Question: Dear Sir/Madam, I will be very grateful if you can explain to me the possibility of buying properties which need full repair, repair them and put them on the market for sale again, I spend a long time going through your website and there are many properties but the problem is with the right area and properties in good condition stay on the market for a long time and not selling. Could you please direct me and your advice are appreciated.
Thank you. Best Regards, Dave G.
Answer: Hi Dave, sorry for the delay in replying, I have just returned from holiday, now a long distant memory and back to work!
What you suggest is certainly possible and I know of many people that have done this and still do it. In terms of re-selling the lower value properties tend to move quicker so a typical rural 2 bed cottage with garden for resale value around 50K or so is the best target renovation project and depending on how much work you want to do you can pick up barns for 5K sometimes or ‘projects’ from anything around 10K to 30K+ etc.
The capital gains tax you will have to pay to ‘turn-over’ the projects quickly is based on the profit you make on the sale of course unless you live in each project full time during the renovations and claim it as your principal residence and therefore not subject to capital gains. Or if you really want to make a good living then you could register as a business with the activity 'Marchand de Biens’ which is basically a property developer.
I worked as a 'Maitre d’Oeuvre’ in the Pays de la Loire region of France for 12 years from 2001, basically a Project Manager renovating properties for clients and I did 5 of my own properties during that time, so it is possible to do and rewarding however I would offer a few words of caution!
Buying a run down barn or house, renovating it over time and re-selling it is not as profitable as it is in the UK where in general property prices are higher and the demand is greater. In France in my experience the margin of profit is very small in terms of the amount you tend to spend on materials and specialist artisans such as Plumbers and Electricians perhaps added to the capital outlay for the building itself tends to add up to just a little less than the final value of the property.
Going for grander sized projects would give more scope for profit but the downside is that they take longer to sell.
So in summery I know people who have made a living doing what you are suggesting but I don’t know http any of them have become very rich from the activity but if earning a living doing what you like doing is for you then the lifestyle in rural France and the experience of renovating old properties is not a bad life to lead.
Hope this helps and stay in touch, Many thanks David.
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