To own a
small corner of God's country is an obsession that dates back to the Ice
Age. And even if crewmembers' lives are spent at sea, buying and renting out a
property is solid proof that survival instincts to find shelter are still in
to Dockwalk's financial columnist, Peter Brooke, the old adage rings
true: location is paramount. There are several factors to consider when deciding on a
location. For tax purposes, carefully choose the country in which you'd like to own property. Next, you must choose the city or town, then the neighborhood. You may be offering beautiful home for rent, but if the area
surrounding it is in shambles, chances are it won't generate much interest. Property in the right place will always be an excellent investment, but Brooke
warns, “Buying property only really makes sense if you get a loan, put down as
little as possible and get someone else to pay the loan, i.e. a tenant.”
average investment portfolio costs about two-and-a-half percent per annum to
run; owning and letting out a property incurs charges and taxation. “In France,
you need to make at least 13 percent of the purchase price, plus any loan
interest to make the venture viable. You will hand eight percent of the
purchase price to the ‘notaire’ when you buy and five percent to the selling
agents when you sell. Maintenance charges and taxes (for example, taxe
fonciere) are going to round up into a pretty sum,” says Brooke.
Crew should consider what
will appeal to tenants when purchasing a property with the intent to rent it
for income, says Rod
Mitchell of financial advisers Mitchell Johnson. Good layout, a view, outdoor space and at least one bedroom are ideal attributes of any property. “I recommend people invest some money in the property because it makes them more committed to the project,”
says Mitchell. When you purchase a property, there will always be maintenance and upkeep expenses; however, you must decide if you want to spend more money on the purchase or the restoration of the property. “One could argue there will be a better
and steadier return from a more expensive property in France than a distressed
purchase in somewhere like the U.S.,” adds Brooke. If you find an incredible
deal, be sure to find out why the property is so cheap. Mold, fire, water or other damage may have lowered the purchase price. When preparing to buy a property for rental, set a figure that you intend to spend on restoration, upkeep and maintenance. Anything above
and beyond that number will significantly cut into profits.
Due to the fact that vessels travel so often, it is good advice to use an agent to manage the rental property as most crew will not be in town to deal with renters and rental issues.
yachties choose to buy and rent out. Chef Jane of M/Y Sarafsa bought a
studio in Antibes last year that she rents to a friend on a long term lease.
“Using the yachting world network helps” says Jane. “There are plenty of
English speaking property rental agencies in Antibes.”
information and advice on purchasing property and renting it out, contact Peter
Brooke at firstname.lastname@example.org or Rod Mitchell at www.mitchell-johnson.com.