French Property Insider Volume XV, Issue 7 Thursday, February 16, 2017 • Paris, France
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For Rent: The Witches' House -- On Rue Tatin!
Featured on HGTV's House Hunters International show, this is a very special Normandy house like no other, just about 100 kilometers (62 miles) north of Paris in Louviers, you, have the very special opportunity of renting On Rue Tatin for six months: from November of 2017 through April 2018! On Rue Tatin is a four story house, but unlike any you’ve ever seen for the staircases go this way and that -- a labyrinth taking you into small worlds of comfort. There is about 350 square meters of living space (3,800 square feet) with 14 rooms on three levels. You can choose among the five bedrooms to have one that is light infused, one that looks right out at the church, two that feel as though they are perched among the clouds, and another which feels like the finest hideaway imaginable. There are two full bathrooms plus a powder room and two offices.When you want to explore, all of France is yours. The Norman coast is a day trip, and the Loire Valley, Champagne, the north...are just a quick drive away. Travel from Paris is as easy as a train from Gare St. Lazare to Val de Reuil and then a bus or taxi to Louviers -- just 1.5 hours from central Paris. Make On Rue Tatin YOURS for six months this coming year. Make your dream to have a home in France come true...and experience "La France Profonde"...in the luxury of history and charm. Here's the good news: * 3,950€ per month, payable as follows:
-- First and last month + one month security deposit to secure your stay... -- Remaining balance at the 1st of the month, each month -- + Utilities, estimated at 340€ per month for electricity and gas -- + Payment of One-half year of Taxe d'Habitation, estimated at 1,250€ For more information.
If you've only done business in the U.S. currency of "dollars," then be prepared for a new education when you start doing business in another currency, such as the euro. When you've traveled outside of the U.S., then you likely had to exchange your greenbacks for whatever currency is used where you were traveling, and did that at a bank or currency exchange outlet located in airports and center cities. But, those were small potatoes compared to making a property purchase in hundreds of thousands of dollars where the rate of exchange can make a huge difference.
I find that generally Americans are a bit naive about currency exchange as a result of their lack of experience -- the kind that Europeans had on a daily basis when traveling between countries, having to convert to France's franc, Italy's lira or England's sterling, etc., etc. Prior to the advent of the Euro, the common currency of the E.U., they must have kept a wallet for each one of them and spent most of their times calculating the differences.
Known as the FX, the foreign exchange market "is a global decentralized market for the trading of currencies." (Wikipedia.org) Understanding how the FX works is an education into itself and those who speculate in the profits made simply by converting currencies must be very well versed in order to be successful. It's a risky game because the factors that contribute to the fluctuations in the rates, that take place in the milliseconds, vary greatly and are totally uncontrollable.
Banks and brokers make big money from exchanging currency. Banks will often charge a fee on each transaction as well as adding a "margin" or "spread" -- the difference between the buy rate and sell rate. So, beware of a bank that claims to not charge a fee -- you can bet they're making up for that in the margin.
A single rate quoted is normally the "mid-market" rate -- half-way between the sell rate and the buy rate. For example, if the EUR/USD rate is quoted at 1.50 ($1.50 to €1), then the Banks will buy Euros from each other for slightly more than $1.50 and buy US Dollars for slightly less than $1.50.
The "wholesale" rates are only available to large financial institutions who conduct a high volume of FX transactions. As an individual customer buying the same currencies, you are more likely to get rates like these:
Mid-market rate = 1.5000 USD/EUR Customer can buy EUR = 1.5400 USD/EUR Customer can buy USD = 1.4600 USD/EUR
These are bank-to-bank transfers and the margin is higher for smaller transactions. The difference is what the bank profits and in this case, it's a whopping 4%. That is not all that unusual for commercial banks, who aren't as much in the business of currency exchange, but happily do it. Outlets in the airports and in tourist spots are likely even higher, up to 10%. A broker specializing in the trade will save you huge amounts of money as their margin is normally about 1%.
For small amounts when traveling, just getting cash from your home account using an ATM machine to extract cash in the new currency using a debit card is your best bet for reducing the rate of exchange. But there are normally limits to how much you can take in any one day...determined by your bank or the distributor.
For large amounts, such as when purchasing a property and many thousands of euros must be transferred from dollars or other currency. Just imagine, you're purchasing a one-bedroom apartment in Paris and the cost is €500,000. Your bank transfers the funds and the spread is 3%, but they don't tell you this -- they just give you the rate: $1.10 = €1.00, therefore your €500,000 cost you €550,000!
If you were to work with any one of our brokers, who work with reselling their wholesale rate, and generally work with a spread of 1%, your rate of exchange would have been $1.08 = €1.00. Instead your transfer would have cost you $540,000. That's a savings of $10,000, just by using a specialist instead of your commercial bank!
Making the transfer is easy. First you set up an account with a currency broker you like and trust (we recommend three in particular). Then, rather than instructing your bank to transfer the money from your account directly to your Notaire or your French bank account, you have your bank transfer the funds to your currency broker and then you instruct the broker to transfer it to your Notaire or your French bank account. It's one step more, like changing planes to arrive at the same destination, but your ticket cost less because of the transfer! Let's face it, there is no reason to spend your hard-earned money with the bank if the result is the same!
The brokers offer a wide range of additional services, too. There are "One-off payments," "Regular payment plans" and "Rate Targeting" -- as well as "Buy Forwards." These are excellent ways of taking the risk out of the exchange, by locking in a rate when it suits you.
To learn more about currency exchange and the brokers we trust and recommend, and to ask them all the questions you might have, visit our Currency Exchange page and be sure to tell them that Adrian sent you.
P.S. I'll be in Los Angeles next week and available for personal two-hour consultations between February 20th and 24th. The cost is $330, but the fee applies toward our search services, so not a penny is lost! If you are thinking of making an investment in France, you are sure to find the time with me very valuable. To schedule your meeting with me, email me at firstname.lastname@example.org
ADRIAN LEEDS GROUP APARTMENTS
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