PL21 – 8th March 2003.

Posted by admin in Property Letters | March 8th 2003

Property Letter No. 21
8th March 2003.

Dear All,

Vicky flew home to Cape Town last Tuesday to be with the kids. I fly home on Thursday this week, so another interesting trip to Cannes draws to a close. We will be back here again on about 22 April, until July. Lao and Katherine are here full time now, and brimming with energy and optimism.

The weather is beautifully warm, with people pouring onto the beaches this weekend, tops coming off, and the outside tables are being set up in Place de l’Etang and everywhere else in town, with checked table cloths, wine glasses and baguettes laid out. It’s all very inviting, and the town is beginning to feel as if spring has arrived – it has.

Rentals began in earnest on 8th Feb with the 5 apartments that were ready being offered. That makes four weeks now that we have been in business so it’s a bit early to start giving you stats, but it’s interesting none the less. Out of our first twenty available apartment weeks ( 5 apartments / 4 weeks each ) we have rented ten weeks. So we are off to a flying start – 50% occupancy. Lots still to do and a long way to go. By the end of March we will have 8 apartments in the system, and nearly double that by the end of April.

Finance.
To run through the basics again.
Loans are available to finance purchase of property over 15 years (or less if you prefer) at an interest rate of 3.7% p.a. at the moment. That rate is changeable once a year, up or down, but within strict guidelines, and in relation to the European Inter Bank Rate.
Loans are also available for the refurbishment of apartments at the same rate of interest. For value adding to the apartment, not for furnishing.
Countries are graded and you are deemed to be Mongolian if that is where your income derives from, and it has nothing to do with the fact that you have a British passport, or that you hold your bank accounts in Jersey.
• Europeans and Brits can apply for a 70% mortgage, and maybe more.
• South Africans can apply for a 60% mortgage.
• Zimbabweans can apply for a 50% mortgage – and I hold my breath and hope it stays that way.

Vicky and I have not found it as easy as last year to find the apartments that we want at the prices that we want to pay although we have looked at so many. There are far more European buyers it seems, and there is no doubt at all that the market is rising which is very good news for those of us who bought last year. Less good for those who still want to buy of course, but I must say that the opinion is that prices are likely to continue to rise into the summer. I am sure they will. We will continue to seek out the desirable and rentable apartments, at an attractive price.

I will summarise below the apartments that have been interesting this trip, which are or may be still available. Please let me know urgently if there is something here that interests you now. I will try at least to get an offer in before I leave on Thursday, and possibly an agreement. If it’s not done by Thursday it’s not the end of the world. I can now do the whole thing by remote – it just feels better to do it on site, and time is always an issue in an active market, as this is.

Quickly, the process :
• You instruct me and I make an offer on your behalf.
• If the offer is accepted, I sign an agreement on your behalf, and the seller signs too.
• From the moment we both have signed there is a 7 day cool off period during which either party may pull out for any reason without penalty. After 7 days the agreement is binding unless finance is refused you by the lending bank you apply to.
• Simultaneously you put in place a 10% deposit, by the quickest means, to the account of the French notary who will represent you in the purchase – I will give you his banking details. He holds the money in trust until transfer.
• Application for a mortgage begins, and should take a month. I will walk you through the process step by step as it proceeds.
• The notary’s office begins the exhaustive process of deeds searches going back 50 years, and all sorts of other processes like obtaining termite and pest clearance certificates etc, which must be in place before transfer.
• If you apply for finance you can expect transfer in 3 months. If you pay cash, then 2 months.
• The balance of 90% from you, or from you and the lending bank, are only due on the day of transfer, so you have at least two months to organise your funds after payment of the 10% deposit.
All the very best to you all from Vicky and I.

Guy.

APARTMENTS :

Another little apartment in La Brise. We now have four between us in this building – three on the top floor (5th), and one on the 4th. This one is on the 2nd. This block is right in the middle of Palm beach, overlooks the ever-buzzing Place de l’Etang with its village life and restaurants, is two minutes to the beach to the East, four minutes to the beach in the West, and two minutes to the famous and historic Palm Beach Casino and soon to be completed hot-sea-water swimming pool complex on your South side. It is a 15 minute walk to the Palais des Festival (conference and festival venue)
The apartment is in disgusting shape – dirty and abused – and will need complete gutting and refurbishing from the walls inwards. And they are asking too much at 87 000€.
It is very small, as are the others in this block – 17 sq.m. with an 8 sq.m. closed in balcony, giving 25 sq.m living space. The balcony has a very wide open/close glass front so acts as both added living space, and a balcony.
My suggestion – offer 70 000 (may have to go to 74).
Budget 15 000 for renovations and 5 000 for furnishing including kitchen.
Transfer fees – about 6 000.
Result – a new and fully equipped flat in a great position, ready to rent for under 4 000€ per sq.m.

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First floor apartment in Residence St. Honorat. This one bedroom apartment is about 50 meters from La Brise, and closer to the Casino, on Ave Lerins. It faces West, so gets good afternoon sun onto its spacious terrace, which sits back from the road but overlooks it. Both the bedroom and the living room open through big glass doors onto the terrace. The road is a local access one way, single lane road, and not a busy one. The view is across the street at similar blocks on the other side, but they are not towering or overbearing – max height for the area is about 5/6 floors, and they are not built right up to the road. The block has an entrance from Ave Lerins which is the side this flat looks, but another entrance the other side straight onto the sea. gorgeous beaches left and right, and a very nice restaurant on the ground floor overlooking the Gulf Juan towards Cap d’Antibes. The flat needs refreshing throughout, and opening up of the kitchen to make it light and modern. Again it is far too expensive at asing price of 198 OOO€.
The flat is 50 sq.m. with a 15 sq.m. terrace.
My suggestion – offer 155 000 (up to 165)
Spend 15 to 20 000 renovating and furnishing.
Transfer fees about 11 000
Result – as above. A lovely new flat, light and bright and very rentable in an area that is on the way up for under 4 000€ per sq.m.

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Second floor apartment in Le Beach. This is a one bedroom flat but we were shown the identical flat below it that had very simply been converted into a two bedroom. (Beautifully finished and interesting to see what could be done). It is extremely spacious, and is also in Palm Beach, so the same descriptios as above apply. It looks South and West from a very large and sunny wrap-around terrace balcony, which overlooks a courtyard and parking area between other buildings, which are not close by and all are in the 5 storey range, so it doesn’t feel closed in. It does feel quiet though. The apartment needs redoing, as it’s empty and tired. The owner (who did the flat below) has the tiles to retile the whole flat on hand, and those are included in the price. Just didn’t get around to doing it for some reason.
The flat is 60 sq.m. with a 21 sq. m. terrace.
Price being asked – 212 000€. I suggest offer of 170 000.
Budget 25 to 30 000 on renovation and furnishing
Transfer fees about 12 000
Finished cost – 3 500€ per sq.m.
(I am looking at another in the same building – 5th floor – on Tuesday. I will report if it is good)

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Plage du Midi – some flats are still available. The position (position, position, position) is wonderful right on the beach, and a stones throw from the Old Marina and the Palais des Festival. Extreme rentability. 36 sq.m. with a large terrace (17 sq.m.) for about 177 000€. Add about 5 000 for touch up and furnishing, and 12 000 for transfer fees.
Price is going to be over 5300€ per sq.m. by the time its ready.

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Dont know if this one is still available – will check.
First floor apartment in Miramar Antibes. This one bedroom apartment is undergoing complete refurbishment and is being sold new and complete. Ready in April. It has brand new marble floors, a modern kitchen and bathroom, and inset chromium lights throughout. It is on the first floor of a 1940’s building in the centre of Cannes, with an oblique view of the sea a block away. It has no balcony but feels extremely spacious and light, west facing, and double glazed against sound from the street and the weather. Air conditioned throughout obviously. Position is prime in the centre of the hotel and conference district with the beaches a block away. It is a luxury apartment, extremely rentable, and requires only furnishing.
The apartment is 48 sq.m.
Price is 180 000€ . Offer 165 to 170 000
Budget 5 000 for furniture.
Transfer fees about 12 000
Finished cost 4 014€ per sq.m. You won’t see that again in a hurry.

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Rue d’Antibes – Studio apartment.
I doubt if this one is still available – it might be.
This studio is in a great position in the livliest part of town, right on Rue d’Antibes, and literally opposite the square, to the left of which and across the Croisette, is the Palais des Festival. It is a couple of hundred meters from the Old Town of Cannes (Le Sucquet) and surrounded by the best shopping and restaurants in France (and I don’t mean the most expensive). In spite of it’s being in the heart of the action, it’s still a narrow one way steet, dominated by pedestrians and shoppers, and in front of you old French village life goes on. Boulle is played on the square, kids run around, through the trees 200 meters away is the Old Port, and every weekend the square converts into a lively and characterful market with hundreds of stalls selling everything from bric-a-brac to beautiful original art.
The flat is double glazed to keep out the sounds of the street when needed, and other than that it needs renovation – a new kitchen, an upgrade in the bathroom, and painting throughout.
The Studio is 30 sq.m.
Price is 129 320€ and I dont think you’ll get it for much less if it’s still available.
Renovations to a very high quality and furnishing – estimate 25 000 (I think that’s too high)
Transfer fees 9 000
Finished cost 5 444€ per sq.m. But the result, the position and the rentability…..fantastic in my view.

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Finally, a biggie.
Ave. de la Reine Astrid – Two bedroom apartment.
This Palm Beach apartment on the 4th floor of a 7 storey building a few meters from Place de l’Etang looks out over rooftops to the hills of Cannes in the north. A beautiful, huge and open view. From the very spacious terrace one looks towards the east, and the sea of Gulf Juan towards Cap d’Antibes – to the north, and the view over the hills – and to the west and the Croisette, the palm trees and gardens, and the beaches looking towards Cannes. It is 200 meters to the beach to the West, and 400 meters to the beach to the East.
The apartment itself has a very big living area with sliding glass doors the entire width of the apartment, a kitchen that begs to be converted into an open-plan kitchen, and modernised, and two reasonable sized bedroms facing South and overlooking a traffic free courtyard, with their own large shared balcony. So they are quiet open and sunny.
The apartment is in need of renovation, and furnishing. It has it’s own garage in the basement, and a cellar.
We simply do not know about the rentability of two bedroom apartments. It will be beautiful, in a great and upcoming area, so as an investment it’s very good, and lovely too if you plan to get a lot of use out of it yourself. But to cover the mortgage from rental income, year round….. we just don’t have the experience yet, but feel that it will be more difficult to rent big apartments than small ones except in summer.
The apartment is 77 sq.m. plus large terrace at front and balcony at back, and garage and cellar.
Price is 356 000€ and probably wont go down much – try 330 000
Renovations and furnishing – budget 30 000
Transfer fees 20 000
Finished cost 5 000€ per sq.m.

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