Let your holiday home boost your income

With France proposing a new tax on second homes, renting out your property could be a smart financial move
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Le Manoir des Varennes et Saumur in the Loire Valley
From £1,195 a week: in the Loire Valley, moated Le Manoir des Varennes et Saumur sleeps six (0871 288 4198)

Tough times call for thrifty measures - and that applies to homes abroad. Sliding sterling rates and rising maintenance costs have made many previously reticent owners consider renting out their holiday homes for part of the year.

President Nicolas Sarkozy's announcement last week of a planned new tax on all second homes not available to rent would further increase outgoings for 200,000 Britons with French property.

If approved by France's parliament, the new levy will be introduced in January next year, meaning that all non-resident holiday home owners face a tax of 20 per cent on the theoretical rental value of their property. It comes in addition to two local taxes - taxe fonciere and taxe d'habitation - already paid by all foreign owners.

However, there is good news for homeowners looking for income. Budget-conscious holidaymakers are turning away from hotels for the cheaper option of a rental pad.

Rental website Holiday Lettings has seen demand for holiday homes increase by 20 per cent in the past year. "Difficult economic times mean holidaymakers are recognising the savings in renting cottages," says the firm's Katie Stinchcombe-Gilies. "The cost per person can be almost half of booking hotel rooms."

Listen to guests

Anna Broughton and her husband Richard paid £218,975 for a house in France's beautiful Loire Valley in 2005 and, after renovations, rent it out through lettings company Pure France. Their property, Chantepierre, is primarily a holiday home for them and their children Harrison, Holly and Charlie, 16, 13 and 11.

"We visit 10 times a year for anything from a long weekend to a fortnight," says Anna, 48. "We aim to enjoy it as much as we can, but we have school-age children and we both work full-time, so we also rent it out for about 15 weeks each year.

The income helps towards maintenance costs and mortgage interest." The family chose the Loire Valley for its rich cultural history, temperate climate, dreamy vineyards and for easy access from their Bedfordshire home.

From £2,820 a week: historic 80-acre Château Saintex in the Dordogne sleeps up to 10 (0871 288 4198)
From £2,820 a week: historic 80-acre Château Saintex in the Dordogne sleeps up to 10 (0871 288 4198)
Chantepierre is 24 miles from the tourist honey trap of Saumur and sleeps eight for a weekly rent of £700 to £1,785 depending on season.

Anna's top tips for would-be landlords are to listen to guest feedback and act on it, get good tax advice - she has to complete complicated French tax returns - and to market the property well.

"A good rental company will maximise your rental return," she adds. "Running a holiday home is hard work and won't make you rich, but the rewards are immense. You can enjoy the house yourself and know that in the future the co-objective of providing a pension income will be realised."

Demand keeps rising

Hugh Atkins of Pure France has seen rental demand increase each year since he set up the company in 2002. The company charges 11.96 per cent commission (10 per cent plus VAT) to advertise on its site, and offers 400 upmarket homes, all with pools, in the Loire Valley, Dordogne, Provence and the Languedoc. Average high-season weekly rent is £2,190 and Atkins or his business partner visit every property, rejecting 60 per cent of what they see. "French houses often don't have enough bathrooms," says Atkins. "The number one rental request is for a good bedroom-to-bathroom ratio. A house in the Languedoc with five en suite bedrooms is one of our most in-demand properties."

Cheaper on websites

Advertising on a rental website like HomeAway.co.uk or Holiday Lettings is cheaper than using a lettings company: annual charges start from £220. However, it is more labour-intensive, requiring owners to deal with enquiries, deposits and payment and manage changeover days.

Geraldine and Steve Newberry from Winchester live 20 minutes from Bergerac in the Dordogne, one of France's most established villa rental areas. They use Holiday Lettings to rent out Le Berme, a two-bedroom gîte with pool hidden in their 17-acre parkland for £359 to £610 a week.

"We are on-site to welcome guests, prepare meals when they arrive and manage any maintenance issues," says Geraldine, 53, who also gardens for absent British owners locally. "Renting is seasonal here, as winters can be very cold, but we aim to get 20 weeks each year."

What makes a perfect rental property?

Hugh Atkins of Pure France lists his tips for finding a perfect French rental property.

£656,900: four-bedroom farmhouse 25 minutes from Bergerac in the Dordogne, with gardens and a pool (020 7629 8171)
£656,900: four-bedroom farmhouse 25 minutes from Bergerac in the Dordogne, with gardens and a pool (020 7629 8171)
1. Bigger is not always better. More expensive properties don't always provide a higher return on your investment. Good news for those without mega budgets.

2. Location, location, location. It is essential to be within walking distance or a short drive of local facilities.

3. An airport. You need to be close to one. The Languedoc does well, with 10 local airports.

4. Somewhere to swim. A private pool is a must.

5. Weather. The south of France has 300 days of sunshine a year and is good for short-haul UK travellers.

6. Rooms. Choose a property with a high bedroom-to-bathroom ratio.


* Pure France (purefrance.com; 0871 288 4198)
* HomeAway (homeaway.co.uk)
* Holiday Lettings (holidaylettings.co.uk)

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