| FACT
FILE - Buy to let in Europe
Buy to let – Holiday Homes outside the
UK 
See
also How
to present your rental property for letting How
not to present your rental property for letting
The Buy
to Let market has been growing considerably in the UK since the mid 1990’s
and now with the growth of second homes outside the UK there is even a greater
market. Where
to begin?
First of all decide on why you are buying – Do you intend to live in the
property for holidays or purchase a property purely to let out permanently? Long
term renting: If you are going to
buy a property purely to let out, then you should seek the assistance of a professional
estate/letting agent in the country that you choose. Most countries have different
systems for letting out a property and you could find that you have to commit
the letting up to nine years. You should also seek specialist help regarding the
location, whether to let it furnished or unfurnished. Holiday
Rentals: If you go down this route it will mean that you have the benefit
of an income from the property plus the opportunity to take your holidays there.
First
of all you have to decide on a country - France one of the most popular, Spain
still very popular like Portugal and Cyprus. Then there are the less well known
destinations - Greece, Turkey and Eastern Europe. Many
people start their research by looking at a country they are familiar with. You
then have to decide on the location. If you are aiming to let the property to
cover costs and mortgage repayments then you must purchase it in an area that
is going to be popular with visitors. You should also take care right from the
start not to overstretch your budget. Remember that you will often have to pay
a purchase tax on the property, lawyer’s fees and in some countries agent’s fees
when you purchase.
The
next decision is your market. Are you aiming solely at the UK and Irish market
– this will mean it will have to be located close to airports or are you considering
a wider market – Dutch, German & Scandinavia for example?
A wider market will naturally give you more opportunities to let the property,
but you also have to promote it in those additional countries.
You
have now decided upon the country and the area within that country. How do you
find that property? There are several ways. Companies organize expositions in
many countries like the UK and Ireland. Here you go along to a local hotel and
collect the information and this is followed up by an inspection flight. You will
often find that these properties are just being built or are going to be built.
Many of these companies are now offering second hand properties. 
There
are numerous property and country magazines with pages of ads for new and second
hand property that is available and many newspapers advertise similar properties.
A
very popular method is the Internet. If the agent’s site is good you should get
several photos of one property and many agents will be happy to email you further
pictures. If you are then planning an inspection visit, arrange several appointments
so that you get an idea of what various properties are like. Many agents speak
your language as well and if in doubt take along a friend who can help.
If
your property is located in a country that is very warm, particularly in the summer
and you have the opportunity of buying a place with a pool, this can certainly
boost rental income and make it more attractive to rent. There are of course additional
maintenance costs involved with a pool. Furnishing
it 
– You now have the right property – the next step will be furnishing it. Equip
the kitchen well. People on a self catering holiday don’t want to spend a lot
of time washing up – provide a dishwasher if possible. A washing machine is an
essential and a television is very welcome particularly on a wet autumnal evening.
Along with a television you might have to consider a satellite system and which
one will depend on your core market. Most
people have mobile phones, so it is not necessary to provide a telephone. If you
do, contact the telephone provider to find out ways of providing one in a holiday
home whereby you don’t find you are paying someone else’s phone bill. Even if
you have incoming calls, someone can always accept a reverse charge call to your
phone! Remember
to take into account safety measures. Install a smoke detector, have your appliances
checked (in some countries it is the law) and make sure that the furniture is
smart, in a good state of repair and if applicable compliant to local safety regulations.
Breakages can occur so provide crockery and glassware that can easily be replaced
at the local supermarket or department store.
Bedding
& bed linen. Decide whether you provide
this or not. It is an additional cost – not only for the initial (plus replacement
purchase) plus the ongoing associated laundry costs. Local
agent -
You will need to consider in your financial planning the costs of employing a
local agent. This can be in the form of an agent who finds visitors to rent the
property and checks them in and out, arranges maintenance etc, or purely someone
who just acts as a key holder and checks your visitors in and out and generally
manages the property for you. Alternatively
you can just employ an agent to check the visitors in and out and organise routine
maintenance. Some people get to know a neighbour and ask them to do this. If you
go down this route, it should be on a business footing. WARNING
- RENTAL SCAMS IN HOLIDAY LETS CLICK
HERE FOR DETAILS YOU COULD BE NEXT! Letting
& Marketing – don’t reserve the best letting weeks
of the year to yourselves, particularly if you need the rental to pay for the
property. Try and visit it off season. It is good to go there at least twice year,
to check on its state and condition and also to carry out any repairs or garden
tasks that have not been attended to. The
amount of time during the year the property is let will depend on your outgoings;
there are several ways to find holiday renters. You can use the Local agent, list
it with a holiday company back home or advertise it yourself using a specialist
holiday publication (or several of these) or try the national newspapers. Advertising
costs can mount up, particularly if you are not getting the enquiries. As more
and more people are turning to the Internet, look for a specialist site like
www.jmlvillas.com.  the
low cost villa advertising service
You
simply pay an annual fee of under £12 and the enquiries go straight to
you. Many people then decide to have their personal website. This
can provide a lot more additional information about the property, area and if
it is well illustrated with photographs, you have then developed your own brochure
on line. The costs of building a website can be quite high, so shop around and
don’t go for something that is too fancy, has long introductions and large photos\that
take a long time to download. People using the web, so get bored and want quick
results. Finally
remember – get your rental price attractive to attract renters. Wills
You should make arrangements whilst you are in the process of purchasing
your property to make a will in that country in relation to the overseas property.
In some countries like France there can be inheritance problems whereby children
automatically benefit rather their mother. The lawyer handling your purchase can
be consulted about local formalities
Check
List rules for a Buy to Let Property -
Buy
in a country that you know – As you will also be wanting to stay there, make sure
that you can get there easily. -
Research
the up and coming areas. -
Target
the market you want your property to appeal to. -
Don’t
make too many restrictions on the letting – You must consider family lets, pets
travel all over Europe these days. -
Get
the rental price correct. It is no good setting a high price when people are not
interested in renting your place. Check out the prices of the competition. -
Location of
property – is it within easy traveling
distance of an airport? How far away is the nearest motorway – town or beach or
lakes the property located with regular water supplies and electricity? If the
property is on a septic tank remember that the maintenance has to be arranged. -
Don’t just buy
a property that appeals only to you – if you are buying to let you need to consider
firstly those who will be paying the costs – your paying guests. -
Finance – Your
rental income has to cover the mortgage – the upkeep of the property – the marketing
costs – Paying for a local agent to administer guest transfers – Tax (local property
taxes plus income tax in the country the property is located in / or back in your
home country) -
You
must think about this as a long term investment – you should also take into account
that you might buy when property has had a history of rising in price, however
there can always be the possibility of prices falling in your chosen country or
region and your property no longer being in a “fashionable” holiday area. -
Insure
the property – Buildings, contents and for your paying guests. -
Provide your visitors
with an Information folder for the property and don’t refer to them as “Tenants”.
Many people do not like this term. -
If
you are going to spend your own holidays at the property and want to keep some
of your own personal belongings away from your paying guests, try and build, or
use a specific cupboard, cellar area etc to keep locked. N.B.
This information should not be relied on for accuracy and is presented here
without the responsibility of jml Property Service and the website it is being
displayed at. ©jml property Services
09-04 
 the
low cost villa advertising service
Advertise
your Holiday Home Property -
just £12.50 a year including VAT... CLICK
HERE for Details
Fact File
- Gas
checks on Property for sale in France: Since
1st November 2007 all properties offered for sale in France with natural - mains
gas services installed more than 15 years ago must include a Diagnostic Gaz in
the Dossier de Diagnostic Technique (This is rather like the HIP - Home information
pack in England and Wales). It costs around 100 - 150 for the test
that includes supply pipes, boiler, water heater and radiators. The certificate
will be valid for three years and the seller has to organise and pay for this
before a compris de vente can be signed. There
are also new rules for surveys from November 2007 all the technicans carrying
out these tests must be accredited by COFRAC Comité d’accreditation français (Similar
to Corgi in the UK). The new rules could effect around 10 million properties when
they go on the sales market. If a property has bottled - cylinder gas (like calor
gas) this is not covered by the new test. SEE
ALSO: Diagnostic de Performance Energétique - DPE - France for Rental Property
FACT
File - Property Taxes in France
So you are about to purchase that ideal property - If you require finance or don't
you still have to take into account the payment of property taxes. In France the
tax system is centralised, however the location of the property will ultimately
determine how much you pay.
First of all you have to pay the"notaire's" fee. Most of this in fact goes
to the government like Stamp Duty in the UK. This will work out around 6% to 8%
of the purchase price. There is also a small land registry tax to pay.
The property sale is now complete. You have the"Taxe D'Habitation" which
is a local tax. The amount you will pay is determined from the cadastral value
of the property. This is based on the size and location -not market value. It
is generally thought to be reasonable particularly in rural areas.
It should be noted that if you let your property as a holiday let and go there
a few times a year you still pay the"Taxe D'Habitation", but in many areas
you will also have to collect a"Taxe de Séjour" from your "paying guests".
The authorities see it as you are making money from renting out the property then
so you should pay them some revenue as well. This might only be a few cents per
person per day, but it still has to be paid and it will depend on your local town
hall.
The "Taxe foncière" is also paid annually. This generally quite low. There
is also a wealth tax "Impot de solidarité sur la fortune" that is paid
by owners of property worth in excess of €732,000.
Inheritance tax:"Impot sur les successions" this usually has to be paid
when the owner dies or one of them.
You are also expected to pay tax on any rental income and although France has
tax treaties with many countries including the UK it is worthwhile employing an
accountant to help you manoeuvre through the French tax minefield.
The above information is given without responsibility of accuracy.
©jml Property Services 09/05 Buying
or selling info in France - If
you need to
check out what property has sold for in France then you need to visit www.immoprix.com
. The data is provided by Notaires. You'll find prices and indices for each type
of property (house, apartment, land) based on its geographical location (region,
department, municipality, district, neighbourhood). FACT
File - Property Taxes in Spain
So you are about to purchase that ideal property - If you require finance or don't
you still have to take into account the payment of property taxes. In Spain.
You have to pay an income tax "Impuesto de la renta" and a wealth tax -"Patrrimonio".
This is arranged on a sliding scale climbing to 2.5% on properties over €10.7m.
The base rate for the tax"Impuesto de la renta" - income tax is 1.1% of
the cadastral value of the property. This determined by the size and location.
Non residents pay 25% of the tax base.
If you are renting out the property the tax rate you have to pay is 25% of the
annual rent. You are not allowed to make deductions for expenditure.
When you sell the property a non-resident is subject to 35% capital gains tax,
however you can take off the costs for improvements during ownership.
There is also a local tax"Impuesto sobre bienes inmuebles" This based on
the cadastral value of the property.
It is probably worthwhile using an accountant to assist you with these tax returns.
The
above information is given without responsibility of accuracy. ©jml Property Services
09/05 SEE
ALSO Renting
in Spain Buying
a Property in Spain How
to present your rental property for letting How
not to present your rental property for letting Back
to Property Information Looking
for Buy to Let Books?
______________________________________
jml
Property Services are members of the National Landlords Association
in the UK and British Chamber of Commerce Cote d'Azur - France
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