This luxurious two-bedroom/two-bath Riviera apartment is in the heart of the Carré d'Or district of Nice, just behind the Meridien Hotel on rue Masséna near Place Masséna and the new Promenade de Paillon...has been a successful rental apartment on Parler Nice Apartments and is NOW HOT ON THE MARKET!
This property is for the right person or family who wishes to make Nice their home. Located on the third floor of a Niçois bourgeois building, sharing the same entry as "Le Matisse," south facing for lots of light all day long. It has everything anyone would wish for: large living room/dining room/kitchen, two spacious bedrooms (one with its own balcony), two full bathrooms (one with large tub, the other with large shower), fully equipped and decorated by mosaic artist Véronique Husson and Interior Designer Martine di Mattéo. In perfect condition, ready to move in!
Tomorrow I will be signing the "Promesse de Vente" (pre-sale agreement) on the sale of my first investment property in Paris known as "Le Provençal" ...and next Friday the signing will take place on my second investment property, "La Paris Plage" and "Le Parisol."
Both were discovered by the City of Paris "Direction du Logement et de l'Habitat" for their short-term rentals. In my case, the neighbors are not at fault for denouncement, but I was simply too visible to the authorities. Fortunately, this is not true for most owners or most properties.
You may have read last October when an inspector from the Préfecture de Police came knocking at my door, unannounced and without asking for entry at the locked stairwell door? (See the French Property Insider article) experience made to feel like a criminal for having taken a lot of effort and money to invest in these properties, to have contributed to the local economy and the happiness of hundres of visitors to Paris.
I knew then to expect the fateful letter from the city accusing me of renting property short-term. The letter gives the owner three months within which the property must be "regularisé" (resolved). No fines are imposed by the city until the owner can prove his innocence.
There were several alternatives at that point:
1) Compliance with the change of usage of the property which is absolutely impossible to achieve for anyone (I promise you, the laws actually make it impossible); 2) Offer both apartments for long-term rental at greatly reduced rental rates, rendering each of them at an operating loss; 3) Stop advertising them for rental, yet allow 'friends' and 'relatives' to use them at the cost of 'reimbursement of expenses' in the hopes of covering operating costs or 3) Sell them.
This is the worst time to sell a property, but the best time to buy a property. Property prices are at a low, there are a lot of properties on the market, the rate of exchange (strong dollar vs weak euro) is favorable for American buyers and interest rates on mortgages are at an all time low. As an investor I lose potential revenues while the buyer wins...but selling them seemed like the best solution in order to move on and make better investments for the future...perhaps in other cities, in other kinds of property.
I will tell you that this was very difficult to accept, emotionally.
Le Provençal The Viager with a ViewLa Paris PlageTile work in La Paris PlageLe Parisol
Le Provençal was my first 'baby' -- and was the beginning of our short-term rental business. Only 16.5m2, it made hundreds of guests happy and generated more income per square meter than any of our other apartments. An apartment of this size for long-term living is not fit for many -- mostly students who cannot pay more than about 600€ to 800€ per month, while it was generating about 1,000€ per week as a luxury rental. The operating costs were about 1,250€ a month (including a mortgage), so unless a long-term renter was willing to pay a premium for such a small apartment, ownership wasn't worth it.
For those who have read the saga of ownership to completion of La Paris Plage and Le Parisol (The Story of a Viager) -- a "viager" (life annuity property) that took two years to purchase, two years to gain the rights of usage and one year to renovate to perfection -- you must have an inkling of how difficult it is to let go of a property such as this. It was always intended as my retirement home, as it has an elevator (my primary residence has 70 steps), air-conditioning, skylight and large terrace, a rare find in the City of Light.
It's only a bit larger than Le Provençal (22m2), but the terrace and the extra bedroom down the hall (once a "chambre de bonne"), make it the perfect "pied-à-terre" for one or two with an extra space for guests or for use as an office. No expense was spared on the renovation, and like Le Provençal, I employed mosaic artist Véronique Husson to decorate it as if it were like jewels on rich tapestry and Interior Architect Martine di Mattéo to add the finishing designer fabrics and touches.
With tears in my eyes, I cursed the city officials and both were placed on the market. Both sold virtually immediately...for all the obvious reasons. One will be an American's secondary property for 'friends' and 'relatives' at the cost of 'reimbursement of expenses' in the hopes of covering operating costs and the other a permanent home for an American moving to France.
The city got what they wanted for at least one of the apartments -- the one that would have been my own retirement home. So, while the rental laws make no sense whatsoever in the global scheme of things -- constitutionally, rightfully or economically -- they do achieve the city's goal to find permanent housing for its residents, even if the resident is a foreigner.
When the final deeds are signed, and the mortgages paid off, there is the burden of the capital gains tax now at its all time highest. As a resident of France, the additional 15.5% will be imposed and the return on my investment will suffer even more.
This personal property tale is not designed to discourage the would-be investor. Stepping back and looking at the investments, the overall yield has been "formidable" and here's why:
* My personal apartment has increased in value four times from the purchase in the year 2000 on which no capital gains tax will be paid when it's sold because it is a primary residence;
* It's own appreciation and appreciation of these two properties provided the equity with which I borrowed money to purchase other investment properties (Nice and New York), so other than the costs to renovate them, there was no additional investment made to own five properties;
* The rental revenues (until now) of three properties, covered the mortgages of five properties;
* The sale allows for the repayment of the mortgages reducing my mortgage obligations, the payment of the tax (even if high) and still generate a decent profit -- one of the properties is selling for double the initial cost and the other is selling for three times the initial cost.
So, while I am very sad to say 'so-long' to both my 'babies,' I don't have too much to complain about in regard to the return on my investment.
I'll say it again: This is the best time to buy a property. Property prices are at a low, there are a lot of properties on the market, the rate of exchange (strong dollar vs weak euro) is favorable for American buyers and interest rates on mortgages are at an all time low.
The rental laws can be managed or are likely to be amended, the capital gains tax laws are sure to change (again) to boost a sagging market and while prices are down, they are sure to rise in the city that can't go up and can't go out. Buy smart, manage it right and you will win, as long as you're in it for the long term and not the short term!
P.S. We need a lot more signatures before we send our petition "Mayor Anne Hidalgo, Paris France: Amend the Paris short-term rental laws and make them fair for all" to Madame le Maire Anne Hidalgo! Do not be afraid of putting your name on this petition -- it will not lead to the city finding your short-term rental apartment! But we need everyone and anyone to support the cause. Sign up at avaaz.org/en/petition/ and send it to all your friends and media contacts to get the word out! Many thanks, Adrian
P.P.S. Did you know that many Parler Paris Apartments have been featured on House Hunters International? You can stay in one of the gorgeous apartments appearing in this popular show! Visit Parler Paris Apartments today and look for the House Hunters International logo..
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