Hello all,
I am after some peer advice and experience from anyone with an insight.
My situation is that my family and I moved to France a year ago and we left our UK house rented out. In an ideal world I want it to pay off and sell it for retirement income in 20 years.
We are residents in France now but renting a place and are happy doing this for now as its a good situation and cheaper than our UK mortgage.
Every now and then we wonder whether it would be more, less, or the same money to sell UK house and invest the current money into 2 small apartments here and rent as holiday lets.
Our area is a high tourist spot and we know we could make money this way. The prices are increasing here as it’s desirable, but the main gain would be the high income during summer and the much lesser debt we would have, compared with the UK mortgage.
I just cannot get my head around which scenario is better long run wise!
Any advice very appreciated. Thank you.
We have tried out all those scenarios over time with rentals in UK and France, and tourist accomodation.
My personal view is if the UK rental is stable and not causing you management problems then leave it for the moment.
Buying and selling houses costs money and at the moment the exchange rate is bad so you will loose on the transfer. Generally it takes several years to earn back the purchase/sale costs.
As for making money from tourist rentals the market is changing hugely and the tax authorities have clamped down on the tax breaks so it is harder to make profit. It can be done of course, but it now requires serious work. On the surface it sounds attractive but once you factor in taxes, business taxes, social charges, rising utility costs, maintenance and plumbing emergencies (you always get these) you have to control costs hugely to make it work.
Just look at the number of general tourist rental properties for sale and it might give you a clue,
Does you visa allow you to work? Unless you employ someone to do the changeovers etc, that would be considered work (I believe - it’s a topic that comes up on here occasionally).
Are you very sure you’ll never want to move back to the UK?
Because once you’ve sold up there, you can easily find yourself priced out of that market a few years down the line.
@JaneJones this is a good overview and i feel i lean more this way as the status quo seems to make sense with all the risks considered.
There are also risks of having tenants in UK house and the potential repairs over the years if something major needs fixing. We still owe a large part of our mortgage so releasing that makes life easier in that way.
I do also have concerns about the values in UK going down on coming years. Do you have a view on that as someone who sounds quite knowledgeable in property.
We would definitely lose money on fees if sell and move investment here etc and it means commitment to France long term.
Managing the properties here would effectively mean it would become my job and something we could build on over the years if done successfully.
@Porridge i am irish so am able to work here. It would probably become mu job and i would start managing properties as my job… my own and other peoples with luck on my side.
A big step though! Very unsure its best way to go.
@Helenochka i am sure for the short term but it depends which country is doing better in 10 years time. France and UK seem to have similar issues and debt. I want to choose best place for the kids long term.
We would invest in small properties here which should he easy to sell, plus values do go up here.
I wonder if the UK could see a crash in comimg years!?
It’s impossible to predict what will happen in the future and who will see a crash when. But just bear in mind that historically, house inflation in the UK has way outpaced house inflation in France.
You want to put all your eggs in one basket?
When unlike many, you have the chance not to ?
Unless bad repairs for the UK property are looming that the cashflow of the rental can’t cover - personally I’d keep an eye on my strategy but only consider my next move as and when tenant decides to leave.
You’ll be reporting the net rental income for the UK property in your French tax return. You’ll be able to have some freedom in how you go about that eg the net figure may look different according to French vs UK rules. With clever planning especially for expenses which could be classed as capital improvements vs maintenance, and making sure bills are dated in one calendar year or another, and in one UK tax year or another, you could do very well. When you’ve thought about it you can make an appointment with your local F tax office at a quietish time of year to check they’re ok with your methodology.
If you’re that keen to be a landlord here I’d find a way to test it out without risking the UK property for now . No one knows the future in either country but one thing you can be sure of is French regulation of that sector will get tougher.
Unless you live in a very special area, I would question both of your assumptions about selling being easy and values going up…
In my experience, neither assumption stands up to the reality…
These are wise words, take note @nic681
Although I’ve never wanted to be a landlord I now wish that when we sold our UK house we’d used the capital to buy a simple rental property over there (the property we sold was never going to be easy to let for several reasons).
If we’d kept that foothold we would be in a much better position to return to the UK, a move we may be boxed into by French inheritance rules surrounding step children being liable for 60% tax on anything I leave them.
Unless you have particular and unique skills in that area it will be you and the other million English speaking handymen scraping a living in that category 
A key piece of info we lack is your age, which affects your ability to recover from a financial error.
However my asvice is do nothing until you and your family are established, your job/business is stable and you know what you all want to do in the next, minimum, five years.
BTW, Surely cheaper than the rental income (after tax) is the measure, you are still presumably paying the mortgage?
I am a French resident and UK landlord of a number of properties so feel I can speak with some knowledge.
So you think this situation will not happen having tenants in a French house?
After paying off your UK mortgage will you release enough equity to fulfil your plan?
It is always possible but historically other than the occasional blip like the negative equity situation a few years ago uk property prices have almost always kept well ahead of inflation which cannot be said for French properties other than perhaps in the big cities.
Very long term. When adding the loss from fees when selling in the UK added to the fees incurred when buying in France you will be burning an awful lot of money and for a venture in a foreign land that so many have tried and failed or realised that its not all its cracked up to be.
I will extract one word from rhis quote ‘IF’.
I note you have Irish citizenship so yes you are free to work here. Managing property is one skill but do you intend to physically carry out repairs and maintenance yourself? Do you have the knowhow and more importantly you will need to be registered to carry out any work.
Perhaps your interpretation of managing is to react to problems by employing skilled artisans to work on your properties?
If so then as a none native the chances of building a team of professionals who will react at speed to prooerty repair and maintenance are slim to none existent.
Watching such programmes as ‘Homes Under the Hammer’ should come with a public health warning!!!
Sorry if I have I have told it as it is and not as you think it might be. Your money, your risk.
Out of interest what are your current skills?
Entirely agree.! Having been able to achieve this is one thing that we have given thanks to so many times over the years. It has saved our sanity overall. We bought direct from owner, who happens to be best maçon in the area, and became friends. And through him and our building project got to know other good artisans. Jerome the plumber is high on the list of things we will miss when we move.
Why not go and live with the step-children when the time comes for mortal-coil shuffling? 
Sadly the crystal ball isn’t reliable.
@KarenLot Our tenants cover the mortgage and estate agent fees but anything extra comes from our pockets. We are coming up to the end of fixed rate deal and will have to change to buy to let mortgage, hence the thinking through options.
I agree that it feels too soon to make a final decision and another couple of years to contemplate definitely seems more sensible.
My thinking was that the longer tenants are in the more they depreciate the standards of the house and therefore our selling price.
We make no profit on this hoise but it is more or less paying our mortgage off.
All of the fees to sell up and buy here, plus the risks that you talk about do all in all feel more scary i have to admit!
I am interested about your comments about expenses etc. what do you advise i ask the french tax office? Effectively, I ask them how to best declare my expenses?
@Stella Our area is very sought after as there is no more space to build here and its on the coast in the south.
Our UK house is also in a town which rents easy too though, not as nice a town but very rentable.
Here would be holiday rentals so much more organisation, but UK its long term tenants with minimal needs.
I wouldn’t. Few French tax offices really understand all the details of international tax. Start by reading up and understanding French reporting of rental income yourself - which has just changed. And then it’s easier to see how UK returns fit in. Juggling expenses over years to me only works if you operate on regime réel and are wanting to use depreciation.
And long term tenants can end up treating your house as home and loving it more than you do. Our last ones repainted the whole place - asking us first of course.
@Roger_Lapin Hi John, I am mid 40s and we only recently got the mortgage! A few years ago so a large debt is still owed. The tenants just about cover mortgage and agency fees, no profit for now.
My job is freelance Executive Assistant with property background so I would retrain specifically in property management, however i know here it is hard to find workers to do maintenance etc so maybe not easy to organise them if you cannot track them down!
I am quite happy to hear that most comments think keeping the UK house seems more sensible. I like the idea of renting something out here but it does all feel a little of a stretch to achieve right now.