A new way to rent a flat in France
Renting wooden studios of 18sqm
A 100% made-in-France way of renting is available. Homeowners are increasingly offering living spaces in their garden. A French company based in Montpellier established this concept in order to acquire rental income or help providing solutions for the guests to stay. It implies the construction of a wooden studio for 38,900 € and measures 18sqm. The company points out that it is a good way to avoid the need to apply to the town council for planning permission. According to Alexandre Gioffredy, the company’s managing director, the aim is “to solve two problems for people living in France today – the need to generate more income and the lack of housing. We see three uses for our studios – the first is student accommodation in large towns, the second is tourism and the third for personal use either as a granny apartment, for an older child wanting more independence or as an extra room – for example an office in the garden.” A French rental agency will deal with the administrative rental procedures which will engender an estimated rental price ranging between €400 and €700 a month for a year-long rental agreement.
French property and French mortgage attract tourists abroad
A studio was purchased in the Mediterranean resort of La Grande Motte in Hérault and it is due to be rented out at 70€ a night for three months. Of course, the rental price will be contingent upon the local market. The price tag includes delivery, construction and connection to electricity, water and sewage services – with separate counters in the studio. For now, there are only nine towns involved i.e. Bordeaux, Clermont-Ferrand, Grenoble, Lyon, Marseille, Montpellier, Nantes, Nice and Toulouse with a production pace of 20 studios monthly. Paris suburbs will soon be incurred into this new trend as many households in Paris vicinities have broad gardens.
How can these wooden studios be financed?
These studios can be financed by the mean of two loan types i.e. the mortgage and the consumer credit. The bank won’t grant a mortgage loan based on the wooden studio but the bank can finance the wooden studio through an equity released. The equity release gives you the opportunity to borrow against the value of another property. The amount which can be released mainly depends on the foreclosure value which will be calculated by the bank. The LTV (Loan To Value) often varies between 40% and 80% of the property value assessed by the bank. However, it is important to consider the fact that the property value detained by the bank is usually lower than the market value. The consumer credit amounts are between 200 € and 75 000 € and the period varies between 3 months and 7 years. Given that, in order to purchase a wooden studio, you wish to be granted a loan amounted to 40,000 €, for 10 years and at a 3% interest rate, the instalment (principal + interests) will be at 386€/month. Thus, ask the French Mortgage Expert brokers for more information about your affordability.
