A guide for potential owners
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In the past forty years or so, thousands of
people from
Britain, the Netherlands, and many other countries - even Australia or
the USA - have taken the plunge, and moved to France - for retirement,
early retirement or to find a slower pace of life in a rural area. And
for many, either before coming, or once arrived, the idea of earning a
little money on the side - or even earning a living income - through
the opening of holiday accommodation, has seemed an exciting or
interesting challenge to be taken up.
Some have been successful, others less so; and for
some,
the whole venture has quickly turned to disaster. As with
most
projects - specially those where a certain amount of serious investment
is required, opening and running a gite or a group of gites calls in
varying degrees for resources, a certain vision, an ability to work
with local contractors, a fair degree of self-sufficiency, and plenty
of determination to make things work.
Buying a gite
For
the person thinking of moving to France, there are two ways to acquire
a gite or potential gite; one is to acquire a rural property that is
big enough to divide into more than one unit of accommodation - and run
a gite that is essentially an extension of the owner's own
accommodaiton. The other is to acquire a group of cottages or houses
that can be used as multiple gites - the owner living in one of the
units, or close by. And in either case, there is the possibility of
buying an already-operating gites business, or starting from scratch.
How many
gites?
Obviously the more units that are acquired or envisaged, the
greater the potential rewards when the project finally comes to
fruition, but the greater the investment. Establishing a small group of
gites has the advantage or reducing the renovation costs per unit,
notably by spreading the cost of such features as a swimming pool or
other facilities over more than one gite. The downside is that the
gites may not have the independence and privacy that many people are
looking for when they decide on a gite holiday. But there is another
big downside to running multiple gites – one that is often
totally
overlooked when people are drawing up their plans – and that
is
"changeovers", the time
required for cleaning and preparing for the next visitors. Generally
speaking, gite changeover day is Saturday; and while it is not too hard
for gite-owners to clean, tidy and reorganise one or two gites between
time-out and time-in on a summer Saturday, any more may require the
hiring of domestic help or lead to serious logistical problems.
Renovating
and equipping a property as a gite
This
can be done on the cheap; but it's not the best way to create a gite or
gites that bring in the visitors - unless the rental prices are very
cheap too. Gites come in all shapes and sizes, from the small and
rudimentary (less common these days) to the utterly luxurious; but by
far the majoirty lie in the middle – rural accommodation that
is able
to match the expectations of holidaymakers.
Most visitors are looking for a certain degree of
comfort,
even luxury – which means that gites are best renovated and
equipped
with a certain degree of good quality. Besides, quality equipment and
furniture tend to be more robust than the cheaper stuff, and so will
last longer and wear better. It means more
investment upfront, but normally better value for the owner in the long
run. It is vital not to underestimate the cost of renovating even a
"liveable" rural property as a gite, and equipping it to the
standard that visitors are going to expect for the price you ask.
Profitability
Running a gite / gites as a profitable venture is
not easy,
if the intention is to ensure a healthy return on the capital
investment – unless the gite is in the league of exclusive
luxury
properties. On
the other hand, if the capital investment can be largely disregarded
–
which is something that individuals can do, but not companies - then
running a gite or gites as a means of ensuring a certain income is less
of a challenge.
Doing-it-yourself
There
are plenty of enterprising gite-owners in France who have done a lot of
the renovation work themselves; but renovating a gite can require a
good range of skills, not to mention a lot of time, and the complexity
and scope of the task should not be underestimated. Any major work will
almost certainly need to done by professionals, and their services may
be essential when it comes to making sure that renovation work complies
with today's building standards, and safety standards, notably with
regard to electric installations, swimming pools, ventilation, and so
on.
The situation is far less complicated for
properties that are already in basic working order, but need a
superficial makeover to render them clean and attractive for potential
guests.
How long can
you rent your gite for?
This will depend largely on five factors:
- Location :
Where the gite is located,
- Pricing: : How
much you charge relative to the local going
rate (value for money),
- Special features
: Whether you have any special selling points
(like a spectacular view or location),
- Advertising :
How much you are prepared to spend on
advertising,
- and once
established, Customer
loyalty : How many return visitors
you can acquire.
There
are thousands of gites in France whose owners will be more than happy
if they can rent their property for more than eight or nine weeks in
the year. Outside of cities, skiing areas and the French
Riviera,
the holiday season lasts for two months, plus a couple of shorter less
active periods at Christmas and Easter. For the rest of the year, there
are a lot of gites chasing a relatively small number of holidaymakers.
The more of the above five points on which a gite scores well, the more
bookings it is liable to get, over a longer season.
Though a word of caution: equipping gites for hire in the
winter
months may well not be worth the effort. There is a point for most
gites at which the extra revenue gathered from off-season visitors will
be minimal - if not negative - compared to the cost of catering for
these visitors.
Online gite advertising
The
first step is to build and host your own website. This is actually very
easy; website hosting, including a domain name, can cost less than
£50
a year; and many hosting packages now come with free
website
templates.
Having your own website is essential
if you want to avoid the increasingly hefty fees charged by the
"rentals markets" that will promote your gite for you by
putting
your details on their own websites. See below. It also
allows
you to put up all the information and photos you want, for no
surcharge, and also to get your site directly visible on Google, which
is the no.1 starting point for most holiday purchases.
Once you have you website up and
running, then you need to promote it.
Heavy advertising can (but will not
necessarily) produce a
considerable extension of the letting season, but the profits on
low-season rentals cannot be high, given the unfavourable balance
between supply and demand.
Listing with "Gites de France" or "Clévacances"
is not an
obligation, and there are very many gites that are not listed. On the
other hand, it will normally ensure good occupancy in the main holiday
season, plus a quality label that can be used in promotion: but both
come at a cost, for inspection and listing, as well as a sizeable
commission (in the range of 15% - 20%) on sales. And it should not be
forgotten that a 20% commission on sales is 20% of
revenue,
not 20% of profit margin; in terms of percentage of actual
profit, the
figure is considerably greater .
The most cost effective way of
advertising gites is to promote your property and your own website on
the Internet. There are
hundreds
of gites directories to choose from, but among them probably no more
than a dozen that can guarantee results. Prices vary considerably, with
some directories (the online markets) charging up to in
excess of £700 / 800 € a year. This may be a
necessary cost
for people
with several up-market high-cost properties to rent; but for
hose
hiring out just one or two small gites, spending several hundred pounds
on advertising may simply not be worth it.
Virtually any directory that has any internet
presence
should be able to find takers for any gite during the peak weeks
between mid July and late August; in most areas, demand is equal to or
greater than supply during this six week period. However Internet
advertising most important for the
off-season
visitors
that it brings in, not the peak-season traffic; and since rental prices
are much lower in the off-peak months, viable advertising costs have to
be calculated in respect to the additional income (after expenses and
tax) that they can be expected to generate for gite owners
during
the off-peak months.
There are essentially
four types of
sites for advertising gites on the Internet.
1. Those that work on commission.
2. Those that charge a fee for listing, but no
commission.
3. Those that charge a listing fee and
commission (notably Gites de France)
4. Free listings sites
Commission based
sites - such as Booking.com or Air BnB - may sound
attractive. No sale, no fee.... sounds
good. But you are not really wanting a site that makes no sale.... The
cheapest commission based sites start at about 10% (Forget the "3%
commission" sometimes announced; that's 3%... plus a whole lot more
charges which can mount up to 15% or so). 15% isn't too bad if it
brings in one or two more bookings in a year; but if it brought in 12
weeks rentals at an average of 600 € per week, you'd be paying
commission of 1080 €uros . That's a lot. Sites like
hotels.com or booking.com or even Gites de France want to send you lots
of traffic, because they'll take lots of commission. But there is no
guarantee that they will provide bookings, unless you have rock-bottom
prices for your gite.
Fee-based listings
sites :
a) The big ones:
most of the biggest online
rentals sites now belong to a large Texas-based company called Home
Away,
who own - among others - Owners direct, Holiday-Rentals co.
uk,
Abritel, Homelidays, TopRural, Bedandbreakfast .com and a dozen more
online directories - and whose first objective is obviously to maximize
their profit. Given their business model and
their high advertising rates (generally between 200 and 700 Euros a
year), these directories must produce some
results for some advertisers - particularly those that sign up for more
expensive priority listings - but feedback suggests that their results
are extremely variable, and not necessarily any better than smaller
directories. More recent feedback suggests that it may often
be
essential to pay for a premium listing
in order to generate any
bookings on these sites.... making them even more expensive
b) The
small ones: Gitelink.com is is a fee-based listing
site –
but our charges are a fraction of those charged by the bigger more
commercial directories; and as a well-established Internet directory,
launched in 1999, Gitelink has very good Google search rankings,
frequently better than the bigger directories. With far less properties
listed, and good visibility on the Internet, Gitelink can
ensure
good visibility for each property.
For owners who do not have their own website,
Gitelink can build and host a custom designed mini site at very
competitive rates.
Free sites:
Free online directories. For these, you need
to have
your own website. These are almost
always a
total waste of time; as the saying goes, "there's no such thing as a
free lunch", Running and advertising a website takes time and money, so
why should anyone spend time and money for nothing in return?.,
Nonetheless there are some free listings sites, particularly regional
tourism sites, that generate a few clickthroughs. And why
not, if its
free ? But most free directories are pretty invisible in Internet terms.
Conventional wisdom
suggests
that owners should list their properties with at least three or four
productive
sites, as no single site on its own can guarantee
maximum results........ unless your gite/s have a remarkable
selling point in their own right. In which case, they should advertise
themselves by word of mouth alone. On one expat-targeted French
property information site, there is an article suggesting that owners
should reckon on spending 1500 € a year on advertising. This
is quite
way over the top ... or possibly an unintended admission of
the lack of effectiveness of some of the more expensive gites
advertising sites. A listing with Gitelink can cost as little
as £35 a year, and is guaranteed to produce results, given
the very
favourable ratio of visitors to sites listed; but listing with just a
single directory is very unlikely to produce enough customers to fill a
gite for a whole season.
Risks of running a gite
They
are the same as any other venture. An owner's gite needs to be properly
insured, and a proper contract should be signed with those renting a
gite, indicating the extent of the owner's liability in the event of
mishap and other customary clauses. Obviously, clauses must be legal,
and owners should not include clauses to limit their liability beyond
legal minima.
One serious (though not over-great) risk for new owners is
falling victim of a booking scam. See
Gite rental booking scams
for more detail.
To conclude
Buying,
renovating and running a gite or gites can be fun, can be a source of
income, and an occupation; but neither the economics nor the risks of
the operation should be underestimated. Finally, it is important to
remember that running a gite / gites is a job, and in particular one
that will keep the owners busiest in the summer holiday
period.
Gite or B&B
owners:
Advertise
your gite on Gitelink France: rates start at £35 or 39
€ for 2018
Gitelink is a successful online directory for the promotion of
independent gites, country cottages, holiday villas or
b&b
accommodation in France.
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