A French Buy to Let Mortgage, which is different from a French Leaseback Mortgages, can be used for all types of French property where you are in control of the letting contract.
French Buy To Let Mortgage
A French Buy to Let Mortgage is available for any habitable property you intend to rent out, whether for short term holiday rental or for 12 month residential rental. In both cases the rental contract with your tenants will be subject to French Rental Law.
Holiday Rental
There is no shortage of holiday rental accommodation in France so you will need to make a decision on location. This might depend on whether you are choosing somewhere you will want to be or where you will get the highest buy to let income.
By choosing the best rental locations you will be able to maximise your rental rate and your occupancy.
Property in the best rental locations is generally very expensive and so you will need to check your mortgageability for a mortgage before you start your property hunt.
Provided the rental contract is explicitly for holiday rentals, you will have no problems in respect of the tenant’s security of tenure but you may be surprised at the shortness of the rental season across much of France.
Residential Rental
To succeed in this market the property will usually be a townhouse or an apartment.
Your buy to let property will be a freehold property which you own outright.
New buy to let properties are usually sold “VEFA” or off-plan and furniture, together with kitchen and bathroom equipment, is often included in the price.
To maximise the rental stream the property will need to be in one of the main French cities, such as Paris, Lyons or Nice where there is an established rental market.
Your buy to let will be rented out on a standard French rental contract therefore for one or three years.
There will be restrictions on your ability to regain occupancy of the property during the rental period and you may be required to extend the rental period by renewal of the rental contract.
Advantages
- Future rental income will help you with the French mortgage repayments.
- Income is known and index-linked.
- Same tenant for duration.
- Local letting agents take care of the service contract, including tenant find.
Disadvantages
- No or limited personal use.
- Rent rises are regulated.
- High degree of tenant protection under French law.
- Tenant has right of renewal, except in special circumstances.
- Future rental income alone is insufficient to qualify for the mortgage.
Glossary
Locataire – tenant
Bail – lease
Bailleur – lessor (landlord)
Loyer – rent
To find out more, complete the Best French Mortgage online application form then let us, the specialists, do the rest.
Also check our full French Mortgage Knowledge Base page.