French Gites – lifestyle or a business?
Many are attracted to buying a Gite complex by the lifestyle associated with owning a gite. Lazy days in the French sun supping a glass wine or two sitting around a pool – that will do me fine! After years of 9 to 5 and hours spent on the daily commute it appears to be an attractive option.
At 1st-for-French-Property we have seen a significant increase in the number of enquiries for this type of property over the last few years. Without doubt Gite complexes often look beautiful from a distance but you must be realistic about buying into this market. Firstly, it is a very competitive market and secondly like any business it is hard work (especially in the early years). Of course, there are many successful gite businesses, and you can buy into this market!
We are not going to cover the French bureaucracy issues but concentrate on the business issues.
Remember this is a business and your approach must be professional and commercial. You need a business plan and it must be realistic. If you are buying into an existing gite business check the accounts thoroughly – what are the trends over the last few years? Check turnover and profits especially. This is a notorious “cash in hand” trade and although the owner may imply the profits are better than declared in the accounts – buyer beware! Are staff costs included or have the present owners done all the work or used un-paid family members? Is there a lot of repeat trade? What are bookings like for the forthcoming year? What capital will be needed to be injected for renovations and maintenance?
In France, the “gite season” is typically July and August – a 10 week season! Outside this period you will have to market well – probably to foreign markets – to fill your rooms! Often a more expensive gite complex will have 4 or more rentable units so that they can maximise their earnings in the “gite season”.
Some factors – and this is by no means complete – to consider in this competitive market:
a) Location, location, location – as always this is of prime importance. Is it quiet but accessible? Close to facilities? Does it have a wow factor? Imagine you are looking for a holiday – would you like to spend a week here? What do you look for in a holiday?
b) Weather – the further South, the longer the potential season (unfortunately prices are more expensive in the South)
c) Close to a Budget Airline airport? RyanAir, FlyBe, Easyjet fly to many destinations in France and can be a source of “clients” all the year around. If you want to tap into this market you need to be no more than 30 mins to 1 hour away. Are you prepared to pick up “clients” from the airport?
d) What is your USP? Pool and chic gites are no longer enough. You need to offer something extra…..wine tours, pottery, bird-watching. Yes, research your chosen area and make it work for you.
e) Are you flexible? Instead of weekly lets – would you consider chambres d’hote, or weekend breaks in the low season?
Prices? Existing gite businesses cost from 150K euros to 1 million + euros. Before you buy research the market and property. You need to find out how much competition is in the area and what prices you can charge. The internet is an excellent source for the information you need – the regional French Tourist board web sites will tell what you what the area is like and the attractions in the region. To study the competition visit one of the many French Rental sites. For example, on 1st-for-French-Rentals there are over 1000 properties across France. You can see the popular areas quickly, the facilities the gites offer and most importantly the prices you can charge during the whole year. Often each property will have a calendar and you can see the levels of booking and the extent of bookings in the Low seasons. This will give you a clue to the potential of a gite complex. Plug the figures into your business plan – does it add up? Don’t be emotional about a property if this is going to be your income in France.
So be realistic and if you enjoy hard work, this lifestyle can be yours!