This practical guide aims to provide you with information and simple, clear answers to any questions you may have on the subject of seasonally letting your property. As professional estate agents, we see guiding you through these steps towards the best decision as an essential part of our mission.
10 questions to ask yourself if you want to rent your furnished property.
Is letting your property worthwhile?
Before rushing headlong into seasonally letting your property, it’s important to ask yourself the right questions.
Am I prepared to let strangers into my property?
If you decide to let out your property, you have to be prepared to make certain concessions. Effectively, you will be sharing your property with your tenants, which means:
Not leaving your belongings in the apartment and/or ski locker. It’s no longer sufficient just to put bolts on your apartment’s cupboard doors.
Accepting the need for flexibility in terms of arrival days and times, and not always being able to decide to spend the weekend in the mountains at the last moment.
Accepting that your apartment, due to more frequent use, will show signs of wear and tear more quickly than before. You should therefore expect to have to make more frequent repairs and updates.
Is my property ready to let?
If you decide to let your property, it is important to find out about the resort and learn what your potential clientele expect so you can adapt your property to suit them if necessary.
Your property’s geographic location in the resort is also important as clients are increasingly seeking proximity to shops, doorstep skiing…
Some key information relating to Val Thorens.
Large surface areas are increasingly sought after.
Some services such as a TV, Wi-Fi, dishwasher… are now essential.
Apartments without enclosed sleeping areas are suitable for 2-3 people but any more than that and it risks becoming more and more difficult (except for very low-priced apartments).
Some residences have a real party reputation. If your property is situated in one of these residences, it will mostly be let to groups of friends – usually young people – so you are advised not to spend too much on decorating.
When can I expect to let my property?
Rental periods differ depending on the resort in which your property is located. It is important to know them and perhaps to adapt your personal stays around them.
Some key information relating to Val Thorens.
The winter season is very long (mid-November to mid-May), coming to a total of 24 potential rental weeks.
The clientele is very international in the winter (70% from abroad), the high season therefore is not limited just to French school holidays.
There is a summer season but the prices are very low and there are few clients. It is difficult to compete with the low rental prices offered by large groups such as Pierre & Vacances and you should remember that because of the resort altitude, it’s not unusual to have to heat apartments in the summer.
What return can I expect from letting my property?
When you calculate the rental income that your property could provide, you mustn’t forget to deduct charges (management charges, EDF, local taxes…) and mortgage loan repayments if you have one.
Buying and selling a property in the mountains represents a sound financial investment, but a long-term one!
What constitutes a furnished tourist let? Regulations and taxation.
According to the Tourism Code (Art. D324-1), furnished tourist lets, also known as holiday lets or seasonal lets, are furnished villas, apartments or studios, occupied solely by the tenants, available to travelling clients who rent the property by the day, week, or month and who do not take up residence in the property.
“Furnished tourist lets are categorised by an increasing number of stars, according to criteria fixed by a table of classification” (Tourism Code - Art D324-2). They are ranked from 1 to 5 stars.
Classification is subject to an inspection visit that must be carried out by an approved or accredited organisation that awards the number of stars (Sem Rénov in Belleville Vallée).
Cost of visit in 2014: 70€ Incl. tax (classification is valid for a period of 5 years)
Income generated by non-professional furnished lettings is subject to taxation in the “Bénéfices Industriels et Commerciaux (B.I.C)” category.
For uncategorised furnished lets, the fixed-rate allowance is 50% calculated on a base income of 32,600€.
“Furnished Tourist Lets” enjoy a fixed-rate allowance of 71% for a base income of 81,500€ generated by the letting.
Do you need to renovate your property for seasonal lettings? Benefits, subsidies, quality labels and requirements.
Furnished tourist lets must meet minimum habitation and comfort requirements.
A well-equipped apartment (good quality bedding, equipped kitchen, comfortable bathroom…) in a good location (peaceful and at the foot of the slopes) that has been decorated well (evoking a mountain atmosphere) will be a priority rental and treated more respectfully by tenants (subject to less damage).
In light of this, the Leisure Lettings Renovation Operation (known as ORIL in French) was started by the town of Saint Martin de Belleville in 2003.
You can increase the value of your property and enjoy the concomitant subsidies (6,000€ for the first 20m² and 150€ for each additional m²) by transforming your apartment into a comfortable and pleasant holiday destination.
For further information on this renovation programme, visit www.renovationlesmenuiresvalthorens.com.
Since 2013, in order to promote renovated properties, and with the goal of clearer descriptions for clients, estate agencies and private landlords have all marketed their properties using the same label (the Belleville Vallée accommodation quality label).
It is an objective category system on a scale of 1 to 5 snowflakes.
1 snowflake: standard > simple and functional
2 snowflakes: standard plus > partially renovated
3 snowflakes: comfort > comfortable and renovated
4 snowflakes: comfort plus > spacious and well-equipped
5 snowflakes: luxury > top of the range and exceptional
The décor, style and harmony are then categorised into three colour categories: Bronze, Silver and Gold.
“ORIL” refers to general renovations that improve the rental property, see specifications on the benchmark document stating all of the criteria required in order to obtain the subsidies.
To list your property, click here to have access to the quality label criteria and don’t hesitate to contact us for further details.
Is it a good idea for private landlords to let to private individuals?
Individuals letting privately to individuals is a growing trend due to certain websites who specialise in this type of letting.
The owner must therefore take sole responsibility for:
Marketing the property (rental price grid / promoting the property / informing the client…)
Drawing up rental contracts and receiving rent money
Welcoming the client upon arrival (apartment inspection upon arrival / tourist tax and deposit)
Client departure (apartment inspection / cleaning / returning the deposit)
Technical issues and any complaints that should arise
Paying tourist tax to the property’s local town hall
Don’t underestimate the costs that you may incur letting your property and the time that you will be required to dedicate to it.
You will also have to meet the new regulations surrounding property lettings. The rental market is becoming more and more stringently controlled by public authorities but until now has been largely free of restrictions, especially financial controls.
This solution is perfect for people who live on site or nearby. From a distance, this can become more complicated and we advise you to ask a local service provider to manage the key handover, inspections, cleaning and any technical issues that may arise.
What contract should you sign with an estate agency for seasonally letting your property?
If you choose to let your property through an estate agency, you will have the choice between several contract options. This choice will depend on the number of weeks that you want to let your property, the income you expect to receive and your planned personal use of your property.
This agreement is a partnership that the agency signs with the landlord for the duration of 1 year (in accordance with the Hoguet Law) often with tacit renewal.
With this rental contract, you can occupy your apartment when you wish to and receive regular rent payments throughout the season.
However, there is no guaranteed income because your remuneration will depend on the number of actual weeks let. Also, you will be liable for the cost of charges and any visits the agency is required to make.
Please note, when you compare the advertised prices applied by the resort’s different estate agencies, there are several points to take into account.
Know exactly how much estate agency fees are – some are advertised exclusive of tax and others inclusive of tax.
Know which facilities are included in the advertised price because they will also be deducted from your landlord net payment (apartment cleaning / household linen / cancellation insurance…).
Find out about the agency’s sales practices – certain agencies work a great deal with tour operators and they never pay the advertised price (between 10% and 30% discount).
The estate agency that advertises the highest price OR lower fees is not always the one that will earn you the most rental income.
Lease agreement (seasonal or annual)
The lease is drawn up for a duration corresponding to one tourist season or 1 year depending on the agreement you make with the estate agency.
With this type of contract, the agency guarantees you a rental income (sum calculated according to the quality of the property, the number it sleeps and average resort rent). This sum is guaranteed whatever happens! What’s more, the agency takes care of certain charges and minor apartment maintenance.
However, you will no longer have free access to your property.
What can you expect from the estate agency to which you entrust your property? Marketing and client management.
If you choose to let your property via an estate agency, it will look after the management from A to Z.
You won’t have to worry about lettings formalities or any of the hassle that comes with letting a property. You can also choose the weeks that you wish to keep aside for your own personal use of the property.
Creating the property listing and promoting it with photographs.
Submitting your property for resort quality label endorsement.
Determining the price of your property according to its general condition, accommodation capacity, the residence and quality label.
Managing low-season periods through all-inclusive packages which are in very high demand.
Promoting your property using as many types of media as possible. In its capacity as a professional letting agent, the agency can showcase your property in the resort’s central bookings office, giving you even more opportunities to let your property.
Updating websites and keeping our sales partners informed.
Keeping clients informed by telephone, email or face to face and accompanying them through their online booking.
Sending out the options and rental contracts.
Handling the lettings deposit (at the time of booking) and the balance (30 days before arrival).
Management when the client arrives
Welcoming the client on arrival day (Saturday or other).
Taking receipt of the tourist tax and damage deposit.
Offering additional facilities and services: bed linen hire, towels, baby kit, end-of-stay cleaning, ski passes, parking spaces…
Handing over the sets of keys, information documents and apartment rules.
Informing the client about the running of the apartment/chalet.
Carrying out the apartment inspection.
Management during the client’s stay
Welcoming the client every day of the week and responding to their needs.
Handling any technical problems that may occur in the apartment.
Dealing with tenants who behave disrespectfully towards neighbours.
Management on the day the client leaves and afterwards
Carrying out an apartment inspection independently or in the presence of the client.
Systematically cleaning the apartment even if the tenant has promised to do so in writing.
Returning or depositing the tenant’s deposit following their departure and handling any necessary repair work or purchases.
Responding to all of the tenant’s demands (billing, certificates…)
Managing any complaints that may arise from the client following their departure.
Keeping the owner informed about lettings
Carrying out ongoing maintenance and small repairs
Carrying out deep-cleaning and between-season inventories
Making an annual visit to check the condition of equipment
Alerting the owner to the need to carry out any necessary building work
Writing up the end-of-season management report
Acting as the owner’s representative (as far as is possible) at Commonhold Association general meetings if required
What are security guarantees and damage deposits known as in seasonal lettings? How do they work? When should the damage deposit be returned/retained?
In the current parlance, the security guarantee is known as the damage deposit.
The damage deposit is a way of protecting the owner when damage has occurred to furniture, equipment and/or household objects made available for holidaymakers’ use. Its loss can also serve as a deterrent in the event that tenants fail to behave with good manners and respect for jointly occupied residences (noise nuisance etc.).
The damage deposit amount is a fixed sum (usually calculated according to the number of beds and quality of the property), which must obligatorily be stated in the rental contract.
Payment of the damage deposit may either be required after the rental contract is signed or when the holidaymaker arrives on site. This deposit can be paid in various forms (cheque, bank card, and cash) and the landlord has the right to cash it.
In order to avoid any disputes with the tenants, it is important to carry out a property inspection between each rental period. It is also worth providing tenants with a detailed inventory of the property so they can verify that this corresponds to the actual contents.
Obviously, the tenant cannot be held responsible for any damage to the property recorded when they arrive or any damage that occurs as a result of normal usage or non-functioning equipment.
The damage deposit is usually returned at the end of the stay but if the contract specifies a delay in return, the owner is legally allowed to keep it for a reasonable duration (maximum of 2 months - 15 days on average).
Depending on any recorded damage, the deposit may be partially returned or retained in full.
Following the damage assessment, the estate agency will handle any purchases and repair work required to return the property to its former condition. The sum retained from the damage deposit will be refunded to whoever is responsible for paying for purchases and repairs.
What insurance should you take out to protect a furnished letting? Landlord’s and tenant’s insurance.
You are required to take out property insurance and if you go through an estate agency, you will be asked to provide proof of insurance.
A choice of insurance policies is available. One option is to insure your property, its contents and your legal responsibilities, all under the same policy. That requires a “for the benefit of whomsoever it concerns” insurance policy with a waiver of recourse. That way, your tenant will be covered for any damage they cause to neighbours or third parties. This is a beneficial solution for short stay rentals as it avoids having to verify the insurance taken out by each successive tenant.
Occupants are not required by law to take out insurance for a seasonal letting. However, occupants will be held responsible for any damage caused, just like any other tenant. Therefore tenants must not neglect to protect their responsibilities in this respect.
To avoid any disputes, tenants are strongly advised to pay attention to the following clause in the rental contract: “The tenant agrees to take out civil responsibility insurance (theft, fire, water damage) covering the rented areas (furniture and real property) by the date of entering the rented areas at the latest.”
What should you know about the current tax system for furnished lettings? LMP or LMNP taxation status, local taxes, VAT, tourist tax.
What taxation status should I declare under?
LMP: Professional Landlord of Furnished Property
LMNP: Individual Landlord of Furnished Property
To be considered as a Professional Landlord of Furnished Property (LMP), you must meet the following conditions.
Be registered with the Trade and Company Register as a professional landlord.
Make over 23,000€ incl. tax in annual receipts from lettings.
These receipts must be higher than the total sum of any other business revenue in your tax household.
If these 3 conditions are not met, the landlord is considered as an Individual Landlord of Furnished Property (LMNP).
Whichever taxation status applies to you, furnished property letting constitutes a commercial activity and profits resulting from it are subject to income tax in the industrial and commercial benefits category (BIC).
Return to Question 1 “What is a furnished tourist rental? Regulations and taxation” to see the advantages of classing your property as a furnished tourist rental.
Taxation being a very specialised domain, each case must be closely analysed in its own right. That’s why we advise you to contact a specialist accountant to complete and file your tax return.
Payable local taxes
The furnished property landlord is also subject to local taxation:
Council tax (in lease agreements, this tax may be taken care of by your estate agency).
Property tax (in lease agreements, you can request for your estate agency to pay for refuse removal).
In principle, seasonal lettings are exempt from VAT (article 261 D 4° CGI), unless you are offering hotel services such as breakfast, daily house cleaning, linen supply and front desk services.
Tourist tax is required by certain towns to go towards civil spending on tourist development. This tax varies from 0.20 to 1.50€ (per night, per person) and is payable by the tenant (upon arrival). In Val Thorens, this tax is 0.90€. Private landlords must collect it and pay it to the municipal collector. The estate agency handles it for all others.
However, in Val Thorens, those not staying for the purposes of tourism and children (-12 years) are exempt from this tax.
Good to know: it pays to be involved in the resort!
In Val Thorens, when your furnished property is awarded the official quality label and you can provide proof of at least 5 weeks of rental the previous winter (via an agency or as a private landlord); you can enjoy a reduced rate on ski passes and other activities!
Thanks to your involvement with the resort, you can earn “landlord advantage points” which translate into discount vouchers from participating resort partners: Val Tho Parc, SETAM, French Ski School, some shopkeepers and restaurateurs…
To download your contract and get your discount vouchers, head to Val Thorens’ landlord’s area.
You will also find the Partners Guide here, which explains where and how you can use the vouchers.
Don’t hesitate to contact the property owner service, your official representative, to find out more about landlord benefits and resort news.