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Investing in a Holiday Home

When it comes to secondary residences, France remains the European champion with a total of 3.3 million of them reported in 2015 all across the country. The great diversity of France’s geographical assets is probably one of the reasons for its attractiveness when buying second homes: between seas, mountains and countryside, the country is an ‘all-in-one’ that can please any holiday desires. Even if acquiring a secondary residence is often considered as an investment, it is primarily a pleasure-purchase. Indeed, most secondary homes, whether it is an apartment or a house, are dedicated to spend quality time with friends and family, in the most ideal setting. However, it is important to consider a few elements before signing for a secondary residence, in order to make sure that this investment will be a good asset.

French Riviera or the countryside ?

Firstly, it has to be highlighted that, unlike the real estate market as a whole, the secondary residence market didn’t experience the same rise. That being said, this fluctuates depending on the type of property and its location. Secondary residences located by the sea are the most popular ones among French people. The value of these properties did not decrease in recent years, and therefore remain a relatively safe investment. As such, the French Riviera, with its pine-strewn coastlines, turquoise waters and nice year-round weather, is a really safe bet.

On the other hand, it is a different picture for country homes. Usually bought by city dwellers in need of more green spaces and nature, the evolution of their value depends on a variety of factors such as their proximity to a big city, their accessibility via public transports or simply their inherent quality. As an example, over the last ten years, some real estate properties in the countryside lost from 20 to 30% of their value, while others have remained at a similar price. As for properties near mountains, they represent a niche market and do not follow the overall trend.

- Investir dans une résidence secondaire

Buying a secondary residence provides added value to inheritances

Despite the inherent additional costs of acquiring and maintaining a secondary residence, this type of purchase remains an excellent investment for the future. Secondary residence real estate is still a safe investment on a long term basis. Acquiring a holiday house or apartment is a valuable asset that the owner will be able to fully enjoy when the time comes for a deserved retreat. Also, there is the option of renting out your property when it is vacant and therefore being able to reduce the maintenance costs and other fees that have to be paid for throughout the year. 

Finally, beyond the real estate investment appeal, buying a secondary residence can be motivated by the project of a legacy for your relatives and children, so that it becomes a family home with an actual sentimental value. In the context of a gift or inheritance, the property transferred may benefit from a tax exemption of € 100,000 per parent, which considerably reduces the cost of passing it on. The purchase of a secondary residence is a long-term investment, with the logical conclusion of handing it over to future generations.

With interest rates still low and the high quality of life that comes with acquiring a property by the sea, in the mountains or in the countryside, investing in a secondary residence remains a wise project, both from an objective real estate point of view and the lifestyle that it represents.

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