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Post by GitteK on Jul 28, 2007 9:57:06 GMT -5
(I wasn't really sure where to post this) Let us get one question out of the way, in case anyone wondered..... NO, I do NOT have the sufficient capital to buy an apartment right now, but I have a plan that the inheritance that will some day fall after my mother (May that day come late, as I do love my mother very much) - shall go into a Paris apartment. As many others in this forum also dream about their own apartment, I thought we might start pooling all our questions and knowledge (Luc and Truffaut - and other residents ? kasthor ?). 1. Financing The financing (in my case) would depend on the apt. being rented out to tourists most of the year, until I become an old merry widow and can move to Paris permanently. For how many weeks per year can one count on having tenants ? Luc ? Truffaut ? 2. The buying process Did you hire an agency to find a selection of apts for you, according to your demands ? I found this agency, for instance, but I don't know if they are any good. I mean, you cannot travel to Paris 2-3 times per month to look at apts - or is that in fact necessary ? I have looked at several really attractive apts. on the internet - so I wondered what one should do as the next step ? just call the agency ? The owner ? How did you find your apt. ? www.advizhome.com/en/index.php3. What kind of overall expenses would come, in addition to the mortgage ? Insurance, of course, and the shared expenses for all the owners (garbage man, rat exterminator, sewers...) - but are there "real estate taxes" or other taxes that you pay in France, as an owner ? 4. Using a holiday apt.-agency or not ? I know that you, Truffaut, runs your own renting - but would you (or any others ?) know what kind of fees such agencies would charge and deduct from the rent, before paying it to you ? And would you have to sign a long term contract with them - meaning, a contract that cannot be cancelled for several years ?? 5. I am looking at small 2-room apts. (30-40 m2) and they can be had for 200,000-300,000 euros - but of course not smack on Ile St. Louis. I suppose there are a lot of extra costs connected to the buying: to the real estate agent, the public notary, fee/tax ? for getting the mortgage, etc. How much extra should one calculate for these costs ? 6. Can anyone recommend interesting real estate webistes ?? AnnetteCinca - you started the thread about real estate ad words - where have your been looking for apts ? 7. This is a question that goes to all of you. What gives a holiday apt. that special value, which makes you choose it, over other apts ? I have been thinking about what I should look for - to make it appeal to tourists: - 2 separate rooms (bedroom and livingroom), so that 4 persons can sleep in the apt. + 1 baby in babybed - elevator is a must, if anything above 2nd floor - quartier with local atmosphere (like in the 17th or 9th), but not TOO colourful or ethnic, as that will scare off the Americans - a terrace would be fantastic !! - view of E.T. or other monument is a major selling point ? - location not too far out. So no Porte de Bagnolet or Porte de Choisy, even if cheaper. Even the north side of Montmartre (which I love) is maybe too far out ?? - no modern skyscraper or "grey 60ties concrete building". Tourists love old "quaint" houses ? - 10th arr. is totally no-no ? Too bad reputation in the American guidebooks ? - what else ? These 2 I find really attractive. What do you think ? sale.lodgis.com/fr/paris/description/2067420-rue-notre-dame-des-champs-atelier-d-artiste/sale.lodgis.com/fr/paris/description/2030010-rue-au-maire-appartement/
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Post by Anne on Jul 28, 2007 10:49:49 GMT -5
Although I am by no mean knowledgeable on the Paris real estate market, I may be able to help you on some of your questions : 3/ There are two real estate taxes in France : taxe d'habitation and taxe foncière . Both are based on the "value" of the flat . This value depends on the size of the flat and the quality of the building and of the neighbourhood . But these values have been established long ago and and are sometimes quite illogical . But as a result, taxes can vary tremendously from one flat to another, and they can be quite high . This is an information that the estate agent must be able to supply if you ask . As far as other expenses are concerned, I wrote on Annette's thread about buying a flat in Paris that having a living-in warden would definetly be a plus for an owner living far away . Of course it would increase the overall expenses, but you could make arrangements with this person to check on the flat, maybe do some cleaning and also take care of repairs (like dealing with the plumber if the hot water ballon breaks ... ) . Of course you would have to pay him/her extra, but I guess that it would be much cheaper than having all that done through an agency, and such a living-in person may be much more reliable . 5/ Real estate agent fees are most of the time already included in the published price ("agence inclus", as it is the case for the two appts that you have already selected) . This is mostly meant to prevent you from screaming at their scandalous fees . Notary fees and taxes are all summed up in France with the term "frais de notaire" . Some of them are fixed, some of them are a decreasing percentage of the value of the flat . For a 120000 euros flat, percentage would be about 7 % . Mortgages fees are 2.10 % of the value of the flat, but then there are cheaper solutions than mortgages . ( I found these figures on : www.meilleurtaux.com/savoir/guide/frais_notaire.phpif you can understand enough French)
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Post by GitteK on Jul 28, 2007 10:52:03 GMT -5
Thanks Anne !! I have saved the taxes-link - yes, I read French, pas de problème, though I would have to look up the legal and technical words.
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Post by Anne on Jul 28, 2007 11:12:35 GMT -5
Sorry, I made a mistake: mortgage fees are a percentage of the value of the LOAN of course, not of the flat . And I forgot to say that the estimated value of all the fittings (cupboards, fitted kitchen, etc ...) + of course of the furniture if you buy a furnished flat is deducted from the price which serves as a base for the calculation of the frais de notaire percentages (is that clear ? ) I quite like the flats that you selected . But the mezzanine may get uncomfortably hot to sleep on in the summer . Both flats seem to have basic electrical heating from the look of the radiators : this is not very comfortable and also it may cost you a lot more over the years than central heating ...
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Post by iank9 on Jul 28, 2007 11:34:41 GMT -5
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Post by Truffaut on Jul 28, 2007 12:30:50 GMT -5
Gittte, The apartment in the 6th is hideously overpriced. It should be closer to 255K. The one in the 3rd is fairly priced based on the neighborhood and square meterage.
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Post by annettecinca on Jul 28, 2007 16:45:27 GMT -5
Gitte--isn't it fun checking out all the apartments for sale?! My current favorite website is www.pap.fr/immobilier/offres/offre-vente.aspThese are all for sale by owner. They offer various languages on the site, but the translations are so wacky and require a certain amount of guessing anyway, so I've decided to stick with the French. If we decide to go ahead with a purchase, the plan is to fly over for a few weeks and check out as many apartments as possible and meet with a notary or two (will probably use Truffaut's, because of his good experience, and lack of other recommendations). If we're lucky, we'll find something during that visit, but at the very least we will have narrowed down a few neighborhoods we'd like to purchase in and will have gotten an education on the whole process. At this point, we are pretty undecided about where we'd like to buy and the thousands of choices are overwhelming! However, we're not undecided about what our dream apartment is! The problem is deciding which features we will do without when the time comes to plop down the money! Find me a 2 bedroom in a Haussman building with elevator, on the 4th or 5th floor overlooking a beautiful, quiet, tree-lined boulevard, close to the metro and cafes, with parquet floors, tall ceilings, cove moldings, ornate fireplaces, newly rennovated bathroom and kitchen (marble would be nice!). I imagine my dream rental would be pretty much the same, but if I were renting, a 1 bedroom would be sufficient. If we buy we'd like something large enough so the kids can visit and not be too crowded. I've been told that apartments rent out about 20-25 weeks per year on average--I'm sure that varies quite a bit tho. Also, I've seen a lot of ads that list the building fees and yearly taxes--seems like something the seller is willing to tell you up front, so I think it's okay to ask them.
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Post by Truffaut on Jul 28, 2007 17:42:52 GMT -5
We had originally planned to rent 10-12 weeks a year, but find that our actual occupancy is 35-40 weeks a year!
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Post by holger on Jul 28, 2007 20:59:44 GMT -5
I am with Ian, one of my lottery fantasies is an apartment in Paris. It would ideally be in the 1st or somewhere nearby with a view of the Seine. Would need to be in an elevator building, have two bedrooms, and a separate stall shower for we old ones. Since my husband hates heat I guess we would need airconditioning. Gitte, when I look at apartments to rent or hotel rooms, I always look for either the really large King bed or two twins. And we prefer a separate shower to a tub so that goes on the list. My husband is a gourmet cook so a well equipped kitchen is also important. When we rented in England, he loved the AGA. It terrified me and I hated it. Here we have a Jenn-Air which is fine. But everyone looks for different things in a rental so I would simply buy what I liked. If wishes came true, I would not rent it to others. But in reality, it would probably require many weeks of rental to cover the expenses.
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Post by Anne on Jul 29, 2007 0:47:20 GMT -5
I have this fancy dream since Annette and Gitte posted their threads that we could all buy one "multishare" flat together (is that doable, lawyer Becky ?) that we would all occupy in turn : then we would all take good care of the flat while occupying it, and we also could appoint Kasthor to take care of everything when the flat is empty ... But then I realize that we would all be looking for different specificities (like Annette, Sister, Sandy and I would want a sleeps 5, while Gitte, Geordy or Happy would want a sleeps 2, and that's only the beginning of the things we would be arguing about ...), getting everyone all around the world to sign the paperwork or to pay his/her share of the yearly expenses would be a nightmare, and then we would find out that Kasthor is having wild bachelor parties in our precious flat while we are all away ... And so I realize that this is NOT a good idea after all, until I start dreaming again sometimes later ...
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Post by kasthor on Jul 29, 2007 1:55:00 GMT -5
then we would find out that Kasthor is having wild bachelor parties in our precious flat while we are all away ... Toujours ces préjugés... Why?? But the idea sounds nice though! However, to the topic, I'm taking care of an estate my mom owns in the area of Fontainebleau and while we also have an agency to look after it, it is a real pain... You have to watch everything they do, all expenses etc. Because one should remember, we're in France, and thus cheating and sneaking is part of the deal. Your estate agent will most likely know; a plummer, a mason, an electrician, etc who will work for him but overcharge you 10-20% for the agents commission. I found out when we had to redo our heating system in the house that my prices (after ooking for a decent plummer by myself) were 1000€ cheaper than what the agency found out, for better quality (from 5k€ - 6k€)... Go figure. So now I'm officially hired by my parents to watch after the agency...Great... Also, I don't think we talked about this, when you rent an appartment you have to pay taxes on the income it brings, French, and European law for that matter, say that you pay taxes were the income is made, which ends up being 1 month rent per year + the ground tax. Housing taxes is paid by the renter, if it is rented... Also the agency takes a minimum of half a monthly rate for finding new renters (locataires, can't find the word), this is for sure different for vacation rentals. All in all I think doing it by yourself and having someone trustful on the spot to look after it is the better way to go, or at least the only way to make money. Vacation rentals are more lucrative of course and even more when handled without intermediates. Oh and not to forget that for a loan, especially when you do not have any credit history in a country, you need to put at least half the money cash on the table.
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Post by geordy on Jul 29, 2007 8:03:07 GMT -5
No Anne, It would have to sleep many more than two because some, if not alot, of us would probably want to be there at the same times!!! Like as much as possible...we'd make no rental money!!
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Post by Truffaut on Jul 29, 2007 9:58:01 GMT -5
Oh my, there is a LOT of misinformation going on here!
Yes, it is perfectly possible to purchase an apartment owned by many people, who would then share the apartment. It would be necessary to create a corporate entity called a Société Civile Immobilière. This is a type of corporate entity specifically intended to hold real estate for investment purposes and essentially works like an American limited liability corporation. The property itself is owned by the SCI and individuals own shares in the corporation. For the most part, these shares can be bought and sold just like any other corporate shares and are generally free of the draconian inheritence laws that have been in place ever since Napoléon jilted Joséphine.
An SCI can have an unlimited number of owners, and I've been thinking about creating another SCI with the idea of purchasing property in Paris. The basic idea is that a property could have a dozen owners, each of whom gets one month's usage each year. The cost involved for each owner would be the purchase price of the shares, plus annual upkeep costs of about $1,500. I'm going to put up a poll asking about interest in this idea.
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Post by Anne on Jul 29, 2007 10:13:59 GMT -5
Of course, how could I have forgotten to think about the SCI system I have never had anything to do with any though, so I certainly know much less about it than you ...
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Post by kasthor on Jul 29, 2007 10:24:29 GMT -5
I thought about the SCI too but figured I didn't have the specific vocabulary to explain it... If you have a good notary (and I insist, a good one...) he can help you figuring it out very easily. www.sci-societecivileimmobiliere.com/I thought this would be more of an SARL (société à responsabilité limité) no?
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Post by Anne on Jul 29, 2007 11:04:03 GMT -5
Apparemment pas Kasthor . Dans une SARL, la responsablilité des associés est toujours limitée à leur apport (sauf cas extrêmes type malversations), alors que dans l'article (très intéressant) pour lequel tu as mis un lien, il est indiqué que <<A l’égard des tiers, les associés répondent indéfiniment des dettes sociales à proportion de leur part dans le capital social>>
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Post by Becky (Berkeleytravelers) on Jul 29, 2007 13:25:37 GMT -5
What an exciting prospect! ;D It's a fun dream, and the chances of making it work will be improved a great deal, IMO, because there is a lot of local knowledge to help guide those who are first-timers. Bonne chance to all! I would second the suggestion of getting a good notaire to advise, preferably early in the process. Aside from informing you of the legalities, you may find that person has contacts and information about properties that are for sale although not officially on the market, since he/she necessarily is going to be someone who knows a lot about the local property market. Anne, I don't know anything about the type of business entity that is being discussed as a possible method of buying and holding the property (but obviously, Truffaut does!). Hopefully, it would avoid at least some issues that could arise if one simply owned property in one's own name and then rented it out. Kasthor's point about income tax in France (plus also in the US, no doubt! ) on the rental income, plus the need to find (and pay) a local agent to deal with local issues, are the main reasons we have decided that the village house we are renovating will not be rented out in our absence. Sorting out tax and other liabilities just isn't something we have the energy to contemplate (or so we feel now, although who knows what the reality may be!). Our choice is that we will happily lend it to family members (we both have multiple siblings, plus many nieces and nephews who are old enough now to travel on their own), but will not try to generate income from it. (In part, our conclusion comes from the fact that unlike Paris, the tourist season for Aubeterre is only June-September, meaning that the potential for extra income is not very much in exchange for the related headaches of taxes, etc.) But, the bottom line is: I applaud the creative approach you are taking to putting together a consortium to purchase an apartment in Paris! Perhaps we (or, more likely, family members who are exploring France for the first time) will be among your renters at some point! ;D
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Post by Penny on Jul 29, 2007 14:07:04 GMT -5
There is several ways to own property in France just like here, I don't know the French names for them but there is the SCI which Truffaut mentioned, which is probably what is known as a limited partnership here (this is the kind where they are several investors and share the profits LOL if any), in that instance they would own the whole building. The major problem with that is they tend to refinance and change management companies often. With that type you would form your own partnership and lease/or an apartment.New York apartment ownership is probably the closet example. You take out a loan for your apartment and pay maintenance fees to management company who work for the limited partnership/building owners. also known as co-op I worked for many years for a real estate reinvestment firm with an office in Paris however I no longer have contacts there. sorry my French is not better or I could research. However when I win the lottery I'll be next in line to invest! but we can dream
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Post by Truffaut on Jul 29, 2007 14:25:27 GMT -5
An SCI exists solely for the purpose of owning real estate, either for personal use or to rent as an unfurnished property. The biggest advantage of an SCI is that it circumvents the inheritance laws guiding the transfer of real property.
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Post by Anne on Sept 7, 2007 11:12:52 GMT -5
I do some voluntary work for French' biggest consumers association (called "UFC-Que Choisir") and receive all their monthly publications . Now I have just received a thick special issue from them about property buying : they explain and advise about relationships with estate agents and notaires, all the paperwork and contracts that you have to go through, fees and expenses, the protections that the law offers to the buyers, mortgages, etc ... So if one one of you has new questions about buying a place in France, I will be able to look through my new material and hopefully find the answer in there .
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