To Rent or to Buy in France? Or both? And How it Saves You Money!

Picture it. You’ve decided to pack up the life you know and move to France. (Smart move.) The wine, the cheese, the pastries, the architecture, and particularly the lifestyle is calling your name (and has been for a long time). But you might not be sure where to hang your beret or whether you should go for broke and buy a property or rent, or rent first, then buy! It’s all such a big cloud over your head.

We discuss this almost daily during our consultations. There are pros and cons to each scenario, but without a doubt, purchasing property and owning a real asset that increases in value over time is always a smarter financial move…but it lacks the freedom of renting.

Let’s break it all down…and then we’ll get to the good part:

RENTING IN FRANCE: THE GOOD, THE BAD, AND THE BUREAUCRATIC

The Pros:

• Flexibility: Renting lets you test-drive a neighborhood or a town before making a lifelong commitment. Love the 3rd arrondissement today, but find the Marais too touristy tomorrow? No problem—you can move without the hassle of selling.
• Lower upfront costs: No hefty Notaire fees (which can be up to 8% of the purchase price), no mortgage approvals, and no massive down payment. You pay a deposit (usually one month’s rent for unfurnished, two for furnished), and you’re in.
• Maintenance-free living: If the hot water heater explodes, it’s your landlord’s headache, not yours. (Sort of. Not all landlords will come to the rescue as fast as you need them.)

The Cons:

• Scarcity of supply: Long-term rentals in Paris and other hot spots, such as Nice, are scarce, especially furnished ones. You’ll need patience, persistence, and sometimes sheer luck. (Or to be sure, you can hire our team of professionals to find it for you.)
• French paperwork (oy vey): Landlords want proof of income, French tax returns, and almost always a guarantor (Garantme.fr). As an expat, you may not have any of this, making it tougher to secure a lease. And not all French landlords want foreign tenants!
• No equity, no stability: Each rent check disappears into your landlord’s pocket instead of building your nest egg. And yes, they can decide not to renew your lease.

BUYING IN FRANCE: THE DREAM, THE REALITY, AND THE RENOVATION

The Pros:

• Stability and security: It’s yours. No more landlord drama, no more lease renewals. You put down roots and know you’ll never be asked to vacate.
• Long-term investment: French property, particularly in Paris, has historically held its value well. Nice has exploded in the last few years, so investment in these two cities is non-risk. With low interest rates (currently between 3.1% and 3.35%) and a steady market, it’s a solid hedge. It’s also a very effective way of transferring assets to your children inheritance tax free!
• Pride of ownership: You can renovate, paint, knock down walls (within “copropriété” rules, of course), and truly make it your own.

The Cons:

• Upfront costs: Between Notaire fees, agency fees, and taxes, buying costs you up to 12% above the purchase price (if you include our fees). And don’t forget the VAT on renovations (5.5% to 20% depending on the type of work).
• Complex financing: French banks love paperwork. If you don’t have French income, the process can be labyrinthine, though not impossible with the right broker.
• Responsibility: When the hot water heater explodes, it’s your headache. And your wallet’s.

RENOVATING IN FRANCE: CUE THE ACCORDION MUSIC

If you’re brave (or smart in my opinion) enough to buy a fixer-upper, be prepared:

• Timeline reality check: That three-month renovation? Double it. At least. (Although my recent renovation came in on time in spite of being summer!)
• Budget reality check: Whatever you think it will cost, add 20–30%. Materials, labor, permits—it all adds up. (Add even more…as you decide to upgrade because you want what you want…like me.)
• The upside: You get the apartment or house of your dreams, customized to your life in France. Done right, it can also increase your property value significantly. (We have the best teams that will make your new property your palace.)

THE BOTTOM LINE

• Rent if: you want flexibility, are just testing the waters, or aren’t ready to jump into the financial commitment.
• Buy if: you’re ready to plant roots, want long-term security, and see property as both a home and an investment.
• Renovate if: you’ve got the stamina, the budget, and the patience of a saint (and a good contractor, which is no problem with our team!).

The plan most people follow is to do both: rent then buy.

One thing to consider is what you will do with the house or apartment you own in North America when you move to France? Many of our clients don’t want to give up their home until they are sure they want to stay in France. It’s normal and logical. So, it makes sense to rent in France for a period of time to test the waters. Meanwhile, the home in America is either dormant, or rented and generating a revenue, or lived in by a friend or relative. Or you’re sure, and you sell.

My crystal ball tells me you aren’t going back, anyway. The crystal ball is clear because we’ve helped thousands of North Americans realize their dreams and the ones who have returned I can count on one hand. You won’t want to go back. Trust me on this. You can tell your friends and family that it’s “just a test,” or “we’re just going for a year,” or “we just want to take sabbatical,” but once you’ve settled in, made friends, created a life and enjoyed the benefits of living in France…you won’t want to give it up.

The good news is if you sell your home before you become tax resident in France (six months a year or where you consider home), then you won’t be obligated to pay capital gains tax on the sale of the property in France. This means taking a leap of faith and selling sooner than you were thinking.

You could purchase a home in France well in advance of moving because it takes three to six months to close on a property and another few months to renovate it up to your standard. That means planning way ahead. Some of our clients do that—then take their time getting their visas and transitioning slowly into their new France home. It’s a plan that does work quite well.

This is particularly perfect for someone who knows where they want to live and what they want to own and live in. And it’s also an advantage to borrowers who qualify for a French mortgage by being under the age of 60 and still working and generating a salary…before they move to France and quit their jobs—as the lender will no longer take a risk on someone about to give up their income!

We can help people find property to either rent or purchase or both. Because so many people wish to rent before they buy, we created a special offering that makes working with us on both searches—the one for the rental and the one for the purchase—money-saving and worthwhile.

You see, it’s not easy for you, or for anyone to do either of these searches on your own. Even after we’ve found you a rental apartment and you’ve lived in it in the town you’ve come to know and love for a while, that doesn’t mean you have access to the market (without an MLS—Multiple Listing Service), have the advisors or the resources to make a purchase (possibly an expensive one!) without risk.

Working directly with the seller’s agent will not protect you. They won’t hold your hand through the entire process like we will. What we do not only gives you full access to the market, but provides a kind of insurance that you won’t make expensive mistakes buying a property that doesn’t suit you or has problems the agent didn’t point out (because he only wants to sell it and doesn’t care about you, the buyer).

Our special offering is simple: You hire us to find you a rental property and we do and you move in. Then, within two years, should you decide to make a purchase and hire us to find and secure the property, the discount we give you for that service is so great that it pays for the first search to find the rental! It’s becomes absolutely free!

It all starts with a consultation during which we help you make these important decisions. Rent? Buy? Rent, then buy? And if you stick with us, we stick with you. Living in France is already the dream. The only real mistake? Sitting on the fence and doing nothing.

Either way, we can help you find a long-term rental apartment in Paris and Nice and other cities in France, and property to purchase in France just about anywhere. For more information about our property-finding services and this special offering, visit our website. Don’t hesitate to contact us to get started!

A la prochaine…