More and more French expats are investing in real estate in their home country. In that case, it’s important to be very familiar with the different stages involved in investing in real estate as an expat. Between looking for suitable real estate, important points to look out for, obtaining financing and the sequence of events involved in such a project, many expats are today seeking turnkey solutions to investing in real estate. A few specifics about the key stages of real estate projects for expats.
Real Estate Projects for Expats
The first step in real estate projects for expats is, without any doubt, checking out your borrowing capacity. This is essential to be sure of being able to finance your project. A great many expats wrongly think that a good salary is enough to give them sufficient borrowing capacity.
But today, banks apply very stringent criteria to expats, classifying them as follows in increasing order of risk :
- on secondment (working under a French employment contract),
- employed by a French company working under a local employment contract (i.e. a foreign employment contract),
- employed by a foreign company working under a local employment contract,
It is, therefore, much harder (not to say hugely difficult) to obtain a loan in France to finance a real estate project when you are an entrepreneur working abroad, despite generally high salary levels.
After this, comes a detailed examination of your request. The fact is that, even if technically you can obtain a loan for your real estate project, your bank will analyse your circumstances as an expat. Amongst the criteria – salary and savings you can keep in France, personal and professional circumstances. Depending on these circumstances, the bank will grant you a loan, or not.
Looking for, and Visiting, Property
Looking for property is a critical phase, because you’re trying to find a piece of real estate that meets your criteria. You can choose to go through an estate agent, to look on private sales sites or via any other networks liable to offer properties for sale (notaries, lawyers, property networks aimed at expats, etc.).
It is important make sure you look at the physical details of the property carefully (electricity, floor, roof, plumbing, etc.), but also the financial aspects (expenses, tax, minutes of general meetings, etc.). All are issues that play a role in determining the quality of your investment in property in France.
Offer, Preliminary Sales Agreement and Financing
One you have found a property, as an expat you must then proceed with all the administrative procedures involved in buying a property : offer for sale, signing of the preliminary sales agreement, organizing financing as an expat and signing the final deed of sale once the funds have been released.
As an expat, for a real estate project it can take 3 or 4 months between signing the preliminary sales act and the final deed of sale, the latter being the day the expat becomes the owner of the property.
Renting Out and Rental Management
Once you become the owner of the property, the final stage is finding a tenant to rent the property. Here again, most expats decide on furnished rentals under medium or long-term leases. The flexibility of this status in terms of tax means it is particularly suitable for expats investing in property.
In general, therefore, an expat’s project for investing in property can be expected to take around 6 or 7 months (2 weeks for examination of the application, 1-2 months to look for a property, 3-4 months to organise financing and 1 month for the sales and acquisition processes), and even if it is possible to undertake such a property investment oneself as an expat, help and support in France is often more useful than you realise…
My Expat represents expats, organises and coordinates investments in property for expats.
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