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Ever fancied owning a modern French home? Buying a property direct from the developer, before it has even been built, is an option that can have advantages, but if you don’t quite have the courage to buy off-plan, by choosing a recently built resale property, you can still enjoy the benefits of the all mod cons approach.
Louise Hurren chats to Howard Hughes, a graphic designer who had the vision to buy a nearly-new home in the Languedoc, and asks him why he bought – and then sold – his French property.
HOWARD HUGHES – HAVING THE BEST OF BOTH WORLDS
 A graphic designer in his thirties, Howard Hughes couldn’t make up his mind between buy-to-let or personal use - so he opted for a combination of both.
What sort of home did you buy, and why?
I wanted a modern property, and ended up with a new build resale, with only a few years on the clock! I bought a one-bed maisonette with a mezzanine level and small patio, in the village of Barcarès on the Mediterranean coast, close to the Spanish border.
I wanted to get the best of both worlds, letting it out during peak weeks but also visiting with my girlfriend during the off-season. The major attractions were the Pyrenees – a fantastic backdrop! - 18 kilometres of beach, and only a short drive to Spain and Andorra.
Why did you choose to buy property in the Languedoc?
I stumbled on the region purely by chance: a Dublin taxi driver mentioned it to me, and it all took off from there. My French home was in good condition when I bought it, in July 2004, for €65,000 including taxes and fees; it was my last viewing, and love at first sight.
My dilemma was whether to focus purely on rental income, or to make personal use of my second home. I did let it out in 2004 - during June, July and August I was charging about €550 per week, or a weekly rate of around €320 in the low season – but after that I just shared the place with friends and family, which was fine, although obviously I missed out on the rental income.
You’ve recently sold your Languedoc home – why?
Yes, regrettably I did sell the property, to pay for my wedding in April 2007. We miss it very much but I suppose, to be honest, we weren't really making the very most of it, and getting married was our priority.
We went about selling the place by putting it on with the agent we bought it from, and another agent who was the previous vendor, whose market would have been more local. I got an offer of €67,000 and I took it, as the purchaser would have to pay the 10 per cent agent’s fee, and an additional 7 per cent for the notary’s fee and tax.
Did you make any money on the deal?
What this meant to me was that, net, I broke even once French capital gains tax had been deducted. Although the property’s value had increased by 13 per cent over the three years I owned it (I bought for €65,000, and it sold for for €73,700), I saw none of the gain. The agent on the other hand did rather well, as they made money on this property twice – 10 per cent when I bought it, and 10 per cent when they sold it again for me!
If you do the maths, you can see that if you’re buying French property with investment in mind, you need to take a long-term view. In my case, going for rental income rather than capital gains should have been the name of the game.
Any interesting anecdotes?
The couple who were planning to buy my place contacted me directly to cut out the middleman. While I had nothing to gain, it would have been cheaper for them – the point they made was ‘why give that extra money to the agent for doing nothing?’ – I didn’t take up their offer.
Would you do the same thing again?
For those sitting on the fence and wondering where to buy a holiday home, I really recommend owning in the Languedoc. There’s no doubt in my mind that I’d make the same purchase again. The only thing I’d change would be my approach – I’d make a clear decision about exactly why I was buying, either as an investment or for personal use. It’s tough to do both.
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