Investing in the Mountains

Are you attracted to the idea of ​​investing in the mountains but don't know where to start? Cimalpes, your specialist in buying and selling in the Alps, explains why and how to invest in the mountains.

The mountain: an ever-popular destination

Despite the current global health situation, the real estate market in the mountains is not deteriorating, and the snow-capped peaks still seem to attract visitors year after year. Indeed, both French and foreign visitors have never ceased to show their interest in the beautiful mountain landscapes and the pure air of high altitude, in particular during the past two years. Thus the number of buyers is always high and in fact, transactions have actually increased in the Alps region.

And with good reason! The famous resorts of the Alps, such as Courchevel, Méribel, or Megève, record an occupancy rate of around 90%, enough to reassure you about the profitability of a real estate investment in the mountains! It should be noted, however, that these figures are only based on the Alps region and not the Pyrenees, which are still struggling to achieve an attractive return for buyers.

If you are thinking of investing in accommodation in the mountains, rest assured, this popular destination still seems to have a bright future ahead of it.

Investing in the mountains, a thoughtful purchase

Although the Alps are a popular destination, investing in the mountains must be a carefully thought-out purchase, taking into account many criteria in order to ensure profitability over the long term.

Purpose of purchase

First of all, it will be necessary to determine the main objective of your purchase. Is it a pleasure purchase to get yourself a second home? Is it a pure rental investment which will only aim to welcome visitors? Or do you want to make it a mixed project, occupied by yourself at times but available for rental when you are not in the mountains? Once you have determined your objective, you can choose the type of housing that best suits your use.

Location

Buying accommodation in the mountains means taking into account a major element: the duration of snow cover. As this is gradually reducing, it is necessary to invest at higher altitudes in order to be sure to benefit from optimal snow cover. In addition, it will also be wise to choose a location close to a ski resort that remains open during the 4 seasons, in order to increase the profitability of your accommodation. In this way, you'll be able to attract guests throughout the year and not only during the middle of winter. You ensure constant occupancy of your home while also increasing the number of potential buyers in the event of resale. It should also be noted that accommodation with ski-to-door access remains the most coveted, both by future tenants and potential buyers.

The choice of the resort, as well as the sports which can take place there, will have to be carefully considered as you make your decision. Also, remember to check the other activities offered around your accommodation: spa, aquatic area, walks. remember, more options are always a good idea!

Investing in the mountains, at what cost?

All these previously mentioned criteria will strongly influence the total price of your property. Thus, if you wish to invest in Savoie, it will take a budget of around €86,000 for a studio between 22 and 25 square metres for certain resorts and up to €280,000 in the most popular resorts in the Alps. It is very difficult to know the fairest price of a property without fully understanding the real estate market and the specificities of each resort. Thanks to our real estate specialists and our agencies in the alpine resorts, we can help you find out the price of a real estate investment in the mountains.

Taxation: a factor not to be forgotten

Depending on your objective, the type of property to buy will have to be adapted, thereby modifying the tax criteria. Thus, a purchase of a property to be used purely as your second home will present a capital gain only on resale or for the benefit of future generations. For a mixed investment, it is advisable to look into setting up a tourist residence with multiple services. This will allow you to occupy your accommodation whenever you wish while benefiting from regular maintenance by dedicated teams, without having to worry about anything during your absence! At Cimalpes, for example, we offer a range of para-hotel services, allowing you to benefit from VAT exemption. Finally, if you want to make a pure rental investment, the LMNP tax status (non-professional furnished rental company) remains an advantageous option to allow you to enjoy tax exemption on your rentals during the first 20 years. Note that this method also allows you to occupy your accommodation for a maximum of 6 months.

Buying a property in the mountains: is it still profitable?

If you are wondering if investing in the mountains is still worthwhile, the answer is, without hesitation, yes! Indeed, with rates currently reaching a historic low because of the global health situation, now is the time to get started and take advantage of the leverage effect of mortgages.This new year also brings its share of novelties. Indeed, some large resorts have become eligible for the Pinel system, allowing you to buy new properties in the mountains while benefiting from tax exemption of up to 6000 euros per year.

Finally, as new developments are extremely rare in the mountains, investing in new real estate now will allow you to build up a solid real estate portfolio that will increase in value over time.However, be vigilant on two points before you start: do not forget to calculate the profitability of your accommodation before investing, as the rental of your property is always subject to the seasonality of the resorts. Also, don't forget to take into account your future condominium and maintenance costs, especially if you buy something old, as heating costs can quickly become substantial if your home does not benefit from good insulation.

Are you ready to start planning your purchase in the mountains? Our teams of specialists at Cimalpes will advise you and support you in organising your property investment in the mountains.