Hello all,
Grateful for your opinions and a bit surprised that this question was not raised before, that makes me think it is perhaps not such a great idea but where is the catch then.
I am looking into taking a loan and buying a studio in Annemasse (approx. EUR 100,000) as an investment/not for living - I would still prefer to be based in Geneva where I work for now.
I know Annemasse is not the nicest place on Earth but it seems to me it is not a terrible place for a small investment into a studio. The ratio between the cost of the flat and the potential rent price seems better than for a bigger apartment.
I have never lived there but I have a feeling it is developing, the real estate market is kind of alive and renting a studio out will be probably not too difficult. With the Leman Express that should be starting soon, it could be even easier. The prices for real estate are very much OK comparing to Geneva.
Again I am not planning to live there; or if I do, not for a long term I assume. I might even leave Geneva/Switzerland, but keep the apartment renting it out to have the loan paid in 7-10 years.
Would particularly love to hear from anyone who has done something similar or invested into a small property not necessarily in Annemasse but in this region.
Thank you.
Property in France is rarely a good investment, buying costs are close to 10% in that price range & selling costs are only a little less.
If you do make a profit CGT & Social taxes run for the first 27 years. When I bought in 1999 in Chamonix then only CGT was payable for the first 15 years with no additional social coast. The rules can change & do change with no grandfathering. Non EU residents pay at a higher rate, not sure if that includes CH,
There's been a construction boom in the area with a lot of buildings going up of late and many are of poor quality so check what you are buying first.
Annemasse has growth potential because of the Leman Express and also the tram but there's a lot of studios there already, ie competition for you as a landlord and also if you need to sell too will a studio sell quickly?
Also remember the tenant enjoys strong rights, eg you'll find it difficult to eject them even if they don't pay their rent. There's landlord's insurance for this which is worth investigating if you have a mortgage to meet. Intuitively it could be more useful for a studio which tends to attract transient tenants compared to a family house located near a good school. Also one trick for French tenants is not to pay the final two month's rent, equivalent to the deposit.
So price in insurance, voids etc and see if the numbers stack up.
Yes looks like a nice place
As others have said, investing in real estate in France is rarely a good investment. Really look at the French tax system, according to friends this is a real killer and makes their property in France very expensive. Look at also the rules and tax on transfer and sale, plus general French taxation, insurance, and I think you may have a very different outcome.
As others have said, rules for eviction and tenants rights are much different. Most everyone I knew who rented also had their property trashed by tenants requiring huge investments to restore.
And further, Annemasse, ugh, you are likely to only get low end of the spectrum so to speak.
Ive gone for it in St Louis over the Basel border, and (touch wood) so far pretty happy with it.
The banks give very attractive interest rates and need very little in return.
I have 1.5% fixed for 20 years. Had to pay all the charges and a 10% deposit with a loan for the rest. It does amount to about 30%, so about 20% in charges. But thats still really cheap compared to the UK by my numbers.
I get 20% more in rent than my mortgage costs each month.
Now ok, there is tax founcier, you will have to pay this. on top the French tax is also quite high, about 25% of 70% of the rental income.
In rough numbers and semi optimistic i will have forked out about 70k and have a property at 120k, on top of which it generates a monthly income.
Compare it to a UK annuity costing a 100k and paying out 5k a year, the income is roughly the same, but nothing to pass on to dependents with an annuity, where as the property has cost less, and you still have something to pass on.
And still with all the negativity you will hear on here and everyone telling of better investments, its still not a huge sum of money over the time. Its manageable. You wont be rich or be able to retire on it but it is a small contribution to your pension pot which should be a relatively stable and safe one compared to others.
So the net yield is 1.8%, I would run as fast as I could from that.
Yes the net yield is about that. While a mortgage exists on it.
So each year you get 2% net yield, and increase in capitol every month, and an eventual 10% yield
In 20 years you'll make about 50k on a 70k investment and be generating 10% yield, est 7.5% net yield, while holding a 120k asset
Perhaps some clever folks on here can turn a bigger profit from their investment, but I am happy with it
Why not in Annecy and rent it out to tourists?