Property Letter 4

Posted by admin in Property Letters | May 28th 2002

We have seen many properties now and save for a couple more which we are booked to view tomorrow we will stop visiting flats now, as I think we have enough to choose from, and we are going to concentrate now on banks, accountants, notaries etc.
 
Please refer to our property letter No. 2 for an explanation of all the formulae that we have used.  We stress again that there are so many variables, and we have tried to assess the market, and each individual property with some degree of realism, and consistency; but can not guarantee accuracy.  Once we are on the ground and running we will obviously begin to understand properly where we have underestimated, or overestimated, and focus on maximizing returns on every property that we are managing.

Herewith our selection of properties
 
Notes:
1  All prices quoted are in Euros
2  None of the buildings go above 5 floors. (legal limit in Cannes)
3  More details of the these properties are laid out below
4  Upfront investment includes, 25% deposit, transfer duty, kitchen (where necessary) furniture and redecoration (again where necessary).  Generally where a flat needs
    furnishing we have already budgeted 6000, and for a small kitchen 3000.
5 We have assumed 75% mortgage and 25% downpayment in all cases. You can pay more. Please see second property letter.
 
Quick reference list of interesting properties
1  Villa Lerins                Cannes Palm Beach            3rd Floor studio                           121 960
2  42 Rue Droite             Nice Old City                        3rd Floor studio with mezanine            140 000
3  Ave Victor Hugo     Nice centre               4th Floor studio                           100 000             SOLD
4  Le jardins de l’enfant              Cannes                         Gr Floor studio                           164 645
5  Le Petit Palais   Cannes Palm Beach            Gr Floor studio                           160 000
6  Reine Astrid               Cannes Palm Beach            4th Floor studio                             94 519
7  La Bruis                    Cannes Palm Beach            5th Floor studio                             91 470
8  Riviera Palm Beach   Cannes Palm Beach            5th Floor studio                             76 224
9  Les Arau Carais   Cannes Palm Beach            2nd Floor studio                             83 850
10 Les Asteries             Cap d’Antibes                       Gr Floor 1 bedroom                     134 000
11 Les Asteries             Cap d’Antibes                       1st Floor 1 bedroom                     128 000
12 Terraces Belle Vue            Nice – outskirts                        Gr Floor 1 bedroom                     135 000             SWIMMING POOL
13 Golf Royal Mougins            Mougins                      Gr Floor 1 bedroom                     305 000             SWIMMING POOL
14 Antibes gardens Juan Les Pains                      1st Floor 1 bedroom                     129 582             SWIMMING POOL
15 Montrose                  Cannes – outskirts            2nd Floor 1 bedroom                     114 336
16 Santa Cruise             Cannes Palm Beach            4th Floor 1 bedroom                     106 700
17 Le Grand Sud      Nice – seafront             Gr floor 2 bedroom                     236 000             SEA FRONT – PROMENADE DES ANGLAIS
18 Corail Beach             Cannes Palm Beach          &
nbsp;  1st Floor 1 bedroom                     129 582
19 Riviera Palm Beach   Cannes Palm Beach            Gr Floor 1 bedroom                     327 766             GARDEN ONTO SEA FRONT
20 Le Neptune                                                                                                                            SOLD
 
Some details
1 Villa Lerins            26.31 sq m     part sea view      street parking. Apartment cost per sq m 4635            mortgage 681/month              Upfront investment  44 027
   Rentability 15.12%, Net Profit ROI  3.82% Capital Appreciation ROI 32.24% Equity Buildup ROI 9.93% tax shelter ROI 10% Total ROI (1st yr) 56,99%
   Very clean, overlooks gardens and roof tops to the sea. Walk two blocks to beach.   Big balcony.  Tiny kitchenette with double hotplate and fridge.  
   Light and bright.  Ready to move in.  Requires furnishing before renting.
 
2 42 Rue Droite  52 sq m Narrow ancient street, public underground parking few hundred metres away, cost per sq m 2692, mortgage 782/month. Upfront invest 54 800
   Rentability 10.93%, Net Profit ROI  (-3.13%), Capital Appreciation ROI 31.09, Equity Buildup ROI 9.14%, tax shelter ROI 10%, Total ROI (1st yr) 47.12%.
   In a centuries old listed building, full of character, on narrow street of restaurants, galleries and little shops, very lively.  Broad staircase, no lift. Reasonable
   Entrance hall with marvelous old wrought iron wheat eared gates within the apartment, leads to 52 sq m living area with 2 large shuttered windows overlooking
   Street.  Undergoing renovation, to a very high standard.  Modern lighting, kitchen and bathroom, with expensive fittings.  Marble floor throughout.  An intriguing
   Feature is a large mezzanine floor of 35 sq m under ceiling with massive wooden beams.  Therefore could sleep 4 but without much privacy.  TV and phone points up   and down level.  2 heaters.
 
3 Ave Victor Hugo – sadly sold and not to us, we were too late!
 
4 Les Jardins de l’Infante  35 sq m  Beautiful gardens and fountain, street parking, cost per sq m 4704, mortgage 919/month, Upfront investment 60 186,
   Rentability 9.29%, Net profit ROI  (– 7.90%), Capital appreciation ROI 33.13%, Equity Buildup ROI 9.80%, tax shelter ROI 10%, Total ROI 45.03%.
   Beautifully gardened and maintained block of apartments with marble entrance, set a little bit back from the Palm Beach enclave of Cannes, but still only a few
   Blocks from the sea in two directions. Caretaker, Requires furnishing, but excellent kitchen with fridge, stove, washing machine, no oven.  Private underground
   Garage and cellar.  2 heaters.  Walls lined with a type of fabric wallpaper need a coat of paint at some time.  Can get special paint for this.  Budgeted 1500 to do
   The repainting.   This flat is a little expensive and that is reflected in the figures, but they may accept offers.
 
5 Le Petit Palais    38 sq m.  view onto small enclosed shrubbery.  Private parking   cost per sq m 4210,  mortgage 894/month   Upfront investment 58 700
   Rentability 9.56%, Net profit ROI   (– 6.98%), Capital appreciation ROI 32.02%, Equity Buildup ROI 9.77%, tax shelter ROI 10%, Total ROI 45.80%.
   No view but large wrap around ground floor patio with plenty of space for living and braaing.  Apartment seems a little more spacious, and has a concertina door on
   The bedroom area which makes it more private.  Reasonable entrance in a private and gated street making it very secure.  Kitchen separate, has dish washer, washing
   Machine, stove and fridge.   Coloured pink at the moment, needs a coat of paint throughout.  Slightly older finish.  Right in centre of Palm Beach peninsula and two
   Blocks from the sea in either direction.  Very quiet.  Once again the price is high, reflected in the figures and offers would be appropriate.
 
Reine Astrid   31 sq m,  view across gardens and school yard.  Street parking,  cost per sq m 3049, mortgage 528/month, Upfront investment 38 746.
   Rentability 16.19%, Net profit ROI   2.24%, Capital appreciation ROI 29.74%, Equity Buildup ROI 8.74%, tax shelter ROI 10%, Total ROI 50 71%.
   The upfront investment of 38 746 has allowed 4 500 Euros for retiling the bathroom, and repainting the whole flat.  Kitchen complete with small oven, stove, and
   Fridge.  Flat requires furnishing.  Budgeted Euros 4 000.  Separate entrance hall, and a good balcony.
 
La Bruis   22 sq m, front view across village square.  Street parking, cost per sq m 4157, mortgage 511/month, Upfront investment 31 269.
   Rentability 16.73%, Net profit ROI   3.2%, Capital appreciation ROI 35.87%, Equity Buildup ROI 10.48%, tax shelter ROI 10%, Total ROI 59.55%.
   Great view from front balcony across village square where boule is played with enthusiasm and fringed by restaurants and little shops!  Rear balcony enclosed off                          k  equipped kitchen, but looks out across the sea.
   Tiny studio flat, fully furnished and well equipped with clever use of space.
 
Riviera Palm Beach studio  22 sq m, view of small garden.  Street parking, cost per sq m 3463, mortgage 425/month, upfront investment 26 391.
   Rentability 16.73%, Net profit ROI   1.54%, Capital appreciation ROI 34.66%, Equity Buildup ROI 10.35%, tax shelter ROI 10%, Total ROI 56.54%.
   4 year old block with front entrance straight on beach road, but this flat faces backwards.  Pleasant entrance.  Small but clean.  No balcony.  Has air
   conditioning and heating..  Kitchen fully equipped with dishwasher, fridge, microwave and 2 plate stove.  Requires furnishing with pull down bed etc.
 
9. Les Arau Carais  24 sq m,side view of sea from balcony. Street parking, cost per sq m 3493, mortgage  468/month , upfront investment 33 832.
   Rentability 16.67%, Net profit ROI
   1.38%, Capital appreciation ROI 30.81%, Equity buildup ROI 8.88%, tax shelter ROI 10%, Total ROI 51.06%.
   Finishing reasonable, marble floors, cupboards in hall, and has two fitted “drop down” single beds (makes a double)  in the main room.  Large balcony. Kitchen
   And loo need replacing so 4000 Euros budgeted
 
10 Les Asteries   29.3 sq m, view of gardens, parking and cellar offered (optional 13 500) cost per sq m 4573, mortgage 824/month, upfront investment 56 200.
   Rentability 12.10%, Net profit ROI    0.2%, Capital appreciation ROI 32.14%, Equity buildup ROI 9.40%, tax shelter ROI 10%, Total ROI 51.74%.
   Original apartment block being refurbished on exclusive Cap D’Antibes.  This is the show apartment and demonstrates how well the renovations are being done.
   Ready for occupation Dec 2002.  The optional garage and cellar at 13 500 Euros, we have included in the calculations.  Bedroom very small.  There are numerous
   Apartments still available, this is one of them.  Others are larger and higher up with part sea views and progressively more expensive.  Short walk down the hill to
   Beaches.   Requires and furnishing and kitchen, budgeted for at 9 000 Euros.
 
11 Les Asteries   33.1 sq m, view of gardens, parking etc. offered optional but included in our calculations. Cost per sq m 3867, mortgage 801/mth Upfront invest 53 335.
   Rentability 12.44%, Net profit ROI   1.22%, capital appreciation ROI 32.51%, Equity buildup ROI 9.51%, tax shelter ROI 10%, Total ROI 53.24%.
   As above, but this one is on first floor with a garden view.
 
12 Terrace Belle Vue   58.8 sq m, view across part of Nice to the sea. Private parking, cost per sq m 2295, mortgage 754/month, upfront investments 48 800.
   Rentability 11.44%, Net profit ROI  (-2.26%), capital appreciation ROI 33.93%, Equity buildup ROI 9.91%, tax shelter ROI, 10%, Total ROI 51.58%.
   Beautiful location with stunning view, gardens going down to large pool.  Still being built, planned for completion Dec 2002.   These apartments of which some are
   Already completed, are spacious, with terrace, private gardens.  The figures reflect the fact that we have included rental for 33 wks instead of 40 simply because we are
   Unsure as it is not near the beach or the centre of Nice.  It is on a bus route, and suits anyone with a hire car, whereas the apartment is superb we just don’t know
   How it would perform for rentals. 
 
13 Golf Royal Mougins   45 sq m, view across golf course, private parking, cost per sq m 6777, mortgage 1 703/month upfront investment 101 260.
   Rentability 9.18%, Net profit ROI (-8.14%) capital appreciation ROI 36.14%, Equity buildup ROI 10.79%, tax shelter 10%, Total ROI 48 80%.
   Amazing setting as part of a renowned golf course set in Mougins, just outside Cannes.  The apartments are all surrounded by beautiful gardens with spectacular
   Views across the world class golf course with medieval villages visible on the hillsides.  This is an unusual find and obviously suits someone keen on their golf!! 
   The club claim, higher rentability can be achieved with more all year round interest, but we have remained with the 40 weeks per year letting at what we believe to
   Be conservative rates of 700 Euros per week.  That could be improved especially if you have personal contact with other golfers, and of course advertise in golfing
   Magazines etc.  The apartments are in excellent condition (another has just come up for 285 000), and there is a majestic 5 star club house, restaurant and bar
   Adjacent.    The whole complex is under the supervision of caretakers and 24 hour security.  Very exclusive.  Kitchen fully equipped. I think one would get the
   Furniture included in the deal, and we have included 3660 Euros which is the annual golf course fee, as part of the upfront investment.
 
14 Antibes Gardens   42 sq m, view across gardens, private parking, cost per sq m 3085, mortgage 724/month, upfront investment 47 466.
   Rentability 10.19%, Net profit ROI (-6.59%), capital appreciation ROI 32.76%, Equity buildup ROI 9.78%,  tax shelter ROI 10%, Total ROI 45.95%.
   This property rather like Terraces Belle Vue above is well situated in gardens with a lovely pool, but is away from the sea and the city centre.  Requires a hire
   Car.  We have therefore taken 7 weeks rental a year off in our calculations and that is reflected in the Net profit ROI figure.  It is not a relfection of the property
   And it is unknown whether we will in the event be able to improve on the rental we achieve.  Nice large balcony, south east facing.  Clean and ready to move
   In, requires furnishing only.  It is in Juan Les Pains which is a suburb close to Cannes.
 
 
15 Montrose             38 sq m            View foliage   garage              cost per sq m 3008            mortgage 638/month            Upfront investment 39 587
   Rentability 13.85%, Net profit ROI (-0.09%), Capital Appreciation ROI 34.66%, Equity Buildup ROI 12.07%, tax shelter ROI 10%, Total ROI (1st yr) 56.64%
   Set back behind Cannes Centre on a bus route in suburbia.  Gardens with large trees & bird life. Very clean comfortable and quiet.   Kitchen has
   2 plate stove, fridge, microwave, and washing machine.  All furniture included – lounge = sofa/bed, dining room table, 4 chairs, sideboard, bedroom has
   a double bed and single fold out bed, large terrace has one lounger and 2 chairs.   Underground garage with electric doors, and cellar, with deep freeze included.
   The figures express our concern that it may be more difficult to let on a holiday basis because it is not close to the beach.  It may however suit long term furnished
   Rentals.  Only need to purchase a TV to complete.
 
16 Santa Cruz   34 sq m    View  of gardens   Street parking       cost per sq m 3138     mortgage 596/month     Upfront investment 44 144
   rentability 15%0%, Net profit ROI  2.26%  capital appreciation ROI   29.82%,  Equity Buildup ROI  8.66%, tax shelter ROI 10%,  Total ROI 50,74%.
   Needs a little care, couple of floor tiles require replacing.  Good balcony.  Requires furnishing and new kitchen budgeted for.  It is in Palm Beach and close
   To the sea.
 
17 Le Grand Sud  66 sq m, two bedrooms.  View over the sea.  Cost per sq m 3575   mortgage 1318            Upfront investment 103 920
   Rentability 10.81%, Net profit ROI 1.56%, capital appreciation ROI 27.25%, Equity Buildup ROI 7.10%, tax shelter  ROI  10%,  Total ROI 45 .91%.
   This superb flat sits on the Promenade des Anglais in the midd
le of Nice a pebbles throw from the beach (pebble beach!).  Amazing location.  The second
   Bedroom only big enough for bunk beds.  It has a second bathroom with shower, loo and basin.  There is space for the washing machine in here too.
   Excellent equipped kitchen.  Quite noisy on balcony.  Pleasant courtyard accessed at back through French door in second bedroom.  Sitting room is large
   Enough for pullout double bed, making it sleep 6 if required.   A reminder owners require a 30 000 Euro cash payment as part of the deal, and we have
   Included this as part of the upfront investment, it does however affect the figures.  The mortgage is therefore calculated on a 206 000 investment and all the
   Other figures on 236 000.
 
18 Corail Beach   52 sq m,  one bedroom.  View sidesways to sea/port.  Cost per sq m 2491   mortgage 723      Upfront investment 48 466.
   Rentability 13.78%   Net profit ROI   0.17%, capital appreciation ROI 32.33%, Equity buildup ROI  9.58%,  tax shelter ROI  10%,  total ROI 52.08%.
   This flat we have only seen from the outside, but it is in Palm Beach, good position.  We see it tomorrow hopefully.
 
19 Riveria Palm Beach, 1 bedroom.  Front view of sea.  Cost per sq m 7803     mortgage 1830    Upfront investment 106 885.
   Rentability 7.78%,  Net profit ROI (-6.71%)  capital appreciation ROI 36.80%,  Equity buildup ROI 10.99%, tax shelter ROI 10%, Total ROI 51.07%.
   Beautiful and immaculate flat.  Large terrace onto your own garden with palm tree and small lawn on the sea front.   Lovely views across the bay.  It does face
   East.  Kitchen fully equipped with all mod cons 4 plate stove, fridge, deep freeze, dish washer, eye level oven and washing machine.  Most of the furniture in
   White an cream comes with the apartment, including double bed, carpet.  Sofa/bed, small side tables, curtains in both lounge and bedroom, sideboard and
   Terrace furniture of a table and two chairs.  Would need more terrace chairs.  Bathroom smart with spa bath!  Safe in the cupboard.  Electric blinds, security
   lights and alarms.  Garden cared for by apartment block.
 
FINANCE
Modus Operandi.
We need to move quickly now.
 
It seems Entenial Bank are going to be the best people to work with.  They are helpful and flexible.
 
1.                   Make offer
2.                   If offer accepted – lodge deposit with “Notaire” (Notary) of 10% of agreed price.  Done by direct debit or switch.
3.                   Seven day cool off period on either side.
4.                   After seven days agreement is binding.  Withdrawal from Agreement means sacrifice of deposit.
5.                   Application for Finance
6.                   Loan application forms will be sent to you by post by Entenial Bank.  The bank require the form filled in.  A copy of passport.  Accountant reference
Giving name of your Company (in Zim) nature of your business activities, turnover for the previous three year period (translated into Euros) and dividends
Or profits for the last three years.
7.                   Purchase contract
8.                   Reference letter from your bank (You can use you Zim or UK bank to write the reference).
 
The loan takes a month to approve and if for any reason it is not approved, the Agreement falls away and your deposit is returned.  If it is approved, you will need to go
To the French Consulate and sign a limited Power of Attourney in favour of the French Notary overseeing the sale, empowering him to sign the Deed of Transfer on your
Behalf.
 
We hope to have all offers in by the end of the week.   If uncertain, remember you have a week to withdraw.
 
We leave France next Wednesday.
 
For late comers we can redo this exercise later in the year when we return.  I recommend that anyone interested should read “Building Wealth from Rags to Riches through Real Estate” by Russ Whitney, and published by Simon and Schuster.  If you need me to get you a copy when I’m in London let me know.
 
If more than one of you opt for the same property, we will email or phone and let you know.  So far five other than ourselves have expressed positive interest.
 
Love Guy and Vicky

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