Archive for the ‘Relocating’ Category
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Why do people convert hotels to B&Bs?
April 22nd, 2007 | 
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We’ve been following the progress of two of the hotels that we looked at before settling on the place we’re currently running.The first of these that we saw before we met up with the estate agents was a bit large for us in that it was a 30 bedroom place though very central in Perpigian. They were only selling the business too which put us off it as well. Still, quite a thriving place that had been running since around 1850. Just over two years ago, it sported a big sign that said it had been converted into apartments which seemed fair enough as there are loads of apartments in Perpignan and they generally seem to be doing quite well. Not so the hotel though as within the last year, that plan has been dropped and they’re now doing some serious conversion work on it for yet another purpose.
The second of these was the first that we were shown round by an estate agent. It’s the Hotel Maillol which was a four storey 13 bedroom place that was very much on our shortlist as it ticked pretty much all of the boxes on our requirements list. Not only that but it was going for EUR 300,000 which seemed incredibly good value in that it was pulling something like EUR 100,000 a year (very little of it declared though). Occupancy was good and growing and it was pretty much right in the heart of Perpignan yet positioned at the end of a short street so very quiet.
In fact, the price was so good that there were a number of people bidding on it and it didn’t sell for several months ie just over three years ago. Not too long after that, we noticed that there was some serious redevelopment work being undertaken on it which is still ongoing, much to our surprise. Well, after all it was in such a good location that an upgrade to a more luxurious place was an obvious thing to do and would probably have let them keep the occupancy figures up whilst taking the price from EUR 40-odd to around EUR 60 or so.
However, what they’ve actually done is to convert the place to a B&B as you can see. This means that they can’t run more than five rooms so the income will drop considerably.The 100k income was made up, roughly as follows: open 10 months ie 300 days x EUR 40 per room x 13 rooms x 60% occupancy = 93k. However, as a B&B the equation works out as 300 days x EUR 60 x 5 x 60% = 54k. Ordinarily, a B&B in France can pretty much double their income by doing evening meals but that’s only because most B&Bs are in the country and this one is surrounded by restaurants so they won’t be able to do that.
Actually, it’s a little worse than that as the Maillol had been running for quite a number of years and had built up the business considerably. The B&B version has changed the name, closed for three years (it’s not opened even now) and probably taken the room price up a fair bit. The combination of those factors mean that it’s almost certainly lost virtually all of the customers that the Maillol had so it will be reopening from a standing start and will need to build up to that 60% figure.
The final problem is that the occupancy was quite biased towards the summer with getting on for 100% occupancy of the 13 rooms for three or four months and, of course, since the B&B has only five rooms to play with the income over that period will be much lower.
So, why do people do it? Le Crocodile Rouge is far from unique in converting from a hotel to a B&B and we’re just singling them out because we’d looked at it ourselves.
Well, basically because they’re all aiming to create luxury B&Bs and charge a fortune for them. Snag is that there are limits to how much you can charge. Even quite luxurious chateaux only get away with EUR 100 or so and the luxury B&Bs can generally only charge EUR 70 at best. The biggest problem though is that five room limit because the holiday season in France is very much concentrated on around six weeks during July and August when you’d really need to be able to go to more than 100% occupancy but obviously you can’t do that.
Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.Buying a house in France: part 17: Offshore banking
Offshore banks are banks that operate in various tax havens around the world. The most familiar in the UK are the Channel Islands and the Isle of Mann but there are many based in small islands in the Carribbean.
If you’re moving abroad, it can be useful to have an account with one of these banks both to simplify your taxes a little and for the additional services that many of them offer to the expat community. None of the legitimate centres offer tax-free interest on your accounts these days but offer you two options for the interest on your accounts: 1) a withholding tax roughly equivalent to the tax that you would normally pay in your country of residence and 2) no tax but they report your income to the authorities in your country of residence.
Although no longer taxfree, the additional services that many of these banks offer can still make them worthwhile. Even the simplest of them are much more familiar with international bank transfers than a normal high street bank could be expected to be but most go beyond that offering multi-currency accounts, debit cards in a range of currencies and often expat advisory services.
On the whole, the range of services on offer increases in proportion to the increase in the minimum income that the banks ask for. A reasonable compromise with this seems to be Abbey International which offers accounts and debit cards in pounds, euro and dollars for an opening balance of £5000.
Most people will think of Switzerland in terms of “offshore” banking, but is there anything special about it? The banks there are generally more aware of the needs of international clients but this generally comes at a price. By and large, unless you have fairly sizeable amounts of money (say 25,000‚€ upwards) to deposit or invest, they probably aren’t worth it. However, even the post office in Switzerland is geared up for international clients and in this case a relatively modest amount of money (about £3,000) will get you quite economical banking.
We’ve included a list of the main banks operating in this arena in the directory which should let you choose the perfect combination of prices and services for you.
Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.Strawberry, honey, truffles, you name it, they’ve got a festival for it!
With start of April starts the onslaught of the festivals for just about every fruit, vegetable or drink you could name.The one problem with them is that you’ve really no idea in advance whether or not a given festival will be a popular one or just a few stalls trying to sell some obscure vegetable.
One of the best we’ve been to lately was the strawberry festival at Bellesta which is a village quite close to us but one we’d not been to before. They were lucky enough to hold the festival on a particularly sunny day following some of the last of the Winter rain. Combine that with the Vide Grenier (car boot sale or flea market) and the village was seriously struggling under the weight of traffic and people looking for parking spots on the day.
In fact, there were only two small stalls selling strawberries but the other stalls gave a very good representation of the local produce ranging from excellent honey as you can see, through the spicy sausages that you find everywhere here, and olives. Strangely, the wine makers didn’t have a big presence but then there are numerous wine festivals from now through to harvest time.
The majority of the festivals are only publicised locally so it’s potluck as to whether or not you’ll see the sign for one as you travel along the road. Larger villages are generally a better bet than small ones but really you can get a wonderful experience from even the tiniest village which is, of course, as happens in what we’d call church fetes.
Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.buying a house in France: part 16: banking & finance: the UK
Even if you are intending to live the rest of your life in France, you should resist the temptation to close any UK bank accounts or credit cards. The only exception to this is, possibly, for those accounts/cards which have an annual fee.
In addition to the accounts which you already have, you may find it useful to open others as the international dimension changes how you use accounts. For instance, if you have a holiday home in France you’ll obviously be transferring money from pounds into euros much more than you were previously.
The range of accounts in the UK is massive and therefore we can only give an indication of those that you might find useful here; the reference version of this guide will be more comprehensive.
The Nationwide Building Society Flexaccount (cheque account) is a must. It gives you entirely free transfers from pounds to euro and, at the moment, is the only truly free currency exchange service. Their credit card comes close behind with free exchange on purchases.
Beyond that, if you are going to live in France, it’s useful to open credit cards with a number of card issuers. In general, you will not be able to do this if you are living in France and neither can you easily get credit facilities in France so it’s useful to have a number of UK cards as a fallback should you need it. The main issuers are Capital One, the Co-Operative, GE, Halifax, HSBC, LloydsTSB, MBNA, Nationwide and Royal Bank of Scotland (most other cards are rebranded versions of these eg Sainsbury is really Halifax). It’s worth getting an American Express credit card too as you can transfer the account to France, although as the charges in France are considerably higher you may not want to do that right away.
Cheque accounts are also useful to have. If you qualify for the HSBC Premier service, they’ll open an equivalent account with HSBC France for you which has the additional advantage that you get free transfers between your UK and French accounts with them. Barclays and LloydsTSB offer a similar (but more expensive) service though their branches are largely confined to Paris and the Cote d’Azur. The Barclays account offers withdrawals with no transaction charge at BNP-Paribas machines in France (you are still charged 2.75% on the exchange rate). I used to recommend Citibank a lot but they have increased their charges substantially and it’s not as clearly a useful account for expats as it once was.
The Nationwide account is excellent if you are in France and need to transfer relatively small amounts of money from the UK but the £500 per day (about 750‚€) limit means that it’s not practical for large amounts such as for your house purchase. You can use your own bank for this but the charges are generally quite high and the exchange rate isn’t particularly good either in most cases. To transfer more than a few thousand euros you are best to open an account with one of the specialist companies such as moneybookers; if you are going to be making regular transfers (eg paying for a French mortgage from a UK account) then HIFX offers a facility for this.
If you are retaining your house in the UK as we recommend, then you will probably need to change the mortgage to a buy to let one. It’s best to do this before you leave the UK as there are a relatively small number of brokers who deal with overseas clients.
The field of investments in the UK is even wider than the range of banks. However, most seem prepared to change your address to an overseas one. However, if you don’t yet have a UK broker or similar it’s worthwhile opening an account with one before you leave as few will open accounts for overseas clients. We’ll cover it in more detail later but at this point it’s worth mentioning that having a SIPP (Self-invested personal pension) account open is also useful.
If you’ve not yet ventured into this arena, a few useful accounts to have are the Halifax sharebuilder (which lets you buy shares monthly), Fidelity’s Funds Marketplace (which lets you buy numerous unit trusts) and TD Waterhouse brokerage. All are free to open.
As always, you can find links to sites we have mentioned in the Foreign Perspectives directory along with other similar outfits which we haven’t had the space to mention here and the reference version of this entry on our Living in France pages is more complete.
Although you can open offshore bank accounts after you leave, it’s best to open your choice from the above before you leave the UK as it can be difficult or even impossible to do it after you leave.
Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.Why are there no wetbacks in Europe?
I recently came across Immigration Orange which covers immigration issues primarily in America but increasingly worldwide.When I thought about the things that they cover, it struck me that there don’t seem to be any Canadian wetbacks nor do there seem to be any in Europe. For those that don’t know “wetback” is the (derogratory) term used to describe illegal immigrants in America, essentially because the border is marked by the Rio Grande and therefore in times past they could be picked out by having wet-backs from crossing the river.
Legal immigrants to America fall broadly into one of four categories:
- Employment-based preference, essentially those who have skills that are in demand;
- Family preference, which allows people to sponsor close relatives;
- Diversity, which aims to increase the numbers of under-represented groups; and
- Refugees
There aren’t any Canadian wetbacks for the simple reason that it’s relatively easy for a Canadian to live and work in America quite legally therefore the number of Canadian illegal immigrants to America is much smaller than it would be otherwise. Aside from that, the Canadian economy is on a par with that in America so there are very few economic migrants whereas this is by far the largest category of immigrants from Mexico.
However, those reasons don’t apply in Europe. With the fall of the Eastern Bloc we have neither the fences nor the border guards so it’s clearly much easier for people to just walk over the borders than it has been in the past. Yet, still we appear to have neither the number of illegals nor the complex about them that exists in America. How come?
It seems to me that it’s largely down to the difference between the economic geography of America compared to Europe.
America borders with two countries. Canada is relatively rich and there seem to be no worries about illegal immigration from Canada. Mexico is relatively poor and the Americans are talking about building a wall to keep out the flood of illegal immigrants.
Europe on the other hand has a group of relatively rich countries in the centre, slightly poorer ones surrounding it and poorer still a little further out. Therefore, by and large, there isn’t the massive jump in relative economic prosperity when you move from one country to its immediate neighbours as there exists between Mexico and America. Move from Romania to Bulgaria and there is little difference. Move from Romania to France and there’s a big difference but then there are several countries between Romania and France whereas Romania and Bulgaria share a border.
Of course there are illegal immigrants in Europe but their numbers are a good deal smaller than they would be were there the sharp difference in prosperity in neighbouring countries as exists between Mexico and America.
Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.
