a pleasant view of the rue Saint-Sébastien neighborhood.
It was meant to be a year in Provence but Rupert and Sophie Scott have been in the south of France for six summers.
"We decided to take a year off and came out here. But we started to have such a nice time that we decided to stay," says Rupert. They bought a large stone bastide in the "hinterland" behind Nice and Cannes and sent their three children Charlie, 13, Edward, 12, and Louisa, 8, to the international school at Mougins. But the French dream is coming to an end; the family is moving back to Britain in time for Charlie to start Millfield School in the autumn.
The Scotts are part of a constant cycle of British families moving to France for an extended period, before returning home for schools or work. "They move to France when their children are young and impressionable, so they can learn the language and the culture," says Charles Weston-Baker of Savills. "After five or six years, they usually return to Britain…"
If you’re moving to France, according t
k, it’s imperative to buy the right kind of house. A year-round house is very different from a holiday home; it needs to be within easy reach of larger towns with international schools, and proper – not tourist – shops. The Scott’s house, formerly owned by Edith Piaf and named Les Parretts, has six acres of garden and is 20 minutes from Nice and Cannes…
The legendary French singer fell in love with the house and bought it in the Fifties. She would play records in the garden and dance on a stone terrace in the moonlight.
"She moved from Paris to Mougins but it wasn’t peaceful enough for her," says Rupert. "So she bought this, and remained here until she died in 1963, in the smallest bedroom in the house."
By the time the Scotts moved in, Piaf’s treasured garden was overgrown but it hadn’t lost its charm. "It’s like a secret, green oasis, surrounded by woodland," says Rupert. "There were two tennis courts, so we got rid of one and planted trees and shrubs so there are plenty of places to sit in the shade." They’ve revamped the pool, built a summer kitchen and restored the guest annexe and gym. The children have a trampoline on the lawn and there’s a wrought-iron gazebo on the terrace by the pool for al fresco lunches in the garden…
To read the entire article go to http://www.telegraph.co.uk/property/5577602/French-property-Edith-Piafs-home-for-sale.html.
Editor’s Note: Les Parretts is on the market for £7.171 million (€8.5m).
Each week French Property Insider features a range of properties which we believe are on the market at the time of writing. These properties are featured in order to give readers a sample of what is currently available and a working example of prices being asked in various regions of France and districts of Paris.
As we are not a real estate agency. These properties do not constitute a sales listing. For those readers seriously interested in finding property in Paris or France, you can retain our services to do the whole thing for you. For more information, visit http://www.adrianleeds.com/frenchproperty/consultation
This week our focus is on properties in the central arrondissements of Paris, where properties for short-term rental are most in demand.
***Paris, 4th: Studio, approx. 22m²
Located in the heart of the Jewish quarter of the Marais, this charming studio is a perfect rental investment. Situated on the first floor of a period building, the apartment is bright, sunny and quiet. There is a living area, open kitchen and bathroom. The original details, including exposed stone and beams add to the charm. Near plenty of shops, restaurants, cafés and museums, including the Picasso Museum and the Pompidou Center. Fully renovated.
Asking Price: € 225 000 + 2.5% Finder’s Fee
***Paris, 3rd: 1-Bedroom, approx. 43m²
Charming one bedroom located in the Marais on a small, quiet street. The apartment is located on the first floor and has been renovated in a style that preserves the details of its period. There is a spacious living room with exposed beams and open fully-equipped kitchen, a powder room, a bathroom with bathtub, and a bedroom facing a landscaped courtyard. There is also a walk in closet just off the bedroom. Perfect as a Pied a Terre or rental investment.
Asking Price: € 350 000 + 2.5% Finder’s Fee
***Paris, 2nd: 2-Bedrooms approx. 73m²
Three-room apartment in a well-maintained building ideally located in a very quiet street in the heart of Paris. Near the Montorgueil district. This apartment has been completely renovated and comprises a large living room similar to a loft design. There is a modern kitchen partially open to the living room. There are two generously-sized bedrooms and a large renovated bathroom. A newly renovated apartment, in a sought-after district, at an attractive price.
Asking Price: € 470 000 + 2.5% Finder’s Fee
***Paris, 6th: 1-Bedroom, approx. 50²
On the corner of Boulevard Saint-Germain and Rue du Dragon, the privilege begins with the address. Nestled within this beautifully restored residence, the splendid apartment boasts chic, charms and originality. In A small, very private building for the select few (12 apartments). In a Haussmann-style building, painstaking restoration is what has enabled this fine complex to regain its typically Parisian cachet with its tall windows made up of tiny square panes dating back to the 17th century. With the apartment comes a cellar, intercom, access control, videophone, elevator, individual heating.
Asking Price: € 530 600 + 2.5% Finder’s Fee
Whilst having a drink with my husband, James, and an architect friend one evening in one of the cafés in the beautiful Bastide town of Monpazier, the conversation turned towards the subject of an interesting property in the village that would be soon coming up for auction. As an ex-estate agent in France I was intrigued, and having downed our drinks, the three of us walked to the property to inspect it and try to get a peep through the window.
What we saw was certainly enough to whet our appetites, so I immediately decided to approach the local notaire the following morning to arrange a proper viewing and find out more about the property and the forthcoming auction. A few days later we were being shown around this property which had been empty for probably 15 years and was being sold as the owner had died leaving no living relatives to inherit the property. As we walked through the front door there was the familiar damp smell associated with empty houses but we could see the potential. There were original terracotta floor tiles and fantastic old beams, but the rooms had been divided up, not by our usual partition walls but instead by odd bits of wood and cardboard!
We could barely get around the property as there were so many pieces of wood that the owner must have hoarded over decades. We can only assume he was a menusiere. We gingerly climbed the staircase, avoiding the gaping holes and found two rooms with rotten floorboards throughout and then another staircase to an attic. It was once we had climbed up into the attic space that we were sold on the property. The side wall of the house was built using the old wattle and daub technique, although it was only the upright wooden beams which remained. This gave us the chance to see out across the rooftops to the glorious countryside beyond, and imagine what we could do with the attic space…
Finally the day came and it was with nervous excitement that we entered the office along with an assortment of prospective buyers: one other older English couple, a young French couple, a group of French families and a Marchant de Bien (professional property dealer). We were a little embarrassed when we saw the Marchant de Bien as he had been trying to find the property a few days earlier when James had told him he knew nothing about a property for sale, trying to eliminate any competition before the auction! We were given our number and we took a seat at the back of the room.
The whole process of “aux encheres” (auction bidding) was new to us so the procedure was explained. Basically the auctioneer, who had come from Bordeaux, had a device with a number of small candles, rather like birthday cake candles, which she would light one after the other. It had been agreed that the guide price was 14,500€ which would be the starting price with incremental bids of 500€. The first candle was lit and the auction was underway. People started bidding and as each candle burnt out another was duly lit. This process continued but the bidding slowed down. We were on the 6th candle when the bidding had stopped at our offer. At this point it was explained that another candle must be lit and allowed to burn out and that only then, provided nobody put in a counter bid, the property would be ours. We had set our own personal limit on the property at 30,000€ the evening before over a glass of wine, but we then realised that this would most likely be the same limit for other bidders and so we put our figure up to 30,500€.
We waited for what appeared to be an eternity. As the 7th candle burnt down, anxious not to make eye-contact with anybody and with both of us having our fingers crossed, we were thankful that we had decided to go up to 30,500€ as this was the final bid. Finally the candle burnt out and the property was ours. The purpose of this final candle is to allow anybody else to make a counter offer at the last minute. If another offer had been made during that time then a further candle would have had to be lit and the process repeated…
We knew that, once we had the plans sketched out, we would need to obtain planning approval which would probably have to go through the “Batiment de France” as the property lies within 100 metres of a church and in a bastide town. We had friends who had tried for months to get plans passed, resulting in several sets of plans being sent to the authorities by their architect withou
any real response. We decided that, as we hoped to start work in the autumn, it would be better to simply call the planners and make an appointment for someone in their office to visit the property. We were thrilled to get an appointment arranged for the following week and when we met Monsieur Gondrand it was so refreshing to find somebody as excited by the project as we were…
To read the entire story go to http://www.frenchentree.com/france-lot-quercy-property/DisplayArticle.asp?ID=39827.
Notaires de Paris
Place du Châtelet
12 avenue Victoria
Additional information on Les Ventes aux Enchères des Notaires can be found on the Web site at www.encheres-Paris.com. Though the site has a button for an English version, it isn’t necessarily reliable.
To read Schuyler Hoffman’s article about the property auctions in Paris, click on:
|On July 7, 2009 the following properties will be auctioned off:|
Editor’s Note: If you look at the properties on the Notaire’s site (www.encheres-paris.com), when you click on the information for a particular property there is also a link to Google Maps to show you exactly where the property is located.
When you make a purchase as important as a piece of real estate in a foreign country, you ant to know that you can trust the people you are dealing with. Adrian Leeds has developed a network of professionals that meet only the highest of standards. With the expertise and experience of Adrian and her team, you can depend on getting the best advice and support to feel completely confident that you are making an informed investment decision.
HELPFUL CONVERSIONS FOR REAL ESTATE
1 square meter = 10.7639104 square feet
1 hectare = 2.4710538 acres
For more conversions, refer to: www.onlineconversion.com/
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The second Tuesday of every month, Parler Paris and French Property Insider readers gather at La Pierre du Marais for a drink and a "schmooze" –It’s an opportunity to meet and chat with other like-minded people and a great way to make friends! Costs nothing except your drinks. Don’t miss the next gathering, Tuesday, July 7th, 2009 from 3 to 5 p.m. (Exceptional due to Bastille Day on July 14th) and every second Tuesday of the month (except August).
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