Gîtes in France – What Returns Can You Expect?

If you’re reading this article then it is likely that you either own a house in France or are considering it, and want to turn it into a gîte. That might be with the intention of running it as a new business, income-earning venture, or you might want to let the property out just to cover its running costs. Let’s explore the subject – about which there are a lot of misconceptions.

Like any good story we’ll start at the very beginning with the original meaning of the word gîte. It literally means a ‘shelter’ and for many years gîtes certainly did provide shelter of a very rustic variety. Back then this was all meant to be part of the holiday experience, and a multitude of problems from mice scurrying around the bedrooms to showers with inadequate water supply were forgiven as they were considered part of the fun. Not any more, however. Today guests are far more discerning and want – expect – their self-catering holiday accommodation to be at least as sophisticated as the home they have just left. Understanding and acknowledging this change of standard is one of the key factors in running a successful gîte.
Helping owners turn their much loved holiday home into a commercially successful gîte, can take the diplomatic skills of a United Nations ambassador… because what the family will regard as sweet idiosyncracies of the property, your paying guests may regard as real issues they are not happy with.

Is the gîte market saturated?

The debate on the state of the gîte market continues to occupy newspapers and blogs around the world. It is true that the market is far more competitive than it was in the past and making a living from gîte rental is far tougher than it was. It’s not impossible, but if you’re going to go ahead you need to be aware that you are joining a marketplace that is already teeming – concrete figures are hard to find but it is estimated that there are five gîtes available for every person wanting to book one.

The reasons for the over-supply are usually blamed on two factors. The first is television programs such as ‘No Going Back’ that seemed to show that one could buy two houses in France, live in one, and rent out the other one for 50% of the year living comfortably from the income it provided. For Brits and other overseas buyers in search of a downshifted lifestyle, it was a dream scenario that encouraged many to buy and start gîtes in France.

The other factor, seen in the last ten years particularly, is that of Francophiles, who would have rented holiday accommodation each year in France, having taken the plunge and bought themselves a property there. They have affected the letting market twice over – not only do they no longer rent a house in France year after year, they also provide their holiday home to their friends and acquaintances on a non-commercial basis, allowing them to borrow or rent at a low rate, removing another potential guest from the commercial marketplace.

The result of both these changes is a fair number of property owners in France who have discovered too late that they may let their one gîte for six weeks of the year, maybe even a bit longer, but that the revenue from those weeks is nothing like enough to provide a true income. For those who have moved to France already, believing they had a way to learn their living, this is a real problem.

Depending on their precise circumstances this is either a temporary setback whilst people rethink, usually either investing in additional property to capture more income or finding other ways of earning a living in France – which without fluent French is very difficult – or they are forced to sell their property and return to the UK.

At Les Bons Voisins we do see at first hand some very sad situations. It reminds us of a wry comment made by a commentator regarding the English cricket team’s lack of success recently – fail to prepare, and prepare to fail.

So are we saying that buying a property in France with income in mind is a silly idea? Not at all. However, you must, must, must do your research carefully and thoroughly before you commit to the idea. Don’t make a huge investment, both emotionally and financially, without having a clear idea of what you need to achieve and what you need to do to achieve it! From ‘A: area’ to ‘Z: zeros’ (of the budget) and everything in between, you must know what’s in store. Get any of these wrong could result in a very disappointing, and financially frightening, experience.

Choosing Your French Property

Apart from the obvious things such as is the property safe, easy to maintain, attractive and appealing, think about its location.
Location – how many ways can guests get to your house – ferries, airports, and the drive from the tunnel – don’t restrict yourself to relying on only one.

Location – how rural is it? Most people want peace and quiet, but sometimes aren’t used to being too far from the local shops… being able to walk to the local bakers for those early morning croissants, or stroll out to eat in the evenings and have a drink without needing to drive – priceless advantages!

Location – how close are surrounding properties – that picturesque farm next door might not appeal to your potential guests…and how much land does it have – just because you can buy so much land doesn’t mean that it’s a good idea if it’s costly to look after and ends up looking neglected!

Earning an Income from Your French Gite

The first myth, which we must dispel, is that you can make an income from a single cottage in the garden. If you have fallen in love with a small property, which may become your holiday home, then the sensible attitude is to regard any income generated from it as a total bonus.

You may be able to buy that extra delivery of logs for the fire, but even at this ‘entry level’ letting, some of that income will be swallowed by your ‘running costs’ and we don’t mean the electricity – you need local caretakers who will be on hand to fix the water heating which is bound, absolutely bound, to work perfectly all the year but cut out the minute your visitors are due to arrive. Even your very best friends borrowing the house will still expect their creature comforts.

So a true income will only be obtained if you buy or create a large, successful gîte complex or have several small quality gîtes in fairly close proximity to each other (remember those running costs!) To obtain a sensible income for a couple, then you would need 3 or 4 gîtes fitted out to a high standard.
Take off the rose coloured spectacles when you are planning this – you are planning a business. The idea of running a holiday gîte as a hobby or social interest is sure to make many harassed owners laugh.

Therefore, the business you are planning could be anything from a main residence with one letting unit through to a complex of perhaps four with some shared facilities, such as a pool, games room, and laundry room and boules court. With such facilities, it is important to carefully plan them to ensure that they can cope with the demand if all the units are full. Not least, you have to make sure you can clean each unit properly on changeover day. You must also factor in some privacy for each gîte – people booking will want to know that they have the choice of whether to mix with the other guests or relax in private.

Stand out from the Crowd

Today, you’re more likely to be successful if you offer something that is a little different. To give yourself an idea of just how much it out there, take a good look at a range of gîte-letting websites, from FrenchEntrée to Chez Nous. Click on an area that has obvious appeal, towards the south and towards the sea usually – and you will be spoilt for choice. But as well as many very good gîtes, in a market without regulations there are also many substandard properties out there. What you need to do, therefore – as some of our real life stories in this zone show – is immediately stand out from the crowd. Offer something that is far better and/or different to what is there already and you stand a far better chance of making it work. There are two ways to do this:

– your standard of accommodation

– thinking outside the box when it comes to niche markets.

Standard of Accommodation

What do you need to offer to create a truly ‘lettable’ gîte? Once upon a time a washing machine was essential, now a dishwasher is too! Some sort of ‘proper’ heating is good for those times when the climate just does not come up to expectations – and, lengthens the season for which you can advertise the property. If the property is not within 30 minutes of a beach, consider a pool. The difference it makes, cannot be overestimated. Many beautiful properties are not given a second glance because of the criteria in searching for their French holiday is a pool. And today an above-ground one does not cut the mustard. People expect one that is in the ground and nicely landscaped. A BBQ area nearby is also a good idea.

Give your property the ‘wow’ factor so it looks comfortable and a pleasure to stay in. Don’t crowd the interior with overly fussy furnishings but make sure you cover the essentials so it not only looks good but is functional too. Little things such as good quality linen, nice looking plates, cutlery and glassware will count in getting repeat business. Approach future guests like the business you hope they will become – with your head, and not with your heart. We know one gîte owner who thought people ‘should’ have French television when they come to France – but we knew, that lots of British people on holiday want to follow their favourite soap even whilst on holiday ! It may not be YOUR preference, but research your market, and pander to it.

An early sign that you are looking after the guests is to send them coherent and correct instructions on how to find your gîte. Don’t use the route you know and love – be sensible and route them to the property from the nearest main town. Tired guests arriving after a difficult journey because you routed them in via back lanes with instructions like ‘turn left at the tall hedge and then right by the abandoned caravan’ when the hedge had been cut and the caravan moved, doesn’t make for the best start to their holiday or put your gîte in the best light – and that’s before they have stepped over the threshold.

When you send them these instructions, include any warnings about local shopping hours, which are appropriate to your gîte. We had a client whose change over day was a Sunday – good for ferry costs – but the number of times guests arriving without having been warned that in rural France shopping on a Sunday afternoon is impossible meant that we routinely, as caretakers, kept a stock of essentials in our store cupboard in case the guests were ill-prepared.

Provide the house with a file of local information: start with contact details for your local caretaker and nearest doctors, dentists and emergency numbers in case of need (‘mobile phone coverage is not good here, but you will find a telephone box in the village on the right of the crossroads’) the contents of the house and how to use its equipment, (‘the oven does light, but only after continued pressure on the red button!’) on to polite requests to respect the property (‘no shoes upstairs please!’) and end with a comprehensive short list of good local amenities, shops and places of interest.

This kind of comprehensive information that your guests can read over their first (but probably not last) glass of wine, will ease them into their holiday and prevent misunderstandings which might lead to expense for you as the owner – for example, when NOT holding down the red button when lighting the oven leads to your guest complaining the oven doesn’t work.

The personal touch is also important. You or a local caretaker saying bienvenue will count more than a huge ‘welcome’ pack that may not suit your guests’ tastes. And to state the obvious – it must be spotlessly clean for the guests’ arrival.

Today, a great number bookings come from personal recommendations. Ensure your guests love their holiday with you and you have a better chance of them recommending YOUR gîte to someone else.

Niche Markets – or How to Do Something a Little Different

Yes, they do exist – honestly! For example, Rosalind Hobbs and her husband Rob first bought their holiday home in France many years ago, and in order to drag three reluctant children to the same tumbledown place in France every year on holiday, prioritised building a large swimming pool complete with landscaping. They then continued with the renovation, firstly turning the garage into their own living accommodation (one bedroom, open plan living room with kitchen area, shower and toilet opening off this), and then moving on to the main house.

They now live in the main house and had not seriously thought the small ‘garage’ gîte would become an income stream. However because they can offer a small, but luxurious, two person gîte with a private swimming pool, they are booked solidly every year from Easter to the end of September.

But note: this is a couple still resident in the UK but spending their summers in France. The income from their gîte covers their living costs in France for some of the year. If you want to explore this option as a serious income earner do the sums first – how much does it cost to put in a pool, do up a house to a luxury standard…

According to Karen Shaw of Southern Brittany Cottages, she is often asked for a four-person house with private pool. ‘It is very rare and often asked for,’ she says. ‘But it’s rare because the payback time for a heated pool with small houses, is too long to consider.’

Another possible niche is to appeal to those people with a strong interest who want to follow this on holiday as much as they do at home. This can range from artists wanting a workshop during their stay to golfers being near several good courses to immersion in the French language for part of their holiday. We know of one couple who have created a bowling green – as well as a boules court – for keen bowlers. The upkeep isn’t easy – mole alert! – And although the target audience isn’t huge they offer something that is so very different, they have consistent bookings. And from a marketing perspective, reaching their audience isn’t difficult as they mail-shot bowling clubs.

To use a business cliché – think outside the box. Why offer what thousands are already offering when you can do something no-one else, or very few, people are doing.

Set Up Costs of a French Gite

A property for your occupancy plus two gîtes may be available for as little as 300,000 euros, but a complex offering scope to run as a profit-making business will need at least four letting units and will probably cost a minimum of 500,000 euros. We have some available so look at www.lbvimmo.com for properties with business potential!

Of course you have more control over the layout – inside the properties and landscaping outside – if you buy something to renovate. However, you will need to set a realistic budget and stick to it. Remember, you will not just be spending money – you also need to carefully plan how to spend the time it will take.

Buying an existing business is also an option. You should have some idea of income potential, but you need to establish whether or not the gîtes were run well, and to establish why the owners are selling it. Owners should have notes of any repeat bookings which are an excellent indication of the gîte’s success.

Look also at how the gîtes are arranged, decorated and at the quality/appropriateness of their contents – don’t be carried away buying an existing business only to realise you intend to change so much that you should have negotiated the price lower than you have paid.

We referred earlier to some of the optimists thinking they might let a property for 50% of the year. Sadly, the true length of a ‘guaranteed’ season is the six weeks of the UK school summer holidays plus possibly a few weeks either side – most good quality gîtes, with appropriate marketing, will obtain bookings for around 10 weeks. And from mid-July to end of August, expect not only to let your property, but to frustratingly actually turn away bookings for those weeks once your property is full. That’s why one tip is instead of one property sleeping 4-6, create two units which comfortably house couples and have a much longer potential letting season…

And then there is the weather. Most gîte owners would admit that a bad summer not only affects the year in question, but will leave prospective visitors with indelible memories such that their choice the following year could well be Barbados not Brittany. Look at the local weather – we often all think the sun shines all the time in France, but there are seven distinct climates from north to south. If you make sure you mention local attractions in your advertising, then potential guests will know there are things to do on bad-weather days, and that will help them in their choice of destination.

From an accounting angle, always factor in a contingency fund, to get you through leaner times.

Another consideration is: must I rent to finance a mortgage or loan or do I only need to cover my running costs? Don’t be tempted to rely on an extended season – count on a basic season and take the rest as a bonus.

Ongoing Maintenance Costs

Factor in maintenance of the contents as well as the building. Initial kitting out of the gîte should be done as appropriately as possible but always with a view that if something is breakable, it will probably at some stage get broken – so a balance needs to be struck when sourcing the contents. Appropriate, appealing, but not expensive.

To give a practical example of what we mean, recently one couple in our network undertook the refurbishment of a property for their client, redecorating and buying appropriate contents. The budget for a three-bedroom bedroom gîte was 12,000 euros and the end result was appealing and tasteful. Their tips?

Decoration – stick to paint – easier to refresh than wallpaper and classic white walls look very “French.”

‘Carpets? Beware red wine!
Bed linen – buy easy care, and plenty of it – don’t buy expensive stuff when it may be covered frequently by sun lotion and/or hot chocolate. You can buy fresh attractive bed linen cheaply and afford to replace it. Tip for your caretaker – colour code the bedrooms – makes it very quick to change the bed linen and not get confused with dozens of white sheets!
Install simple, easy clean bathrooms – the fussier they are, the more can go wrong.’

Each autumn will be a time for assessing what needs to be done before the next season, and the winter can be swallowed up with redecoration and refurbishment to ensure the gîtes are fresh ready for the following year.

Good caretakers who operate as part of your team and deal with the day to day issues without fuss, will probably account for 20% of your rental income. They will be worth every centime! Don’t forget to factor in the tax and other social contributions that may be levied on your gîte business – consult a French accountant to check on your liability.

Marketing Your Gite

Let’s start with a few facts about tourism in France. More people go to France on holiday than to any other country in the world. The various regions of France – its fast-paced cities, traditional villages and its capital, Paris – attract a whopping 70 million visitors a year, 10 million more people than its own population. France is a mountain-lover’s paradise, with the Pyrennées in the south, the French Alps in the east (with Europe’s highest peak, Mont Blanc) and the Massif Central. Other attractions are the beaches of the French Riviera, the vineyards and rustic cuisine of Provence, the Mediterranean island of Corsica, the splendid chateaux of the Loire Valley, the French Basque resort of Biarritz and historic St. Malo in Brittany. There is scarcely an area without its special attraction.

Despite this over the past few years many gîte owners who haven’t moved with the times and provided far more sophisticated properties have had a hard time filling any more than the usually overbooked August weeks and even these are no longer guaranteed. To give yourself the best chance of filling other weeks as well as the holiday’s weeks, expect to:

– advertise in a successful company such as FrenchEntrée and in a sufficiently prominent manner to bring attention to YOUR gîte(s). Your advertising budget may be two or three times what you first thought it needed to be – expect to spend about 1,000 euros per year. Look around

– have a user-friendly website with professional standard internal and external photographs – from experience we know that the quality of the photographs can be crucial in securing a booking. Don’t bother with ‘before’ pictures as they can be off-putting – better to show just the end result (the comfortable sitting area) than the original (cow shed)! People aren’t particularly interested in your family history either. They are looking for a great place to spend their holiday so make sure that is what you focus on.

Above all make sure your marketing is true and that the property does what it says on the tin – the disappointment of a family misled by ‘clever’ wording on an advertisement has to be seen to be believed, and will certainly never gain you any repeat bookings or recommendations. We know of one gîte that was advertised with ‘open terrace to front of house’ – the open terrace was actually the road outside (the house had no land whatsoever) which for photographic purposes had been airbrushed to look like a patio and not a tarmac road.

With a single holiday home you are looking to rent out, never underestimate your own local networking. Put an attractive photo on a postcard with a short description and put these in every local shop at very little cost, with a pointer to your website. Take the description into your local doctor/dentist/garage and on the basis of their wonderful service to you, give them a discount. 10% of something is definitely worth more than 100% of nothing!

If your gite is attractively presented and your marketing is appropriate and targeted, there is still a share of this market for property owners in France! Don’t hesitate to contact me if you need any further assistance.

•With thanks to Les Bon Voisins
www.lbvfrance.com
email: [email protected]