Are you considering investing in property or real estate but wondering if it’s still a wise choice in today’s uncertain times? Are you curious about the profitability of rental investments in the Alps? If so, you’ve come to the right place.
In this post, we’ll delve into the current landscape of property investments, exploring whether it remains the optimal choice and uncovering the potential for lucrative rental opportunities in the stunning Alpine region. As well as this, we’ll share the types of properties to keep an eye on and reveal the most promising locations for your rental property investments.
Is property still the best investment in 2023?
In times of inflation, interest rates tend to rise. This was the case at the end of 2022 and so far in 2023: interest rates are rising, loans are being reduced, the property market is slowing down and prices are rising.
As the year goes on, we should see a controlled increase in market prices throughout France. In addition, other factors will come into play: stricter lending conditions, prolonged inflation, and more stringent DPE (Diagnostic de Performance Energétique) diagnostics. At first glance, the current economic climate does not seem to be in favour of property investment.
So before you invest, you need to have an in-depth knowledge of the property market and the banking system, so that you can fully understand the borrowing conditions that will enable you to buy your property in the mountains.
However, by choosing the right destination and the right type of property, investing in property is always the most profitable and safest investment. Gareth Jefferies, estate agent at Alpine Property and an OVO Network partner, confirms: “In 2023, property probably remains one of the best options when it comes to making an investment.”
Is rental investment profitable in the Alps?
Holiday rentals thrive in the Alps, especially in well-located properties, ensuring occupancy throughout the winter season. Visitors tend to prioritise proximity to the ski slopes and easy access to hiking trails when booking, but resort amenities and tourist office activities may also influence their choice.
Summer breaks are equally sought-after, with a high likelihood of property rentals during this season. Resorts now offer an array of activities such as hiking, cycling, summer sledging, canyoning, climbing, paragliding, rafting, kayaking, and horse-riding, attracting a growing number of holidaymakers each year.
You need to bear in mind that investing in a rental property in the mountains means you will be renting it out on a seasonal basis. This means there will be slightly fewer profitable weeks in the low season. So, in order to optimise your property’s occupancy rate, it’s a good idea to look at various ways to maximise your occupancy rates all year round.
What type of property should I buy for rental investment?
Before you decide to invest in a property in the mountains as a holiday rental, you need to study the property market. That way you can easily find out what type of property is most in demand in the area where you want to invest. In this section, we’ll explore what is the most popular property in the mountains: a chalet, apartment, farmhouse to renovate, or house…
Apartments in the mountains – a wise choice
Buying an apartment in the mountains seems like a good compromise, especially as it can offer close proximity to the ski slopes.
A medium-sized apartment will attract a wider range of holidaymakers such as solo skiers, young couples, couples without children, retired people, small groups of friends, and so on. But before investing in a flat in the mountains, remember to find out how much the co-ownership charges will be.
A chalet – the more traditional investment
Chalets offer generous space, ideal for large families or groups of friends. Moreover, their wooden charm perfectly complements the mountain scenery, creating a welcoming ambiance.
These properties encourage cosy evenings by the fire, fostering quality family time. Additionally, their size allows for extra amenities like a jacuzzi, sauna, swimming pool, or children’s play area. By incorporating such features, you can enhance your rental investment, making the property more appealing and ultimately more profitable.
Should you buy a new or older property?
If you buy a property that needs renovation, the price will be more affordable than buying one new. What’s more, you’ll be able to decorate and refurbish it to suit your tastes. However, the renovation work involved will be costly, so you’ll need to take this into account when you buy.
Be careful, though: many renovation projects are undertaken on older properties, which means higher energy consumption. And it gets pretty cold in ski resorts! The materials used for renovation must be able to withstand snow, frost and dampness. In some cases, government grants and tax relief are available, but it’s a good idea to enlist the help of professionals as well. They’ll be up to date with the current legislation and will be invaluable in guiding you through your investment project and deciding which type of tax to opt for.
On the other hand, investing in a new-build property will give you a home that is very well-insulated and will comply with the most stringent environmental standards. Energy costs will be lower than in older homes, and there will be no nasty surprises. If you’re buying new, all that’s left is to take care of the decoration. And a well-decorated, well-thought-out chalet with beautiful materials will be much more attractive.
Whatever type of property you choose for your investment, you also need to take into account the costs of maintaining it.
Where should you invest in the Alps?
©Alexandre Ours – Les Saisies
The location of the property is very important when it comes to estimating the profitability of your property investment. You need to choose the best possible location. Rental yields will vary depending on the resort you choose, its selling factors and your target audience (family resort, large ski area, etc.).
Ultimately, you need to adapt your property according to the demand from holidaymakers and the location. Imagine yourself in the holidaymaker’s shoes. Ask yourself what they want when they choose their accommodation:
- Is it close to the slopes, shops and hiking trails?
- Are there entertainment and activities offered by the tourist office?
- If the property is in a remote destination, can you obtain a high classification to attract guests?
The most famous ski villages are the safest options for buying a chalet, says Gareth Jefferies. However, you need to bear in mind that the purchase price is correspondingly higher…
At the moment, concerns about global warming are making us wonder about the risk of no snow at the height of the season. So it’s important to take into account the altitude of the resort where the property is located to ensure maximum snow cover. It’s also worth finding out whether the resort has snow cannons, so that you can ski back to your accommodation.
On the other hand, smaller resorts are more affordable. They make it easier for those on a moderate budget to invest in rental property.
Which type of chalet sold best in 2022
To understand the property market over the past year, it’s important to know what type of property investors were looking for in 2022. Gareth Jefferies tells us: “The type of chalet that was the most popular in 2022 was the one offering a surface area of around 150m² and four bedrooms, for a price of about €800,000.”
At OVO Network, we appreciate that navigating the French property rental market without support is challenging, that’s why we’re here to help.
Whether you’re still searching for a property to buy, are in the midst of a renovation or are ready to launch your business, we’d love to hear from you. Our friendly team of bilingual property experts advise on property optimisation, pricing, interior design, marketing and more. Plus, we provide insights into the complexities of the financial and legal requirements.