If most buyers buy here to make use of the property themselves, certain buyers look at making a good investment with the possibility of one day using the apartment themselves, for example when they retire.
As prices since 2008 have stagnated, it is return on rentals that are the focus for property investors on the French Riviera, rather than capital appreciation. I have provided indications of gross returns only, as net returns depend very much on your personal tax situation in France.
Which is the best area ?
There is no quick answer on where to find higher rental returns, and most media articles that compares the average purchase price Vs. average rental are useless, as they do not take account of the huge diversity within each town and even each street. Also the values given of between 3% and 7% gross return per annum, do not take into account occupancy level and risks of bad payers that cannot be evicted under the highly protective laws that favour of long term tenants. The cheaper the property, the higher the return, but also the higher the risk of bad payers.
As a result an option that many prefer in the touristic areas like the Cote d’Azur are seasonal rentals. For short term AirBnb type lettings, while ensuring sometimes a better return on investment than a long term rental, gives the owner the possibility of making use of the apartment during the year when the property is free.
3 types of investment opportunities
Buying a studio in Nice a few streets back from the sea front for 150K Euros, that can be rented for 10 months to a student, then for 8 weeks as a seasonal rental in July and August certainly provides the best gross returns of around 7%. But you will need to find someone to manage changeovers in a cost effective way, as agents can take up to 25% to manage the seasonal rentals.
Another possibility is an evolution of the Chambre d’Hotes concept to the AirBnB concept. Whereas the former works well in country houses, but demands a lot of work and attention, it is possible to run in a more autonomous way, rental of rooms or small self-contained flats within a larger property in towns like Nice or Cannes. A Dutch owner managed excellent returns from his villa in Nice overlooking the sea, managing bookings remotely.
Another special market for rentals is Cannes, famous not only for the smart sea front lined with luxury belle epoque hotels and its film festival, but also for its very active convention centre that attracts visitors at all times of the year. You may not have heard of MIPIM or MIDEM, but these are events held in Cannes that are known worldwide in the property and music business. Here a well chosen 1 bedroom flat close to the convention centre can provide a 6% gross return with about 60% occupancy.
How safe is the investment ?
Knowing that the fundamentals are positive in the South of France, with a steady demographic increase mainly in the Var due to the influx of wealthy sun seekers from the north of Europe, and a well preserved environment, your investment will be relatively safe from economic hazards. The sun, blue skies and restaurants can’t be moved to China, and no Frexit in view either !
If you need to pick an investment property from a large area, you are better off contacting a property finder like Smartfinder Home covering all the French Riviera than dealing with multiple agents who can only present their own portfolio of properties. We hope we can provide you that rare combination of good and fun investment !