French House Burden

Meelius

Hello all. Im a newb on here so go easy on me if this aint the right place for this post!

My problem is I watched too many Place in The Sun TV shows and decided to buy a 'do-up' property in France just over 3 years ago.

I paid around 40k (Pounds) which at the time was around 60k in Euros.
The mortgage at the time worked out around £200 a month, and I reckoned on needing around another £20k to make the place habitable/desirable.

To be honset though -I overstreched myself from the start, and didnt bargian on just how much it would really cost once all the annual taxes and utilities etc have been paid.

More recently my domestic circumstances have changed. I now have a small son to support, and my partner has had to give up work, so the strain on my fairly average part time lecturers salary has become even greater.

With the amount of 'use' I have had from the property (very little -my partner wouldnt stay there in its present state) , and with the Pound now sliding against the Euro, I am really considering what to do for the best.

Here are the Options I can think of:

Option A: Try and Sell? (the market is not good at the moment and seems set to get more difficult ) and I will be losing around £15k assuming I can sell at the price I bought

Option B: Try and borrow the money to get the place to a state where it would sell for rather more, and /or possibly be able to rent it out some of the time. Trouble is Im trying to get out of debt already -not take on more.

Option C: Do Nothing. Bite the bullet and sit tight until my own finances are in better shape, and able to fund the renovation

code-a-holic

Im afraid i cant give any great advice to you - i have no experience fo owning selling houses. But my In laws bought a house in France just over a year ago with the smae plan as yours to do up and then use as a holiday home. They bought somewhere for about the same price as yours. A year on and about £20k and a pool later They have been told the property is worth at least £250k and they live out there all year round and have sold their uk property. They are retired and he is a builder so it has been different circumstances, butfor them spending some money has led to them to make a fnatstic profit, although there are no plans to ever sell and will be left to my husband and his brother one day.

I hope someone comes along with some good experience and advice and it all works out for you

curly_cabbage

i can understand you postion as i too have fallen for those "Its easy anybody can make a mint from overseas property market". we to spent £40k (equaity from our house in UK)to buy in the Andalusian mountains (Spain) near a small town called Bayerque and have been doing this property up from a shell in poor condtion to what is now just about 'stayable' with running water and bathroom .Although i see it as a learning curve and have deffinatly got the whole "Life in the sun" out of my system but, we are still saddled with this house. We are currently sorting out estate agents and hope to make a little profit and sell with in the next couple of years. I konw none of this of help but, i just wanted you to know your not the only one.

epz_2

havent the currency fluctuations helped you, i have a vauge notion that the euro is a lot stronger now so if you can sell at the same price the % change may help you(1).

that aside i think you know you need to sell so its just a case facing up to it.


(1) currency fluctuations are possibly the best reason not to do things like that since it can work the other way.

ManAtHome

If you're flogging to a european, sliding pound is working in your favour - eg 60k euros last January was £40, now it's over £43... Thought it had dropped over the last 3 years as well (sure I was getting over e1.60 to the pound 3 or 4 years ago).

Anyway, main points seem to be:
a) have you had any valuations in it's current state - seems quite a substantial drop unless it was vastly overpriced to start with.
b) can you afford to risk another £20k - renovations would have to pull the value up more than that to make it worthwhile and almost double what you think the current value is to get all your money back.
c) can you afford to keep paying out regardless - any interest charges would have to be recovered from any future price increase.
And/or "none of the above"
d) put it up for sale (a) and balance the offers against option (c) which you may end up with anyway.

Hope it works out for you (based on your assessment of option B by the way..).

beingjdc

epz wrote: »

havent the currency fluctuations helped you, i have a vauge notion that the euro is a lot stronger now so if you can sell at the same price the % change may help you(1).

that aside i think you know you need to sell so its just a case facing up to it.


(1) currency fluctuations are possibly the best reason not to do things like that since it can work the other way.

Currency fluctuation will help at sale, but if it's funded with a Euro mortgage, the repayments will be rocketing in £.

JBeau

I can appreciate how you feel. I am lucky enough to own a home in France -mortgage free. I am however midway through renovating, and at times it can seem a long and tiresome task...but we have family ties with the area and my OH is french.
Selling now will be tough - unless you discount heavily - to get rid of quick.
As British buyers dry up due to MEW drying up the main buyers will be the french. If you are in a rural area most french salaries won't hold up to the present market. You will find it very difficult to sell. I personally wouldn't throw any more money at it - especially as it is a renovation - and they are rife with unexpected problems. Sorry there are no easy answers - I would like to know what area you are in France? Good luck anyway.

sniperpenguin

Personally, I think that you should tough it out untl you have thought your options through, and spend some quality time doing research on the outcome of each of the scenarios youve spelled out.

However, why are you holding all of he burden on this? I understand you have a son to support, and I dont claim to know your circumstances but why can your partner no longer work? Is there no family to provide help / babysitting etc, or possibly she could work from home?

Generali

I'd think twice before throwing money at a duff investment. Sometimes it's better to admit you've made a mistake and move on.

Rapidly rising house prices is far from the norm in France - it's not likely that any future bubble is going to make you a profit either.

EdInvestor

JBeau wrote: »

Selling now will be tough - unless you discount heavily - to get rid of quick.As British buyers dry up due to MEW drying up the main buyers will be the french. If you are in a rural area most french salaries won't hold up to the present market.

Key factor. The UK market/MEW is likely to be quiet for the next few months but should start recovering later in the year/early next.Seems unlikely you will get anywhere selling it now, I wouldn't bother.

Is there no way you can spend a little money on it so as to get it at least up to the standard where you can use it for holidays yourselves, and perhaps rent it out to other Brits cheaply (or in return for a bit of work on it), so as to cover mortgage costs for the time being?

Do you have long school holidays?If so might be worth decamping there for a long working stay there in the summer - costs of living in France are significantly lower than here.

I'd concentrate on trying to get it to "wash its face".

gingin_2

EdInvestor wrote: »

Key factor. The UK market/MEW is likely to be quiet for the next few months but should start recovering later in the year/early next.Seems unlikely you will get anywhere selling it now, I wouldn't bother.

What information do you have to back this up? I am worried you are giving the OP false hope/ information.