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Nice- Is it a good time to invest?

Discussion in 'French Property' started by ady1231, Mar 31, 2008.

  1. ady1231

    ady1231 New Member

    Hi Guys;

    I am looking to buy a studio - onebed flat in Nice. What are the current prices, and is it a good time to invest?

    what about Rental yields, and the maximum mortgage i can get?

    Please note that i am NOT looking at leaseback properties.

    cheers
     
  2. CaroleBay

    CaroleBay Senior Member

    Hi There

    I've seen one bedroomed apartments in the the old town of Nice for sale at 115 000E, and the prices steadily rise according to the quality and location of the property.

    I don't know about rental income, that will differ according to whether you rent out on a long term tenancy or whether you opt for holiday lettings.

    The maximum mortgage available to you if you are a resident of an EU country is 85% of the purchase price.

    If you are a resident on a non EU country, the maximum mortgage available is 80%.

    Kind Regards
    Carole Bayliss
    mortgagefrance.com
     
  3. ady1231

    ady1231 New Member

    thanks;

    115 K E sounds good, is this in the old town? any thoughts about the market at the moment?

    Cheers
     
  4. CaroleBay

    CaroleBay Senior Member

    Yes, most certainly in the old town of Nice.

    The market ? Nice (CDA) will always be popular.

    Kind Regards
    Carole Bayliss
    mortgagefrance.com
     
  5. ady1231

    ady1231 New Member

    well, what is the rental market like, i need a close figures.

    Cheers
     
  6. Lee Filkins

    Lee Filkins Administrator Staff Member Premium Member

    My REPLY IN BLOCK.

    I am looking to buy a studio -

    BETTER YEILD THAN ONE BED

    one-bed flat in Nice. What are the current prices,

    YOU COULD PAY FROM €65K TO ANYTHING, DEPENDING ON THE SITE & THE M2

    and is it a good time to invest?

    SOUTH OF FRANCE IS ALWAYS GOOD SOME TIMES ITS BETTER THAN OTHER TIMES.

    what about Rental yields,
    MAXIMISE RENTING TO STUDENTS SPRT TO APRIL AND REST HOLIDAY MAKERS.

    and the maximum mortgage i can get?

    GETTING A MORTGAGE IN FRANCE IS A PAIN, THE PAPER WORK AND THE ABSURD REQUIREMENT WILL DRIVE YOU INSANE. THEY WORK ON A FORMULA OF % OF LEFT OVER INCOME AND MOST OF UK UNDER PAYE WILL NOT QUALIFY. SELF EMPLOYED ARE NOT LOOKED AT VERY FAVOURABLY.
    Please note that i am NOT looking at leaseback properties.

    COMPLETION/LEGAL COST IS HIGH, SPECIALLY ON SECOND HAND PROPERTIES. TAX ON RENTAL IS NOT VERY FRIENDLY


    cheers
     
  7. ady1231

    ady1231 New Member

    well camel, thanks for your reply, although u didnt seem happy answerin my questions!

    so, what yield are we talking here 8 , 9 12, 2%. regarding the prices, i am talking in center of old town , surely u cant get anything for 65k!
     
  8. CaroleBay

    CaroleBay Senior Member

    ..... at least the French banks are still lending mortgage finance .....
     
  9. ady1231

    ady1231 New Member

    well ya, i just got my mortgage LTV 85% approved. Still waiting for someone to help me about nice market. are 8% returns reasonable?

    Cheers
     
  10. Lee Filkins

    Lee Filkins Administrator Staff Member Premium Member

    subject

    ady 1231. The plain and simple answer is NO, you cannot get 8% yeild. If you can get a 5% gross yeild you are doing well.
     
  11. ady1231

    ady1231 New Member

    ok camel, not sure why i feel as if u r shoutin at me!

    well, it looks like nice prices are still holding up, i beleive french market will be more stable than the british one!

    so, whats the price for a studio in the old town of nice?
     
  12. Lee Filkins

    Lee Filkins Administrator Staff Member Premium Member

    ady1231: No, I am not shouting at you. I only wrote in block capital to stress my point. Prices are holding, yes and the market is more stable than in Britain. Defends on the M2
    as a ball park €6000 to €8000 M2. depending on area, decor, lift, light etc, etc.
     
  13. ady1231

    ady1231 New Member

    so is it a god tome to invest in nice?
     
  14. Lee Filkins

    Lee Filkins Administrator Staff Member Premium Member

    subject

    I, don't think this is a good time to invest anywhere. I should wait until late summer. But if you are hell bent on buying now than keep in mind that € is very strong against the £. Thanks to our economy more dependent/aligned on/to USA.

    Even, if you are going to get a 85% € mortgage, the 15% plus other cost legal etc, which could be an additional 13%. Please check with your mortgage provider that the 85% that they are lending you is inclusive of VAT, i.e. included in the property price, As the Banks in EU do not lend on the VAT element of the purchase price.
     
  15. neustria

    neustria New Member

    I agree Camel. As a rule of thumb in Aix-en-Provence we recently used a yield of 3,8% to dertermine fair market value. At that level the property sold quickly but it still came out at 3500 euros/m2 - which isn't cheap....
    I would say, as a buyer aim for a 5% gross return which would insure that you haven't overpaid the property. Taxes are high though on rental income. You will have no hope of financing your purchase with the rental income and the only thing that you can hope for would be a capital gain somewhere down the road.
    Personally I would not invest at all until the current financial crisis works itself through. The currently falling prices could go much lower.
    One thing that I will say about investing in the South is that high demand appears to ensure that you will always find a buyer. Not so say, in the Poitou-Charentes, where the current crisis is much deeper.

    Neustria
     
  16. ptemple

    ptemple New Member

    Not quite sure where camel gets his information

    Tax on buying an apartment should be around 7.1%, and this includes all taxes and solicitors fees. I do not see where you get VAT issue from, the 85% mortgage covers the price of purchase including agency fees. Thanks to strict French credit controls, there shouldn't be any more problem getting a mortgage this year over last year (though variable rates are higher). You need to show your repayments are less than 1/3 of your net income though. I got my mortgage through mortgagefrance, one of the posters below, and they took care of all the paperwork for me.

    Yield should be about 8% if you get a good deal. This is renting via seasonal lets. It depends on (a) your purchase price and (b) the rental management company you use. You can estimate 4-5% yield if you want to be safe. Of course you can increase yield by buying a complete wreck and renovating it yourself. Example: if you buy in the Carre d'Or (the most rentable part of Nice) then a one bedroom 45-55m2 is around 250,000 euros. The prices vary between 4,000e/m2 and 6,000/m2. The latter will be a completely renovated apartment in a prestigious road. You should be able to rent this out at around £550 (700e) per month at peak and £400 (500e) off-peak (figures from HolidayLettings web site). A reasonable management company should be able to rent out 35 weeks per year, so let's say 25 per year to be conservative. This will pull in 16k/annun. This gives you a 6.5% gross yield. If you get the right advice on choosing the property you should be able to improve on this. Out of that a rental management company will take between 15% and 25% depending on the services you ask for.

    I would say it is still a good time to buy in Nice but there isn't the same urgency as when prices were rocketing up a couple of years ago. Prices will still go up but more slowly. To answer ady, no you can't get anything any more for 65k. The cheapest rentable place you can get in the Old Town is about 115k. I personally wouldn't recommend Old Town at the moment as the price/value ratio isn't as good as many of the other areas.

    In response to Camel's last post, I would say that it's hard to say how long it would be best to wait. If you wait then the £ may increase (though if you are getting a full mortgage this does not make that much difference) though on the other hand now there are some bargains to be had whilst the French hold off buying until Sarkozy's new house-buying-friendly laws come into effect.

    Phillip.
    Disclaimer: I work for the independent Nice property broker Med In Heaven
     
  17. Lee Filkins

    Lee Filkins Administrator Staff Member Premium Member

    ptemple.
    I, agree 99.99% with your posting etc. As you know that French property prices advised are inclusive of VAT, I believe it 19.6%.

    Yes, the other cost are around the %, stated by you e,g. registration, stamp duty & the notary fee etc. You will also know that % varies if you are buying a new or an old property.
     
  18. Real25

    Real25 New Member

    Is time is good ??

    hii
    I am buyer looking to buy a house - onebed flat in Nice. What are the current prices, and is it a good time to invest?

    what about Rental yields, and the maximum mortgage i can get?

    Please note that i am NOT looking at leaseback properties.
    help me out from this condition...
     
  19. ptemple

    ptemple New Member

    Current prices range 200k-300k, with the average being in the middle. The lower end of that price range around the 200k will get you a pied a terre in an average building, probably in the Quartier Musiciens. It will be 30-40m2, won't have any outside space, and will need 'refreshing'. There are also cheap deals in the Old Town, but be wary as there is now a lot more buy-to-let there, renters have become more picky, and a dingy 5th floor (no lift) appt with poor communal areas is no longer considered 'quaint'. Anything under 200k and you are better off with a studio, as it's unlikely the 1-bed will be in an optimal area for rentals.

    At the top end around 300k you should expect a brand-new renovated apartment in a nice building, good facade and communal areas, with a balcony or terrace. Anything over 300k must have something exceptional, like a huge terrace, otherwise you are much better off going for a two bedroom in that price range.

    If I were you I would look at property around the 270-280k mark and try and secure it for around 250k. You should sacrifice size for location, a 35m2 appt in the Carre d'Or near the beach will rent more than a 55m2 appt in the Quartier Musiciens near the train station. There are currently good deals in the Fleurs area but do not go further west than Grosso. South of Debouchage is also has a few good deals but do not go north of there. And a balcony is a big plus, no matter how small it is.

    Do not go outside any of the areas mentioned above, and if you see something on the 'net that looks too good to be true then it probably is. Our system holds every property for sale in Nice, and I can tell you there are good value for money properties but no real bargains. If someone tells you something is a good rental property, do not take their word for it. Call up a rental company and ask!

    Now is a good time to invest but a different approach needs to be taken in this new market. Before you needed to grab any value for money property on the spot, as many owners put on their properties over-priced in the knowledge that eventually somebody would pay their asking price. From now until Autumn you can afford to be more circumspect. Put in a lower offer, and if you do not get the property immediately book the next flight for a couple of weeks later and try again.

    The rental yield and mortgage questions I have answered above. I wish you the best of luck in your search.

    Phillip.
     
  20. CaroleBay

    CaroleBay Senior Member

    Hello Real25

    Your posting was virtually identical to that of what Ady1231 wrote on 1st April 2008, which started this thread .....

    In answer to your question about the maximum mortgage available to you .....

    Your nationality, your country of residence, and to which country you pay income tax, or declare your income, will determine the maximum mortgage available to you.

    For a private purchase (not leaseback or commercial), if you are resident in UK and pay income tax in UK, then an 85% mortgage on the purchase price is possible, subject of course to complying with the rule of a third of monthly income to service the cost of all expenditure.

    As to what property is available in Nice, and taking into acount the purchase price, the location, investment potential and possible rental income, I think Phillip has given a good indication of current trends and attitudes.

    Buying a property in a 'foreign' country can be a confusing experience and full of costly pitfalls if you don't know the ropes.

    Research as much as you can for yourself, and ask for advice and guidance from people who specialise in the many various aspects of buying property - you'll find there are some very knowledgeable people in this forum .... why not ask them ?

    Kind Regards
    Carole Bayliss
    mortgagefrance.com
     
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