Tuesday, October 25, 2016

Preparing for retirement (3)

Is now the time to downsize?

Estate agents are often accused of trying to sell their clients, both French and British, the largest house they can afford, and during the years I have spent advising potential property buyers, I have often asked the question '(why) do you need all this space?' before going to explain about local taxes, the costs of maintenance of a large house and garden - and a swimming pool - and will the owners really want to be facing all this in ten or twenty years time. So as a confirmed minimalist I offer my take on the question of downsizing: is now the time?

- The 'tiny house movement' seems to have taken root in, of all places, the United States which can hardly be described as lacking space, except of course in or close to sought-after urban areas such as New York or San Francisco. But even here there is a movement towards creating small studios and apartments, popular with young singles and couples, who want what the city has to offer, as well as those seeking the wide, open spaces where they can build their own home in a converted trailer or using re-cycled shipping containers. For a broad view of what's going on I recommend you look at a website called faircompanies.com  and its series of informative videos.

Aside from these extremes, if you are thinking of buying a retirement property in France for occasional or (eventually) permanent use such as retirement, I offer the following guidelines.

- Every square metre cost money in rates, taxes and other charges; to heat, light, decorate and furnish; to maintain and keep tidy - including a large garden and swimming pool. These tasks may become more burdensome as you get older. Many people find in practice that the 'spare bedroom for visitors' rarely gets used and becomes a junk room. It can be cheaper to accommodate your visiting family and friends in an apartment or hotel close by, with plenty of choice and low prices outside the season.

- Buying small enables you to pay cash, perhaps the proceeds of an earlier sale - say, a two-bed apartment on the coast that more than pays for a slightly smaller apartment or (village) house in a less 'sought after' area inland. The extra cash can be put into your savings account as a contribution towards your healthcare or other unforeseen expesnses - and who knows the final outcome of Brexit?

- If you are hesitating about selling 'the family home' to pay for your move, note that most traditional larger homes are not what younger buyers are seeking without extensive renovation. They tend to lack the modern open-plan kithcen or 'parental suite' (large bedrooom with its own bath or shower plus a dressing room) demand by today's young couples. Your family home may also not be where younger buyers wish to live and could be losing value as you grow older. For examples see the French TV programmes 'Cherche appartement ou maison'  or 'Maison à vendre'  on Channel 6.

- Buying an apartment in a co-ownership complex such as a block of flats invariably involves additional monthly charges which can be high if the complex includes a lift, resident concierge, parking space, grounds, a pool or other amenities. There will be additional calls as needed for lift maintenance or outside painting (ravalement) voted periodically by the co-owners (you will have your vote at the annual general meeting but these additional costs may come as a nasty shock).

- In the town where I live there are attractive small studio apartments facing the park and town centre selling for as little 35 to 40 thousand euros - but with monthly charges for heating, hot water, lift etc that may be several hundred euros per month extra! You need to check these before committing to buy as well as any predicted future works to which you will be obliged to contribute. This type of apartment may be difficult to sell in the future.

- In my own case I bought a top (third) floor mini-loft in a building with just four co-owners (two of whom own the first and second floors which are run as a b&b (chambres d'hote). We have no official syndic (committee of co-owners) but decide on expenses as we go along. We have recently made the front door more secure and updated the entryphones. Parts of the building date back to the 17th century so I take the view it will probably last my lifetime! I contrbute towards the insurance of the building as well as (separately) for my own apartment.

Finally, some of my friends have commented on buying a third floor apartment in a building with no lift, but I am inspired by the 95 year old mother of a dear friend of mine who lives in a terrace house in Brighton and says climbing up and down stairs several times a day keeps her fit and out of hospital.....

Posted by peterdanton@orange.fr