Investing in a ski chalet: Where to look and what to consider?
A ski chalet can be an incredibly lucrative and worthwhile investment. You may wish to rent it out for most of the year or sporadically, fitting around your own ski holidays.
Either way, there are a few things to consider before you go ahead with your property purchase. The writers at The Luxury Ski Show share their expert advice.
Why invest in a ski chalet?
With the average person spending anywhere between £500-£2000 on their annual ski trips, a long-term investment plan could end up saving (and even making) money.
If you enjoy regular ski holidays and have the means to invest in something worthwhile, a ski chalet is an excellent choice. 90% of ski homeowners now opt to rent their property all year round, so more people are realising the potential of a ski chalet investment.
After cancelled ski seasons, the markets are especially buoyant with people looking to both sell and buy their ski homes. The pandemic has also created more demand for private accommodation, such as chalets.
The buying process
Just like buying a property anywhere, purchasing a ski chalet in France can be a complicated process. So, you need to ensure that you hire and seek the advice of the right professionals to keep you on track.
The first of these would be an estate agent who is legally and professionally certified – they should know the nuances of buying property in your chosen area and can advise you accordingly. You’ll also need a reputable, independent solicitor to guide you through the legal considerations and a mortgage advisor, who will help with choosing the right mortgage and your application.
A financial advisor in France will also be needed to fill you in on tax considerations – you’ll need to ensure that you have the right measures in place so you are not paying tax in both your home country and in France. They should also advise on any local taxes and taxes incurred during the property buying process.
When buying a property in France, a Notaire is also needed. They are a neutral party that oversee all property transactions to ensure that everything is done legally.
Having these professionals on board is essential and will mean that you have all of the financial and legal requirements in place before you pay your reservation deposit. However, they do incur costs, so make sure you know what the fees are and budget accordingly.
How much income will you generate?
It’s also a good idea to look at the rental yield in different areas, which should roughly determine how much income you could generate from your ski home. Start by looking at average rental prices over the last year and compare this to the property prices. If the properties are affordable but the yield is low, then it may not be worth the investment.
To work out yield, divide the annual rental income by the value of the property. Then, multiply this by 100 and you have the rental yield percentage.
What does your competition look like?
When choosing an area to buy your ski home, it’s worth doing some research into a range of factors, including what accommodation is currently available. Will you be competing with many other properties and hotels? Does the demand for accommodation mean that you’re likely to find clients easily?
To ensure that you can find clients and that the appeal of your property has longevity, it would also be wise to research local demographics, visitor demographics, investment in local infrastructure and general rental prices in the area. You’ll also want to get a good idea of how long the ski season lasts, whether the snowfall is reliable and if the area will appeal to tourists during the summer months.
Finding your clients
You could use an established luxury travel operator, like Consensio Chalets find clients, which is the hands-off approach and generally the easiest. The operator should deal with everything directly, meaning that you’ll have to do very little.
Using an operator isn’t for everyone though, so there’s also the option to manage everything yourself. You might consider using portals such as Airbnb, which means you would be handling enquiries, check-ins and so on. This would be more time-consuming, but for some, it is the preferred choice.
Protect your income from the currency markets
When renting out your ski home, you may be expecting to receive a fixed amount of money each month from your tenants. However, if they pay in euros and you receive the money in pounds, for example, then your income is exposed to currency fluctuations.
The currency markets fluctuate frequently and can be unpredictable, meaning that the value of your income will fluctuate. It is, therefore, wise to seek the services of a currency exchange specialist, who can put measures in place to protect your money and stop this from happening.
Luxury Ski Show Virtual Event
Do you have questions about purchasing a ski property? Hear from international snow and ski experts at The Luxury Ski Show virtual event.
The only online event of its kind, you can visit the Exhibition Hall, Lounge and Seminar Theatre all from the comfort of your sofa. The event will feature international real estate agents, lawyers, currency specialists and IFAs, among many others.
Whether you are looking for the perfect ski property, the latest mountain trends or advice from the experts, you’ll be able to find it here. Register your interest for tickets today.