Rental investment has been on the rise for about ten years now. The process of investing in a property in order to rent it out has many advantages. It has undergone many regulations, which have evolved to adapt to the use and demand of society and users. The new particularity concerns the seasonal rental investment, placed in the spotlight by the Airbnb platform among others. The possibility of renting out one’s main residence during one’s vacations as well as one’s secondary residence out of season has opened the way to the development of the seasonal rental investment.
Table of Contents
- What is a seasonal rental investment?
- Seasonal rental investment versus traditional rental :
- Places to invest for vacation rentals :
What is a seasonal rental investment?
Who has never rented an apartment or a house during their vacations as a family or as a couple? These properties are part of a seasonal rental investment contracted by their owners. This investment consists of investing in a property to rent it out afterward.
If you have a second home, you can decide to rent it out during the periods when you are not using it. It will obtain the LMNP status, i.e. Non-Professional Furnished Rental. To be able to rent it out in accordance with the provisions set by the law, you must also provide the tenant with a minimum of equipment so that he can sleep and eat there: bed, basic furnishings, cooking plates and refrigerator.
It is possible to choose to make a seasonal rental investment in a professional way. To do so, it is necessary to register your property with a dedicated evaluation organization. After visiting your property, the agency will give it a rating ranging from 1 to 5 stars. It will evaluate its equipment, the services offered to the customer, its accessibility and the place given to sustainable development. The classification is valid for 5 years, at the end of which the process must be repeated if you wish to keep or increase your classification.
In this case, your property will take the status of LMP, or Professional Furnished Rental. And if you add to your services the supply of breakfast, the cleaning of the premises during your stay and the supply of household linen, you will be able to access, if you apply, the status of gîte.
Seasonal rental investment versus traditional rental :
The constitution of the file :
As far as the documents to be provided are concerned, the constitution of the file differs. The seasonal rental does not require the tenant to provide documents proving his status or his solvency. There is no need to provide pay slips, proof of address, last tax return or information about a guarantor. The procedures are simplified. If you go through an internet platform, all the personal information of the tourist is filled in.
The payment of rents for a seasonal rental investment :
As far as the documents to be provided are concerned, the constitution of the file differs. The seasonal rental does not require the tenant to provide documents proving his status or his solvency. There is no need to provide pay slips, proof of address, last tax return or information about a guarantor. The procedures are simplified. If you go through an internet platform, all the personal information of the tourist is filled in.
The period of renting :
If you wish to use your apartment or house for personal needs, the classic rental requires that you give the occupant 6 months’ notice. In the case of seasonal rental, the freedom to use the apartment or house is greater. It is indeed the lessor who decides the dates when he wishes to rent the property. He rents it when it suits him: if he wishes to take advantage of his property during his vacations, it is enough to indicate that it is already occupied.
The amount of rent :
Since furnished tourist apartments are rented for short periods of time, the amount of the seasonal rental is 2 to 3 times higher than that of a classic rental. For example, renting your apartment for 1 week in Cannes during the Festival can bring in 1000 euros if it is not too far from the Croisette. This is the advantage of seasonal rental investment. However, your property is not sure to find takers every day of the year. Beware of periods without tenants.
Contact with tenants :
The contact with the tenants is often particular within the framework of a traditional hiring. They often remain distant, on the defensive even if the relationship remains courteous. The holidaymakers who enjoy your rental, on the other hand, are totally relaxed because they are on vacation! As long as they come from another country, they are open to dialogue and exchange and bring a different enrichment.
The operating budget :
On the other hand, the operating budget is more substantial in the context of a seasonal rental investment. In a classic rental, there are no cleaning or condominium charges to pay since they are included in the tenant’s dues. For a furnished tourist accommodation, the cleaning must be done between each rental, and is thus more frequent. Moreover, the risk of deterioration of the material is higher because of the various tenants who follow one another. The owner finds himself having to dip more often in his management budget.
Constraints set by the municipalities :
Finally, some municipalities require authorization when you want to rent out your second home. This requires a change of use. This authorization, which may be temporary and valid for one or two years, concerns towns located in areas of high rental tension. Cities with more than 200,000 inhabitants also tend to favor long-term rentals to avoid desertification or too much competition for their rental properties.
Places to invest for vacation rentals :
If you start from scratch, it is interesting to look for a property in tourist areas, which are always very popular depending on the season. By investing in a popular area during the vacations, you are sure to have systematic rental requests. In any case, the selected area must have activities to offer throughout the year to attract “customers”. Let’s study the locations by geographical zones for a seasonal rental investment.
Sea side :
It is the first geographical area sought after by vacationers during the spring and summer vacations, and sometimes even in the fall due to global warming. The area around the beaches always finds tenants during these periods. For an optimal position, a residence “feet in the water” will certainly be rated by tourists, i.e. giving direct access to the beach. The more it allows you to reach the beach on foot, the better the investment. If the trip to the beach is by car, the location of the seasonal rental investment should offer other activities that are easily accessible: either on site, such as a swimming pool or a playground for children; or within walking distance, such as a museum, a cathedral or a local market.
Mountain side :
Of course we immediately think of winter sports when we invest in the mountains. From this point of view, the property to look for should ideally be close to, or even if possible inside a ski resort: at the foot of the slopes or not far from the ski lifts. Be careful, however, to choose a resort that is well-known or well-frequented to be sure of being able to rent your property during the high season. It is also important to think about the interests of tourists when they travel for their vacations. Having a shopping center or a typical village offering all amenities nearby is not to be neglected. This will also allow you to promote your property outside the ski season.
City side :
Even if it seems unattractive, one should not neglect the big cities and their surroundings. Foreign tourists enjoy discovering France through its cities. In addition, workers may find themselves renting your apartment for the duration of a business trip outside of school vacation periods.
In addition, cities abound with many activities. So, when you want to enjoy a cultural getaway, putting your bags down for a weekend in the suburbs of a large city can satisfy your expectations.
For these three areas, however, it should be noted that seasonal rental investment will be quite expensive because real estate prices are often among the highest there. But fortunately, the return on investment will be there since the amount of seasonal rentals will also be high.
Country side :
It can happen that one has a tighter budget. In this case, seasonal rental investment in the countryside can offer some nice surprises. Indeed, the targets of this investment will be the inhabitants of the big cities who are looking to rest and recharge their batteries in a quiet place. Study the market and make sure to find activities not far from the property that could correspond to the expectations of city dwellers: forests for hiking or biking, lakes for fishing enthusiasts, horseback riding centers or leisure centers for children, museums or other cultural activities such as farm visits or wine tasting at a producer’s.
