Welcome to our second webinar with Frenchly.
In this replay, with guest Melissa Regan, you’ll be able to find out about expatriation to Paris, the process of buying property here, and presentations of some of the properties we sell/rent. You’ll also get our answers to the questions we’re most frequently asked.
Francky :
Hello and welcome thank you for joining us today we’re about to delve into the heart of the Parisian real estate market but before we begin, I’d like to greet our audience a warm welcome to all the readers and viewers of Frenchly the leading digital platform from American francophiles your passion for French culture and lifestyle is real it is your interest and enthusiasm that fuel events like this one it’s with great pleasure that I introduce our expert today Melissa regan from Mr agency real estate
Born in California Melissa embraced the Parisian real estate world after a career between Paris and London, driven by her passion for Art and Design, she founded eight years ago the Mr agency, an event agency that owns Parisian event venues. Mr agency real estate was born from this expertise since then, Melissa has completed transactions ranging from 400,000 to over 7 million EUR across Paris residential and Commercial. Her skills has earned her agency recognition as a relocation service provider for the French Ministry of Europe and Foreign Affairs. She is here today to share her expertise and experience with us. Hello Melissa!
Melissa :
Thank you thank you Frankie, it’s a pleasure to be with all of you today
Francky :
Thank you for being here during this one hour webinar. We will explore the Paris real estate market, one of the world’s most coveted cities. Our goal is to demystify the property buying process in Paris especially for our American audience. Melissa will provide key insights into market trends property types and neighborhoods highlighting the significant differences
between purchasing property in Paris versus the United States. Furthermore she will illuminate the invaluable role of a real estate agent in Paris and share inspiring success stories that underscore the joy and reward of owning property in the City of Lights. We will also have a Q&A session where Melissa will answer your questions. I encourage you to send them throughout the session, the Parisian real estate market Melissa you have our full attention.
Melissa :
Great well Frankie thank you so much again for welcoming me today, this is actually the second time I participated with you guys and it has been an honor actually since last year to have helped many people who have come from Frenchly successfully by real estate actually here in Paris so it’s wonderful. Let me just share my presentation so we can get delve directly in.
Francky :
And in the meantime I say hi to Elizabeth who just raised her hand Elizabeth you will have a chance to ask a question to Melissa in the last 10 15 minutes of this webinar.
Melissa :
With pleasure! okay so let’s dive directly into it! So Frankie you did a great job for introducing myself and thank you so much. Mr agency real estate as you said was born off of our events agency which was founded in 2016 where we own and operate event venues in Paris. So as a foreigner myself here buying, selling, renting and breaking leases led me to have a plethora of experience that is vital and that allows us,me and my team to really help foreigners successfully install in France. So we are accredited with the French Ministry of Europe and Foreign Affairs for welcome to the French Tech. So as a relocation provider we work obviously with French people as well but really 70% of our clientele is international so we are a multilingual team and we help clients from Asia to Americas Europe and to the Middle East. Just in 2023 alone our agency experienced 54% growth so that’s pretty incredible in a time that actually the market has really been contracting a little bit more so that’s something that myself and our team were really proud of our services. So what do we do, one we property hunt, so this means that we exclusively represent a client. On the French Market meaning that in one point of contact you can have access to the whole market so basically, instead of having to go through, you know, 20 different agencies people that don’t call you back obviously with a language barrier. Also you know you have a onstop shop of someone and a team who is, you know, working for you daily.
Okay so that’s the property hunting side we do property sales as well so you know you might even be a foreign owner already and looking maybe to transition out of your actual property or into a new or you know your personal situation may have changed so that’s something that we can do and we do that in a very efficient and professional manner, handling of course all the paperwork legalities visits you know and ensure that you get the top dollar for your property.
And the third part of our service is relocation so we’ve had this really across the board one under welcome to the French Tech, so a lot of Tech professionals but you know again just leads and people who’ve contacted us out of the blue with different stories, people who are taking maybe a break from their personal career and they want to do the cor blue so that means that they would be looking to rent an apartment for a year or more and the rental market is a very Fierce and competitive market so basically you know we take into hand the client take into account their file and we defend our client in order to assure that they can get into the apartment that they want.
Francky :
Okay when you say Fierce it means that the demand is higher than the offer and so you have to fight for your clients in order to get the apartment they want ?
Melissa :
Oh yeah it is, the demand is much higher so you know apartments are rented typically it can be the same day or within a certain number of days and if the property is you know, well positioned on characteristics price location basically you know there could be 10 applicants for that same property so you know we cannot ensure at 100% that you know just working with us your client will you know, you’ll be insured to have it but we can ensure that you will be in the top two considered, then obviously the final choice is up to the owner who might prefer a retiree or a family profile you know that we can’t control but we can really ensure that we get you to that top top final selection. And just to mention on that this is something that we can do in your presence or virtually also so you know we can do virtual visits, we’ve relocated people who haven’t even made it to Paris yet and that means that when they come in, they’re already in their apartment which is wonderful to see.
Francky :
And you have the Vision Pro from Apple now to even optimize very soon this experience, this virtual experience
Melissa :
Exactly but we’re on the ground for you and with you also so. So now let’s get a little bit into the market, obviously if you again are looking to invest in a Pied-à-terre or you know even rent you want to know what’s going on currently, is it a good time you know what do you read in the news there has been a slight softening in prices in 2023 across the board, but again when we look at the past 10 years, property value in Paris has risen 29%. I personally am invested here this is I think a very safe investment you know we never see a drop like you would in the US. It’s not quite as elastic as that so you know even the slight softening it’s been slight and it hasn’t been so applicable to the very high-end Market you know we’re still seeing certain Apartments going for up to 45,000 Euros per square meter so that market just is a little bit untouchable.
So current prices, how much would it cost you to now get into these different neighborhoods, so what we’ve done is I assume that everyone who’s connected with us today knows that Paris has 20 arrondissements going around like the snail, we’ve just picked up a few of the key neighborhoods that are typically ideal for foreigners.
So first, third, Sixth and eight and you can look at the prices vary here. These are notorial prices so they don’t take into account unique features, they don’t take into account views, ceiling, heights so it’s not necessarily representative of what you would be looking for but it’s good figures to have we thought a few little random facts would be interesting for you also that 17% of foreign buyers are investing in the fourth so that’s the Marais area, 16% in the third so the marais is you can see it on the map here it, they touch each other and they’re both considered marais, one is the haut marais and the marais centre. 4,9%in the 12th that was a bit surprising actually for us even and we’re also seeing you know that buyers from the US account for 25% of the non-resident purchases in Paris, so like myself we are quite a few over here.
Francky :
I’m gonna screenshot that last sentence it’s amazing
Melissa :
Yeah isn’t that a good one ?
Francky :
Yes
Melissa :
Okay there we go, when we talk about the market it’s definitely important to talk about interest rates, we’ll get to this later on in the presentation also when we get on to financing and if foreigners can get access to financing but we bring it up here because it does affect obviously the market.
You know even if you look at rates compared to the US you even see 4.5 to be the high point and that seems pretty incredible based on what we have on the other side of the pond but you see the softening and prices obviously is a reflection of interest rates increasing, interest rates are going to begin softening and going down in Q2 we’ve actually already started to see that a little bit but towards the end of the year it’s going to continue to improve I mean that’s what’s forecasted so that also is going to stabilize and then start bringing up the actual market prices
How to buy property in France? So what we’ve done is we’ve really defined a checklist which makes the process understandable and smooth so I’m going to get directly into it on defining your needs so it sounds silly but you know, the basics, how many rooms do you need does your lifestyle mean that you want to have guests over, do you need a large dining room, number of bathrooms as probably some of you know, toilets are a little bit less common in all rooms or in all bathrooms in France you know, you could have a 200 square meter apartment with one toilet these are things to consider. Laundry room also are quite rare they can be found in the kitchens, so you know to have this in mind before you go into the process and to know what would be your non-negotiable criteria, same thing, do you travel frequently in and out obviously an elevator is going to be important and then you might have ideas of certain neighborhoods that you visited in the past that you love and then based on your profile, we can also help recommend areas of Paris that we think would be good for you. In the 16th you’re going to get larger spaces if you’re a millennium on your own you probably want to be in a lively area, so Francky we’re gonna ask a question ?
Francky :
Yeah no no, this need assessment is key, it’s the foundation right ?
Melissa :
It is the foundation because sometimes you know even clients contact us and they say “I’m looking for X Y and Z” so we go forward looking for X Y and Z and they haven’t gone through you know the base criteria, so yes we really want to always work with you on defining this.
Employ a property Hunter. So you know you can do it alone but we see high value in using a property Hunter. So one it’s just really having one point of contact and being able to ensure that
all options are brought to you so both on and off market, we have access to both we work with all the major agencies and with-
Francky :
Sorry to interrupt but when you mentioned scan the market and you said that you can also do it on your own it’s very important for our American friends to understand that there is no MLS equivalent in France where you can get all this information. they might think that there there is a database when you enter the number of room the square footage and everything and you get the listings it doesn’t work that way, that doesn’t exist in France so to do it on your own is pretty complicated
Melissa :
it is, it’s complicated and with all due respect to the people we work with, people are also not quite as responsive over here in the way that we’re used to in the US so you know it’s very frequent that you put calls in you might be interested in seeing a property and people do not call you back, it’s pretty wild. The thing that I always really say to to clients also is that you know if you’re representing just one property that means that you’re pushing that property to the client, using an independent property Hunter means that you know we have your interest in mind, it’s irrelevant if you end up choosing a option A B or C but it’s to find the best option for you so that’s really important for us. And in this we obviously organize virtual and on-site visits um we typically have clients will come in for you know 48 hours they’re going to spend two days to book all that back to back and efficiently use your time so it’s important.
Then we handle obviously the negotiation and putting in a legally binding offer on your behalf and then we ensure a secure purchase so, the due diligence that is done by the agency at the agency level and then we’ll get to the next step of the diligence that is done at the notorial level.
And Market costs for a property Hunter so again these are not just even our fees they’re just across the board, range from 2.5 to 4% of the net seller price.
Francky :
Yeah very nice, I love this Eiffel Tower, The View with the Eiffel Tower I’m sure you have to pay for a view like that extra
Melissa :
You do but we’ll get into a few selection of properties to give you some ideas of how much that would cost.
The importance of a notary. So this is something that we don’t have in the United States. A notary is basically an accredited lawyer recognized by the government who oversees the sale of property. So both the buyer and the seller should be represented by a notary.
Can you buy property without going through a notary? You technically could, I would never allow someone to do that, there’s probably about 2 maybe 1.5% of overall transactions in France that do not go through a notary but, you lose all protection and don’t do that ever please, take my advice do not ever go into someone’s agency and say “oh I’ll sign there” don’t please don’t.
Francky :
You think you’re saving money but you’re actually taking a huge risk.
Melissa :
A huge risk and what’s interesting to know too is that notaries as it’s recognized by the government, all the fees are the same so it’s not a question that one costs, more than the other, they actually all cost the same but you can have a good notary and you can have a bad notary. And notary is there to protect you, it’s to confirm that actually the seller is the seller it’s also to confirm that there aren’t leans on the property it’s to confirm that any renovation that was done by the previous owners even several transactions back was done with the required authorizations, so you know if you become an owner of a property that has not gone through this due diligence process I mean it’s just it’s a huge risk to you.
And then what they do at end is obviously they authenticate the title transfer. So we have really great relationships with several notarial firms that we work with over here.
Explore local financing options. So this is always the question you know I’m American or I’m South American you know wherever you’re from, can I obtain financing in France ? A lot of times you’re going to hear no, that’s not exactly true, you can but it works very differently than in the United States for example. You know in the United States the burden is on you to reimburse so you know again, they give loans much more freely, over here it’s a much more thorough process and loans are given out with more restrictions.
Another thing to note here that is kind of a side and we have an article actually about this on our website in the blog section is creating a real estate holding company so it’s actually creating a company that would hold the property. it’s called an “SCI” and what can be interesting, there’s several different reasons and case scenarios that this could be interesting and I’m happy to talk to people directly after this or set up a call next week. One can also be for financing Solutions because maybe you are American but if you create a French real estate holding company then the borrower, the lender is French even though you have foreign shareholders
The closing process. So the process is everything very different over here, it’s a two-step process so it’s a promiser note which is signed with and at the notary and then the final deed and between the two it’s approximately three months time lap between the two. So the promissary note is legally binding, so it binds the seller to sell to you no matter what, so even if the seller has a better offer a month later even double the price the seller is legally obliged to sell to you. You, as the buyer are required to put in an escrow account between 5 and 10% of the purchase of the property price at the signing of the promissary note and that you are liable for 10% that would go to the owner in the case that you would choose to walk away. So you as the buyer you cannot be forced to go through to the final deed but if you choose not to ,then you would lose the 10% but the seller has no choice and even if the seller was to for example pass away their children would be still forced to sell to you. You had a question Francky ?
Francky :
Yeah a word about “condition suspensive” at this point ?
Melissa :
Very good to bring up, so condition suspensive is if you put a loan contingency in your offer and in the promissary note which means that if you were then if you tried to obtain financing and you were refused by two different financial institutions then that would get you basically out of your 10% engagement but I must say that in today’s world sellers are not accepting to offers with financial conditioning so sellers only want to sell to buyers who are willing to you know to commit and are sure that they’re going to be able to go through to the end so and especially even with an international client you know it’s very challenging to negotiate that in these days. What else is important to bring up, taxes so there are taxes and legal fees so notaries and taxes they’re actually calculated, it’s a very complex complicate calculation and it’s actually done by the notary, it takes into account even you know the year, the building was built, so it’s very complex but basically they’re always approximately 7% so you need to take that into account in addition to the prices that you know the actual listing price.
After that we get to the checklist make and so you’ll become an owner, make any necessary Renovations so if you choose to work with an architect, standard fees on that are 20% of the total renovation costs. Renovation costs really can vary but just to give you an idea it could be you know 2,500 per square meter up to 10,000 per square meter so we typically see a lot of our clients interested in properties that have already been renovated but we also are working with clients who are going forward with a full renovation over here and we’re going to get to that on an example on the success story and we do have close relationship contractors, architects interior, designers, if this would be something you would want to do basically we can oversee that process and put you in contact with several people to consider and then choose who you would want to work with. So now that we’ve gone through the checklist of how to become a property owner we wanted to share some a selection of properties so for sale and for rent to kind of get an idea of again what we could offer to you and also what do you get for 3-4 million on Avenue Kléber for example.
Francky :
I can see that I mean two bedrooms for almost 1,400 Square Feet those are huge rooms right ?
Melissa :
Yeah, I mean these are very high-end properties. I mean this is according to the space that we as Americans are used to I mean these are properties that have been fully renovated, they have air conditioning, heated floors, really all the amenities that you would need to be comfortable and live the Parisian dream.
Francky :
So the 16th arrondissement is pretty known for these type of apartments in particular.
Melissa :
Yeah it is, you know, this is parquet, moulures, cheminée, very French style, renovated but respecting that French heritage and Avenue Kléber is a major Avenue that goes from Trocadéro to l’Etoile, Central you’re close to museums get around quickly and it’s also quite residential so it’s safe clean comfortable.
Francky :
Avenue Kléber for our viewers who don’t know very well Paris starts from The Arc de Triomphe from l’Etoile which is pretty prestigious.
Melissa :
Here is another very prestigious property. This is Avenue Rapp in the 7th, so the 7th is very close to Champ de Mars so a very large Park where the Eiffel Tower is, here you have large Open Spaces on Avenue Rapp there’s even a market several days a week so you can come down and do your shopping. This is a turnkey property so what that means is it’s both renovated furnished and you basically can just come in and put down your toothbrush so it’s fully renovated it even comes with a concierge service for one year and everything is guaranteed
for 10 years, if there was a plumbing problem, if there was something, you’re under warranty so it’s such safe investment but it’s also safe for you you know you’re not going to have to deal with problems.
Francky :
Is that stairs that I see on the up ?
Melissa :
Yeah and this is very unique because typically parisian apartments are on one level so this is a duplex so that was also one of the reasons we wanted to show you that.
Francky :
The terminology duplex in French is different from duplex in the US right Melissa ?
Melissa :
Oh you know what Frankie, what does it mean in the US now ?
Francky :
I’ve been too long in the US and you’ve been too long in Paris basically the thing is a duplex in the US here if you see an ad for duplex it means that you have one of the two, it’s two independent units you have one at first floor and one at the second floor. When you see in Paris duplex it means that the same unit has two levels which is quite amazing, Avenue Rapp is a fantastic place it’s incredible.
Melissa :
I mean in this property again we could only show you a few photos but it’s it’s a little bit Heaven on Parisian Earth. Here we’ve also shown a smaller property that has been fully renovated but where the client would be able to do your own decoration You’ be able to buy your own Furniture so this is 818 square feet, two bedrooms 1.45M, you see the open kitchen, beautiful and this is a great neighborhood, this is lively but you’re not on one of the two busy streets you’re in the Marais District, this is an incredible smaller pied-à-terre there, but two bedrooms you know fine for a family fine for quite a few. This is the last property we wanted to show you for sale, rue Jean jacques Rousseau. Francky do you know you’re familiar with rue jean jacques rousseau ?
Francky :
No I don’t see where this one is located
Melissa :
It’s in the first very close to Gallery Vivienne. So this is renovated and furnished, this is also where you have Christian Louboutin store, his first store in Paris, Christian Louboutin actually even has his office in this building. You’re in the center, you’re directly in the center, 1st arrondissement, everything’s accessible, very close to the Louvre for example.
And we also wanted to show you some properties for rent, so for lease, this is a beautiful parquet, moulures, cheminée, in the 8th arrondissement, rue Clément Marot so this is considered to be in the Golden Triangle and the Golden Triangle in Paris is the area between Georges V, Avenue Montaigne and Champs Elysees so this a very safe neighborhood close to lots of restaurants, shopping and I thought that this was a great value for price also that beautiful fireplace.
Okay and here’s an example of another property in the 6th, so rue Madame, 95 square meters two bedrooms and 5,340/months. So it gives you an idea of how much it would cost if you were to rent. I will take the opportunity here to tell you a little bit more about that so you know when you do rent it is actually quite expensive to get in so you do need to have that in mind typically they’re going to ask for either upfront payment for 6 or even 12 months or we get you registered for an insurance policy which we can then give to the owner if ever there’s payment default they can go to that insurer in order to get paid but there’s a fee associated with that so don’t just look at the 5,300 and think oh great you know there are really some upfront costs and we were happy to do a more thorough analysis for anyone who’d be interested.
Francky if you’re ready I think I was just going to now talk a little bit about some of our success stories and some of the clients we’ve been able to help does that work for you ?
Francky :
Beautiful and we are right in the heart of les tuileries here
Melissa:
Yes so 1st you know the 1st is great it’s also where our office is on rue Saint Honoré. So this is an interesting case scenario because this is a high level professional in the fashion industry who was taking a major job at Loewe which is a part of the lvmh group and they had actually already contracted a relocation company for this gentleman and he was not happy with the services that he was getting and Via a client that we previously helped he came to us and Loewe and Louis Vuitton agreed to pay twice for his relocation services and we were able to house him. So this is the apartment that he chose and to give you an idea, oh we didn’t put the price. Okay well to give you an idea of just you know 90 square meters look at these beautiful high ceilings the beautiful parquet you know these are the types of properties that we really can access on a regular basis and actually thanks to the experience we have with Carmine we are now on an exclusive contract with Loewe and lvmh for their relocation services so that it’s been great.
I know that you guys are really a residential focus the people we have probably connected with us today but just to do show that we really do we do commercial also so this we recently installed a client in a beautiful commercial office building 441 square meters so you know this we can assist with too this was one of the biggest transactions of the beginning of the year here in Paris. This was a property that was rented out of 1,200 per square meter per year that’s like the top end of the rental market for commercial space so that was a pretty important one for us.
And so this rue Jean Jacques rousseau where we saw the property for sale we actually have already sold a property in that same building. And this was a wonderful story anjade a Charming client who is French but who has been living in the United States for over 20 years very high level with vancliff and she wanted to buy a pied-à-terre so we secured a property for her that was actually even off market and it just to show the difference in range of what we can do, 34 square meters so 397 squares feet you know very small there isn’t a question of too big or too small you know we were here to really serve the right client so we can help you, don’t think that you have to have 200 square meters or x amount of budget to be able to work with us.
Francky :
Very interesting, that give us the range of the apartments that you can propose to your clientele.
Melissa :
Yeah oh and here in this photo you can see the Christian Louboutin Store so this is charming area.
This is an interesting success story also, so this is two individuals actually that are Thai but that live in the United States for I guess for probably 20 or 30 years and it was quite interesting they were here in Paris on a trip and they loved the area that they were staying which is in the 15th these tours that are these large buildings that are a little bit more uncommon here in in Paris and they love stay in them and so they talked to the concierge of the building and asked how could we buy something here. So they visited a property and then went back to the United States but didn’t know what to do next and they reached out to me and and to us and we assisted them even though had they had already identified the property that they wanted.
We then took it over from there so meaning drafting the lease, negotiating with the seller and the listing agent and we’re right now about to close so we also were able to even obtain financing for them locally to just for financial optimization and they are going full in, they’re going to go on a huge renovation everything needs to be redone and actually our company is going to be managing that project with them. So we’ve brought in several contractors to do the bids, we will be stopping by the property on a weekly basis once the renovation starts in order to be able to follow it from a distance and to know that there’s again an independent party, they’re defending their interests.
Francky :
All of that will be done while they’re still in the US ?
Melissa :
Yeah so they’re gonna come over they’re actually gonna come over for the signing of the of the final deed and we’re going to do you know several days of appointments of looking at samples and all these different things and then from that you know they’re going back. So we thought it was interesting to show just what we can do in that respect. So Francky you brought to my attention some of the frequently asked questions that you guys have gotten which are quite parallel to what we’ve gotten also so we definitely want to open this up and and receive your questions on live but we already wanted to go into some of the responses that you’re all waiting for so Francky can I continue going from here?
Francky :
Yes please just before you do that you know t the apartment that that you showed before with the renovation, I just want to mention that Randall just wrote “it would be nice to see a before and after of the project”, I’m sure you’re going to take pictures like you know that makeover I don’t remember that you know that TV show before and after that would be nice to see that
Melissa :
That would be great and I please email me and I will send them to you the photos we have them before we were trying to include them on the slide but they’re so bad we couldn’t
Francky :
It would be nice when you have the before and after yes
Melissa :
Yes but it’s incredible this picture that you see here is taken from the window so look at the view they have
Francky :
Yes beautiful, you know you know not too far from there you could see the Statue of Liberty and not all the people know that
Melissa :
Yes I know hat there’s a Statue of Liberty here in Paris also yes it is it’s very close down there. Okay so let’s get some questions so “can I rent my property on Airbnb?” “are the Summer Olympics affecting the real estate market? ” and “renovation what is allowed and what is not as a property owner?”. So we wanted to first get into this. So there are three different case scenarios that allow you to rent out Airbnb or type Airbnb. So one is if the property is your primary residence, so if it’s your primary residence you can rent for up to 120 days per year okay you still have to declare it to the Mairie as a furnace tourism and you actually get a number but then if you’re on Airbnb for example it’s going to just block you after the 120 days.
Francky :
And it’s not restricted in some neighborhoods or buildings ?
Melissa :
So I was going to go through this and then but I’ll say it now. So these are the rules but then you still have to check the particularities of the building because there could be a règlement de copropriété, so this is like building rules and the building could forbid it so you do still need to look at this. So as a secondary resident you’re allowed to rent on an annual basis but not a daily basis, so actually you can’t do like Airbnb. And then the third scenario is actually if there’s a commercial zoning. So it does exist to have an apartment that has a commercial zoning so these are the types of things that we can check for you also.
Okay and another question we get a lot is how are the Olympics affecting real estate ? So I definitely want to say not as much as expected, we’ve seen that the long-term residential rental supply has decreased because some owners are hoping to rent for example on Airbnb or on a short-term basis at higher prices, so they’ve taken those properties off that long-term Market but it it is important to note that as of February, only 25% of the Airbnb type Market is rented out for the Olympics so it’s we’re waiting for that big Surge and there’s definitely question of if that’s going to be coming as we had hoped. But on a long-term basis the infrastructure improvements that are being done in the city are going to have a lasting positive effect to property owners so you know I’m definitely looking to the long-term perspective there. Francky do you have anything else to add on on the Olympic topic ?
Francky :
No no you know it’s interesting not as much as expected when I remember the craziness six months ago about everyone in Paris who were expecting to rent their apartment three four five times the usual price I mean it has to adjust to reality at some point of time. So for my understanding people who want to rent are waiting and on both sides there is like a waiting Gap right and when it’s gonna happen you’re gonna have the Trend
Melissa :
The real Trend so this is on the rental side on actual the the property sale and purchase it hasn’t had effect, I mean we we haven’t seen any. So next so what is allowed and what is not allowed as a property owner is kind of some of the common renovation questions, so air conditioning, additional toilets, you know what do you actually have to ask for authorization for. So air conditioning that’s the same thing you have to really look at the building “règlement de coproriété”, if it hasn’t been installed before you actually have to make a request to the building so it means that your co-owners in the building have to approve you doing it so you can’t just buy a unit and stick it outside your window and say “perfect”.
So really has to be done legally and that’s a major point and sometimes also when during the promisory note of a drafting of a sale, we see that maybe an air conditioning was installed without authorization so this is a really important point. Same thing with toilets, again apartments are in a building and the actual “eaux usées”, so it means the used water is common so it means that you have major big pipes going down you know on several different parts inside a building that collect all the different toilets so you can’t just necessarily decide to put in a toilet where you want.
So this is a really key thing to look at especially when you’re visiting properties if that’s one of your key criteria to really understand what is and isn’t possible.
Francky :
What do you do when you realize when you about to sign that air conditioning or additional toilet have been installed without the proper authorization,what do you have to do as the upcoming the new owner ?
Melissa :
Well typically the sale falls through I mean in a lot of instances the sales falls through I mean one it does show that the seller were withholding information so you know dishonesty and uand then you have to see if if you can possibly make a request to regulate that like you know to “faire la demande”, ask afterwards but typically deals fall through for those kind of reasons.
Francky :
Okay
Melissa :
But again I mean that’s one of the reasons of why we recommend to work with a professional like ourselves or property Hunter to ensure that you don’t get into that situation. And then the last point in here is, imagine you have your new apartment you want to maybe paint or you want to change where the kitchen is installed do you have to ask for a permit to do that or do you have to even ask the building permission ?
So a lot of cases is no, so no in order to paint to change where the kitchen is installed, you are free to make the renovation inside your apartment as you would desire, if you were to take out a structural wall you have to make sure that that’s done with a dlpg architect and then it’s done with a replacing beam but again you don’t need authorization for that either. And then there’s some things that do such as installing a toilet if you were going to use a different “colonne” of the building and or air conditioning those are good examples and that’s what I prepared for you guys today !
Francky :
Beautiful we’re gonna leave that slide so everyone can either use the QR code or write down all the necessary informations to contact you with the specific demands and that’s great I wanted to ask you a few questions we still have some time, Elie is asking, she’s retired, and she wants to know can someone who retired obtain a loan ? She heard that over 60 in France you cannot obtain a mortgage, is that true ?
Melissa :
Again, it really depends on your specific situation. Unfortunately it’s like a lot of parts of the world you know, the more you have the more you can get a loan, just because you’re retired and just because you’re 60 doesn’t necessarily mean that you can’t get financing but it’s going to really depend on your Global financial situation. But it definitely will be more challenging
if you don’t have a revenue stream than if you do, so if you’re no longer working but again it depends, we’re happy to set up a call and to look at that in detail with you.
Francky :
Question, what are the annual carrying costs associated with owning a pied-à-terre in Paris and how are they calculated. I’m sure it depends on the pied-à-terre itself right ?
Melissa :
That’s a great question though. Obviously it’s the initial investment and then how much is the property going to cost you on an annual basis very important so there’s a few different things so one is you do have property tax, it’s an annual tax, it’s much less compared to in the US and those are figures that are disclosed actually even as you visit properties so the last year’s property tax that’s known to you and they typically don’t change very much I mean there might be slight inflationary adjustments but you know they never double.
So that information you have, the other is the common charges of the building. So for example cleaning, the electricity in the hallways, taking out the garbage, so these are common charges and the same these are also disclosed at the time of purchase even before purchase even when you visit so these costs you know them and so when you go into a transaction such as this you have all of that information. What else can I say about that…
Francky :
The yearly property taxes once again usually how much is that Fred is asking ?
Melissa :
Well I can’t give you a figure because it depends on the size of the property, the address,
Francky :
Not a percentage like in the US ?
Melissa :
No no it’s not a percentage and what’s interesting too is that it’s there’s no relation to the taxes you would pay based on you as the owner, they’re solely attached to that actual property so it’s not if you have a higher revenue stream that you have higher taxes on that property
Francky :
Randall is asking if there is an equivalent to HOA’S ?
Melissa :
HOA, what is HOA ?
Francky :
I think it’s “Home Owner Association” if I’m right
Melissa :
Okay so this is similar to what the “copropriété” is so basically when you’re in a building there’s an outside company which is called a “syndic” that actually manages the company and all the co-owners are part of that Association so it is similar to a home owners association, when you live in a community basically in your building so you would make choices together and vote upon if you were going to redo the roof of the building or repaint the entry so it’s similar yes
Francky :
Next one is another question it’s Anila who’s writing “Melissa I would like to work with you how can I, I’m a realtor in Florida so Anila we invite you to get in touch with Melissa and discuss it further
Melissa :
Let’s do it !
Francky :
Can you briefly discuss the condo fees seen on listings I’m reading it, as it’s written, it’s from Katherine
Melissa :
Okay so the condo fees, so just to have an idea of how much does it cost in the building charges correct ?
Francky :
Right
Melissa :
Okay well again I mean they are variable so I don’t want to quote a specific figure because it depends if there’s a concierge for example in the building, it depends on how many apartments there are in that actual building you know clearly if you’re in a building that has a concierge uand that has only three apartments in the whole building then you’re going to have higher expenses than for example if there’s 25 and no concierge. But just to give you a range, they can vary from 200 per month up until maybe 800 would be the very top top top of the market
Francky :
Okay I have two questions that actually are pretty much the same do I need a visa to stay in a second home in France and what are the visa requirements for longer stays ? And Sarah is asking is there a limitation on how much time per year one may stay in France if one buys a property ?
Melissa :
These are great questions and actually we just published an article on frenchly recently so maybe you can share that link Frankie and in that article on the bottom we actually talk about this but I’m happy to respond also. To be a property owner you do not need to have a Visa so you just as a foreign National can buy property then you have to adhere to the same standards as traveling here. So you can stay for up to three months.
Again we work with a broker you’re going to share all of your financials so you know your tax returns the different holdings you may have in the US or globally I’m involved in that conversation also when we look at what we think of your case scenario then the broker can supply a letter of comfort so giving you an idea of what you should be able to obtain but this is really important to note is that no financial institution can actually make a loan offer until you have signed the promissary note so it’s actually with that document of the promissary note that the bank can actually look at it and say yes or no we go forward.
But again the goal is to put you in a success situation so that you knew mutually we would be pretty much sure that you could obtain it if that’s where you were going.
Francky :
SCI could be a solution ?
Melissa :
Well I did mention before so SCI so it’s a real estate holding company there could be definitely different case scenarios of why it would be applicable and a solution possibly for you one could be in the case for example that you were a family so imagine that maybe one of the children was studying or coming to France in and out and really wanted to be present but possibly that it’s parents that have a stronger financial situation and it’s based on the parents for example that would maybe be able to obtain financing. Well a possible solution for that would then to be create an SCI holding company where both the child and the parent could be shareholders inside meaning that they could benefit from the financial stability of the parents but then the you know the children would already become an owner and it helps also in succession so we have a whole article on this on our website.
So that’s one and the other one which I mentioned during the presentation is you know myself as an American there’s many banks that cannot lend to Melissa Regan however they’ve been able to lend to the SCI structures I’ve created because the SCI structure is considered French
Francky :
Beautiful, RH is asking what is the minimum duration of a short term lease
Melissa :
Okay very good question, there’s a few different parts of the rental market so the long-term rental market would be considered the unfurnished three year long lease and this is a lease that basically could keep rolling and you could stay in for life.This is not really open to foreigners, the people that can obtain this are really French employees, you have to be an employee basically, then the second is what we would call an annual lease so a year-long lease and it would be a “bail de code civil”, so this is the most typical for foreigners and it could be one year and it could automatically roll I mean you could stay as long as the owner and you mutually agree but it’s typically one year. Under one year it’s a different market. So under one year there’s another zone which is kind of between Airbnb and then between the long-term market so it means if it’s six months you the prices are going to be higher than on a long term basis. So you’re going to see that reflected in the prices.
Francky :
All right, we have time for maybe a couple of last questions but I have the feeling that you answered already during that webinar but maybe just to come back like a few seconds what are the benefits of employing a property Hunter when looking for property in France ?
I think you gave us the the answer but if you want to say a few additional words or summarize the main benefits
Melissa :
I would be happy to, well the most important is that you have a company and a person working for your interests so in order to navigate the market locally, identify properties that are really adapted to what you’re looking for and your needs and having someone on the ground on a full-time basis. So probably as many of you know even in your perspective cities that you live in, finding the ideal property is a full-time job and then in addition with the language and cultural differences it’s very challenging and it means that we’re here for your interests so we can bring you to really everything there is from all the major agencies, from the small neighborhood agencies, from the opportunities that could be off market and you have someone working for you.
Francky :
Last question is tax related, how is the tax rate determined for the sell of a second home in France and are there ways to minimize or avoid certain taxes ? We’re now in the scenario of someone who already has a home and who wants to sell it apparently.
Melissa :
Okay so again the exact taxes that you will pay will be calculated actually by the notary so that’s something that you can even do if you’re a property owner you want to see what it would be. In that same article also Francky that we just recently published on frenchly there’s a little note about that too so maybe t the person who’s asked could take a look at it. For primary it’s actually degressive over time but the property you need to have it for your primary residence for more than six months for it to be considered your primary and the longer that you hold the property the less taxes you pay okay so it’s degressive.
Francky :
After number of years I think you also like taxfree or something like that ?
Melissa :
Pretty much yeah, and also so even when we get back to the SCI in a real estate holding vehicle these would be things also to look at if you were going to make you know Investments, it’s the companies you can also emertize certain costs, those are things to look at too I would say that would be maybe an axe for optimization.
Francky :
One hour, it’s like we we spent 20 minutes discussing this together time flies, thank you so much Melissa for your expertise for being there, I know that there are so many other success stories that you didn’t share, I know that there are amazing reaction and assistance for people in the United States you know I want to mention this you know there are 160,000 of you American francophiles every month on Frenchly. Almost half of those 160,000 American francophiles travel at least twice to Paris, to France in general. I invite them, you know you’re going to have thousands of people coming to the agency.
I invite them if there interested in buying a piece of real estate in Paris to make a stop, to say hi to you, now they know you through that webinar so continue that connection, contact Melissa using the QR code that was on the screen a few minutes ago and you will hear way more from Melissa on Frenchly in the coming weeks and coming months thank you so much Melissa and thank you to everyone who attended that webinar thank you
Melissa :
Thank you