Category Archives: Advice

I want to run a Chalet Business in the Alps

7 Replies

I used to get asked this question twice a week.

“How do I start a chalet business in the Alps?”

I think 2005/6 was the peak. Everyone wanted to move to the Alps, sometimes it was 1 in 4 of the enquiries we received . There was a lull in interest from 2008 to 2011 but the question is returning now. Not to the same level but maybe once a week.

Pic de la Corne 2014

I have learnt over time that the question should really be phrased a bit better. Perhaps:

“how can I make a life in the Alps?”

would be more appropriate. I think the reason that most people assume a Chalet Business is the way to do it is because most people that have gone skiing have witnessed at first hand a chalet business. The holiday cost them €800 so the embryonic business plan started over the dinner table.

€800 x 10 people staying in the chalet = €8,000

€8,000 x 16 weeks for the season = €128,000

That sounds like a lot of money! There must be a margin there?

Obviously you need a chalet or even better a small hotel, then there are the usual bills, food and linen to pay for too but surely there is a fair living to be made? And that’s not including the summer business. Right, sign me up, where do I start?

Well I’ve been there. Now I earn my living from my full time job with Alpine Property I’ve also worked a couple of winter seasons, I did run a chalet business (mostly summer based) for 10 years and now I live in the Alps with my wife and 3 children. Surely living proof that it’s a good idea? Well “Yes” and “No”. I’m now going to give my advice. Feel free to take it with a pinch of salt!

My first bit of advice is “don’t do it”. Well don’t start the chalet business that is. Living in the Alps is a great idea! Have a look at your skills, can you carry them over to the Alps and keep working? That’ could be a possibility? And it might be better in the long term. There are plenty of people that live in the Alps and make a living here or based from here. These are the trades I know of:

Accountants, #pilots, #lawyers, journalists, IT experts, various consultants and #project managers, guides (walking / biking / climbing), ski instructors, electricians, carpenters, plasterers, plumbers, builders, bankers (in Geneva), doctors, nurses, #engineers, estate agents, interior designers, graphic designers, photographers, artists, writers, teachers, taxi drivers, hotels owners and hospitality workers….

The professions marked as # generally work away from home and use the Alps as a base. There are bound to be more, these are just the ones I know personally.

Alpine Property Team Meal 2011

Even with the various jobs I have mentioned there are some fairly thorny issues that you need to take into account. Living in another country is the main one. Of course there is the language but that isn’t half of it. The French have a different attitude to life and this should not be forgotten. In fact it’s crucial. Before I came out I read “60m Frenchman can’t be wrong”.  I read it but I didn’t really understand it. I’m still coming to terms with that 14 years later. I’ve three observations to make on this subject.

1. France loves rules. The French pretend they don’t. The state loves rules and regulations though and as far as a profession or job goes you would be well advised to find out about the rules and work within them. In contrast the UK seems to have no rules. Commerce seems to be something that anyone can try their hand at. Not so in France.

2. France is a socialist country. When labour governed in the UK (in my lifetime) they were only pretending to socialist. When Sarko was in charge in France he was only pretending to be right-wing. The fact is it costs a fortune to run a socialist country and this will need paying for. The cost of living in France seems high compared to the UK, everything costs more (almost everything) and everything in a ski resort costs more than that! It seems that in general the French are taxed considerably more that in the UK, this means that everyone needs to charge more to break even.

3. The French value their time off. Be that eating times or weekends. Never get between the French and lunch. An Anglo Saxon might find this funny but if you are French it’s deadly serious. It becomes before business. No question.

So if you don’t feel that you can carry over your current skills and you still think running a chalet is the way forward then hang on! I’ll go on to explain some of the issues and pitfalls in the next post.

PT 2, updated in Dec 2016.

Skiing and Saving: Renting your Alpine Property!

The apartment itself is set up for the rental market and has a solid existing client base, as well as a website that can be transferred to the new owner. With about €14,500 taken in bookings already for the season 2013/14 (which would be passed directly to the new owner), this property comes with a guaranteed return-on-investment of 5% GROSS ROI for the coming season.. That’s 10 times better than the Bank of England’s rate!

Chalet for sale in Les Gets

Chalet Frollie: €695,000 This 5 bedroom, 4 bathroom chalet is perfect for the rental market. Low maintenance, it means that management from afar is very low-hassle. Less than 5 minutes walk from the nearest ski-lift and the village centre ensures all the action is nearby, but the chalet itself is in a nice quiet neighbourhood. Perfect for family rentals! With an annual turnover close to €35,000, a solid client base and an established website, this chalet also offers a fabulous investment opportunity.

If you’d like to know what the annual costs are associated with these rentals please let me know via the contact form on our website. This will make the NET ROI easy to work out. It’ll beat the current rate of inflation which is 2.4% and that leaves capital appreciation which is doing well at the moment.

With the massive growth seen lately in road biking and triathlon holidays boosting summer rentals, and the well established family and mountain biking holidays the investment potential of a property in the Alps can only continue to grow!

We’ve written an article here on the different ways to gain a rental return.

Good reasons to buy in the Alps

The first one is in The Times, it’s topical as it features Vallorcine (see Chalet Regards above) in it’s article “Where to ski this winter”. Here is a link to the article, and a little image too.

http://www.thetimes.co.uk/tto/travel/holidays/wintersports/article3885982.ece

The Telegraph has the “Worlds best ski runs”, the Haute Savoie gets one, the Swiss Wall in Champery, though they claim it’s in Avoriaz, France, doh!

http://www.telegraph.co.uk/travel/snowandski/features/10356840/The-worlds-best-ski-runs.html

and the best family ski resorts, Avoriaz again and Flaine.

http://www.telegraph.co.uk/travel/snowandski/10339051/The-best-family-ski-resorts.html

The Guardian went left-field with an article by Andrew Gilchrist, very engaging too with loads of comments.

http://www.theguardian.com/travel/2013/oct/04/italian-dolomites-ski-snowboard-safari

Giving your chalet a makeover

The final stages of finishing off a renovation are often overlooked, the furnishing and decorating of the newly renovated apartment or chalet is often left to the owners to undertake – a daunting enough task close to home! Many of the renovation projects managed by members of the Alpine Property team are finished off by professionals, you’d imagine that this would increase the cost even more, it doesn’t have to. Especially if you take into account the amount of time you would need to finish the job. Time better spent enjoying the finished product!

Liz Ockelton – MAKE SPACE DESIGNS (www.makespacedesigns.com) has completed a number of projects for Alpine Property. Here are some of the results.

1. Chalet Robri in Morzine.  Situated in out of the  most sought after locations in Morzine and well worth going to some effort to present in the best possible light.

1. Chalet La Roche SAMOENS – sold by Denis Barbier of Alpine Property renovations completed by MSD adding an extra bedroom and now 4 new bathrooms. The original property listing is here. A selection of photos of the updated chalet are below.

2. La Christiana MORZINE – sold by Lee Massey of Alpine Property though before it ended up on the website. Newly furnished by MSD.

3. This BONNEVAUX farm, sold by Claudia and Ed. Chalet Bonnevaux. The original listing is here, this old farm was habitable but it has now been renovated. Below are some images of the construction and renovation work.

Renting Property in the Alps, advice and tips

Virtually all the properties we sell are sold freehold and there will not be any restrictions on renting, in fact gaining a rental return is an essential part of many peoples requirements.

As far as renting via an agency is concerned there are many to choose from. It really depends on which town you are considering. Much of what I have written below is Portes du Soleil biased, this is where I work!

There are a number rental options, each with advantages and disadvantages. They are not all available to all properties! I will list them as I see them. The first offers lowest risk for least return, the balance moves from return to risk as you descend the list!

Renting Options

OPTION 1a. You can choose to rent your apartment on a yearly basis, for a fixed fee to a company that specialises in self-catering holidays. You can negotiate some weeks for yourself or you can negotiate a discount for weeks you want to rent.

Example: Alptitude, a specialist in Morzine
http://www.alptitude.com

Advantages:

  • Most secure form of rental return
  • If you choose the tenant carefully they will look after the property well, dealing with maintenance issues, taxes, Internet etc.
  • Minimum input from the owner

Disadvantages

  • Offers the lowest returns
  • Property will need to be in a good location, this type of company will see that as a priority.

OPTION 1b. Similar to the option above but with a little more risk. There are some companies that specialise in finding long term lets aimed at “saisonniers”, so people who rent for the whole season. You will need to check the tenants in at the start of the season and out at the end but beyond that it should be hassle free.

Example: Live The Season, http://livetheseason.com/owner.html

Advantages:

  • Full Seasons income paid before the season starts.
  • Higher return than 1a (annual lets)
  • Minimum input from the owner
  • Location of the property is less critical than the option 1a.

Disadvantages

  • Higher returns are available with the options below.
  • No time in the winter for the owner to use the property.
  • Unless there is a provision to periodically check on the state of the rental there is a risk the tenants might not look after the property.
    apartment for sale in Les Gets

OPTION 2. You can use one of the independent chalet operators in the area, these companies often have one chalet that they run catered holidays from and then up to a dozen they arrange as self-catering. This type of company will often try to negotiate a percentage fee (up to 30%), for this they will arrange the booking, key holding and the cleaning etc.

Example:

The Great Escape
http://www.thegreatescapemorzine.co.uk/
Example: Mountain Highs
http://www.mountainhighs.co.uk/
Example: Ski Fusion (based in Les Carroz)
http://www.skifusion.co.uk

Advantages

  • There may be the occasional unbooked week that could be used by the owner for a cheap holiday at the last-minute.
  • More flexibility for booking in friends etc.
  • If there are good bookings this can offer better returns than choice 1

Disadvantages

  • Riskier for the owner as they don’t offer any rental guarantees, this risk can be reduced by choosing an established company.

OPTION 3. You can use an Internet based agent who will handle all the booking and cleaning, in theory for a lower percentage fee (20%-35%)

Example: White Peak a specialist in Chatel.
http://www.white-peak.com/
Example: Alps Accommodation a specialist in Samoens. http://www.alpsaccommodation.com/
Example: Holiday in the Alps a specialist in renting properties in St Gervais http://www.holidayinalps.com/

Advantages

  • There may be the occasional unbooked week that could be used by the owner for a cheap holiday at the last-minute.
  • More flexibility for booking in friends etc.
  • If there are good bookings this can offer better returns than choice 2
  • Internet based administration can be convenient

Disadvantages

  • Riskier for the owner as they don’t offer any rental guarantees, this risk can be reduced by choosing an established company.
  • If the agency does not care about your property the wear and tear can be quite high. This can depend on their clientèle too.
  • Choose your Internet based agent carefully, they can be excellent but there is more room here for cowboys.

OPTION 4. You could use an Internet based “Bulletin Board”, these businesses charge a fee for you to advertise, you handle the booking and arrange cleaning and key holding via a local person or agency. My Mum uses Owners Direct for a property on the outskirts of Morzine, it costs about £200/an to advertise, she does very well and uses a local girl for the cleaning etc. This method is a lot of work for the my Mum and offers no guaranteed income but it can offer the best returns. In addition the renter can’t book with a credit card and they are not booking with a recognised “agent” or “bonded holiday company” so they don’t have much backup if the holiday goes wrong in some way (for instance in the case of a double-booking).

Examples:
http://www.chaletfinder.co.uk/
http://www.ownersdirect.co.uk/

Advantages

  • There may be the occasional unbooked week that could be used by the owner for a cheap holiday at the last minute.
  • More flexibility for booking in friends etc.
  • If there are good bookings this can offer better returns than choice 3
  • More “hands on” can be more fun and it may give the owner the chance to “vet” the occupiers.

Disadvantages

  • Riskier for the owner as there are no rental guarantees.
  • The owner will have to find local people to deal with the changeovers / cleaning and any problems.
  • If there are problems or damage the owner might be called upon to arbitrate, this can be difficult on the phone!

OPTION 5. The traditional method, use one of the local French estate agents or the local Tourist Information Bureau , they will take a fee (about 25%) and handle the bookings and cleaning for you. This should probably be put between 2 and 3 in the income VS risk list.

Advantages

  • An established system, will probably be entirely legal.
  • Local agents normally have very good contacts with local tradesmen.
  • You may find that a particular agent will have an affiliation with a particular apartment block, this can help.

Disadvantages

  • No guarantees though, the owner will take all the risk. You will do better in the best locations. You might get nothing in a bad location!
  • Just because the agent has good contacts with local tradesmen it does not mean any maintenance work will come cheap.
  • Choose wisely, not all agents are fully Internet or email aware yet, this can come as a shock.

Confused about renting? You shouldn’t be. I am just illustrating how this is a very mature market and that there are a lot of options open to you.