Thursday, March 5, 2015

Research - before you buy!

An interesting and enlightening report in my local newspaper L'Idependant this morning. It concerns the city of Carcassonne - 44 000 pop., head of the Aude department, a historical walled city popular with visitors, but there is a property crisis.

Apparently there are 4 000 empty apartments seeking tenants and representing some 14% of the housing stock. Unfortunately they are the products of numerous buy-to-let government subsidised investment schemes dating from 2000 onwards and designed to promote the construction of low-cost apartments. Unfortunately, as in many areas of France, the Carcassonne apartments were built on cheap former agricultural land, remote from public transport and other services, and in places no-one wanted to live because of the absence of jobs.

My own researches show that in over 50% of cases 'investors' failed even to visit the area where promoters encouraged them to sink their money, and few if any actually investigated the market potential for low cost rentals, by talking to local estate agents etc. As a result many are now the owners of a property they can barely afford to pay for, that is impossible to let and near impossible to sell, for all the above reasons. In the Carcassonne case, the town hall is talking of taxing owners to force them to rent their properties......

What these examples show is that it is absolutely essential to conduct your own researches on the ground, particularly if you are thinking of buying any kind of property from which you hope to make money - a café/restaurant, bar, rental apartment, shop, B&B etc. Never, ever rely entirely on the brochure!