Expat Life In Bearn, France


The Secret To Enjoying The World’s Best Quality Of Life

March 13, 2011, Bearn, France: If you’re tempted by the idea of living, retiring, or owning real estate in France, the good news is that it can be far more affordable than you might imagine.

Also This Week: Paris Property Values At All-Time High–But Here’s Why You Should Still Considering Buying In This Real Asset Safe Haven…Plus, Of Course, Not All France Is Nearly As Costly As Paris…Preparing For The Intended And The Unintended Consequences Of The U.S. HIRE Act…

Dear Overseas Opportunity Letter Reader,

After seven years in Spain, Euro-Correspondent Lucy Culpepper and her husband decided it was time to try a new lifestyle on for size.

How to choose a new country?

They’d take off for an extended scouting mission, they decided, with their two young children in tow.

As Lucy explains:

“We agreed we’d spend a year or so trying out different places. We wanted to do this before our children, then 6 and 10, got too old to appreciate the adventure (or the time with us!).

“We focused first on the Caribbean coast of Mexico, at Merida. We’d done a lot of research and thought we’d really love this part of this country. We rented a house in Progreso, the beach town outside Merida, for a month.

“We knew within the first 24 hours, however, that this place was not for us. It was too hot, too flat, too arid… We stuck out our month here but couldn’t wait to move on.

“Next we tried El Valle, Panama. This place we loved. Cooler climate, rolling hills, and much greener. This area outside Panama City is so lush. The trouble was there was no international-standard school in this region of Panama. So, while we really enjoyed our time here, we knew we’d have to move on.

“While in El Valle, other expats we met recommended we take a look at Costa Rica. This country, in the mountains outside San Jose, could offer just what we were looking for, they thought–lush landscapes, cool climate, and, critical for us, good international schooling options.

“Again, we rented a house for a month. On paper, as those we’d been speaking with had explained, this was a perfect fit. But we didn’t feel comfortable…or safe. All the expats we met had invested in gates and grills and glass-encrusted walls around their properties. Home break-ins are very common, we found out. We didn’t feel good about raising our children here, and even our easygoing children found the attention they got a little unnerving.

“Then we had a family emergency in the United States. It was good timing, as the six weeks we spent in the States gave us a chance to regroup. We decided we wouldn’t return to Costa Rica…and we came to a more fundamental decision, as well…

“What we really wanted, we realized, was Europe. We’d been so happy in Spain all those years. Central America just wasn’t working for us.

“More research led us to France, where we’ve been happily installed now for more than two years.

“After decades traveling around the world and spending time in dozens of countries, I can say with confidence that, for me…and for many other expats, as well…France simply offers the best quality of life in the world.

“We’re in the Bearn, next-door to the Basque region in the southwest of this country. The lifestyle here is relaxed, and the community has been very welcoming. We feel completely at home and safe. The crime rate is exceedingly low. We have no sense of insecurity…

“Plus, this part of the world is historic, cultured, and beautiful. As I’m writing this, I’m watching out my window as the sun is setting on the Pyrenees…”

Lucy has brought all this firsthand experience to bear in the new “Live and Invest in France” manual that she has just completed for us. Lucy’s comprehensive guide to living, retiring, owning real estate, enjoying yourself, even raising a family in this glorious country is in production now. When it’s complete, we’ll bundle it with the three region-specific France Retirement Guides Lucy has also written…as well as the complete set of audio-recordings from the two days of meetings we convened in Paris with key experts on residency, taxation, banking, purchasing real estate, obtaining a local mortgage, running a business, medical care, health insurance, and every other topic of importance to the would-be expat or retiree in France…to create our all-new Live and Invest in France Kit.

All the pieces of this new bundle of Continental resources will be finalized later this month. Meantime, if you, like Lucy (and me!), are tempted by la vie francaise, you can purchase this one-of-a-kind collection of France resources pre-release and save 50%.

The details are here.

Kathleen Peddicord{module Issues Ad 8}

P.S. What else this week?

  • Property values in Paris were up 16% in 2010,” remarked our French friend Vincent over dinner one night in Orland, Florida, last week. “The market took a big downturn in 2008, along with much of the rest of the world, but it surely has recovered. Prices in Paris are at an all-time high right now.”

Lief, who has been following this trend, is delighted, of course. Our apartment in Paris, purchased about seven years ago, is right now worth more than two times what we’ve got invested in it, between the purchase price, the acquisition expense, and the cost of the renovation we carried out.

Furthermore, the Paris apartment market is viable, active…meaning this is an asset we could probably liquidate with little trouble if we wanted to.

Will we sell?

That is, is it time to take profits out of this market and move on?…

  • We found Orlando expensive during our visit last week. Lief insisted that, when we returned to Panama, we’d be eating out at the US$2.50-a-plate local-style restaurant down the street from our house for several days at least. He had his fill of high-priced dining.

Meantime, Vincent, a French friend also visiting Orlando last week, found the city a bargain. “Even the best restaurant in Orlando,” he concluded, “is less costly than everyday restaurants in the 7tharrondissement of Paris, where I’m normally dining out.”

Central Paris is no bargain, and the 7th is one of the most expensive zones in the city, not only for restaurants, but also for real estate.

As I mentioned, property values in Paris have been moving up for the past 12 months at least. The current per-square-meter average, citywide, is 7,300 euro. That’s an increase of 17.5% over the citywide average of 12 months ago.

Even as prices reach historic highs, demand continues. Chinese, Brazilian, and Russian buyers, especially, continue to see this city as one of the world’s safest long-term investment bets, a good place to park capital. We agree.

Paris is divided into 20 districts, or arrondissements, numbered in an outward spiral starting in the center of the city on the right (or northern) bank of the River Seine. The most sought-after of these, the “best” in terms of typical Parisian experience, are the 1st, 4th, 5th, 6th, and 7th, all near the river in the heart of the city…and all at the top of the property pricing scale.

The lowest property prices in Paris right now are in the 18th, 19th, and 20th arrondissements, followed by the 10th and the 13th.

Every arrondissement is distinct, a village or small town unto itself, with its own character. For example

  • Given that the average cost of an apartment in Paris right now is about 7,000 euro per square meter…a place of but 100 meters (about 1,000 square feet) sells, on average, for 700,000 euro. At the current exchange rate, that’s about US$1 million.

Not all Paris is that expensive and not all Paris apartments are that spacious. One-hundred square meters is considered quite comfortable by Parisian standards. More typical might be 60 to 80 square meters.

Nevertheless, Paris, obviously, is the highest-priced property market in France (and one of the highest-priced in the world). The good news is that not all France is nearly as costly a place to call home.

In the Basque region, for example, in France’s southwest, where Euro-Correspondent Lucy Culpepper has been living for more than two years, you don’t need anything like US$1 million if you want to invest in a place of your own. Lucy suggests that 200,000 euro would be a very reasonable property budget in this part of the country. For this, you wouldn’t buy big (maybe 50 to 60 square meters), but you could buy new or old and renovated and certainly comfortable.

Buy unrenovated, and this budget can afford many more square meters. Lucy wrote recently of a four-bedroom, 202-square-meter house, dating from 1630, overlooking the river in St. Palais, on the market for the equivalent of about US$170,000. This was in the interior of the Basque region, about an hour from Biarritz

  • “Long the champion and beneficiary of free trade and the free flow of capital,” writes international tax attorney Joel Nagel this week, “the United States last year enacted legislation that a growing number of commentators and professionals believe could be the start of capital controls in America.

“The provisions are found in a jobs’ bill, H.R. 2847 (also known as the HIRE Act), which became law in March 2010. Title V of the law largely encompasses the Foreign Account Tax Compliance Act of 2009, or FATCA, also referred to as the ‘Offset Provisions’ of the bill.

“On their face, these provisions appear intended to force U.S. tax compliance with regard to foreign accounts and transactions between the United States and individuals in countries that are considered to be tax havens (meaning the banks and financial institutions in those countries do not share account information with U.S. authorities).

Also This Week…from resident global real estate investing expert Lief Simon:

Down markets worldwide continue to create interesting buy opportunities for both personal use and investment.

But invest in a piece of real estate in another country? What should you buy and where? These questions can seem intimidating if you’re considering them for the first time.

Start by understanding why you’re buying–for investment or for personal use?

The answer may not be clear-cut. And the best case is when you find a piece of real estate in a place where you want to spend time that also holds out the potential for an investment return (in the form of capital appreciation and/or a yield from rental).

State your objectives and exit strategy expectations clearly for yourself and for anyone else buying with you. Every decision you make related to the eventual purchase is affected by the property’s intended use. If you’re buying straight up for profit, every decision is based on the numbers. If you’re buying for personal use, even part-time, you’ll make your choices based on many things, including some that can’t be quantified in a spreadsheet.

Now that you understand why you’re buying, you need to decide where you want to buy what. I’ve been making specific “recession-market” recommendations in recent weeks (and will continue to do so). As you consider them (and the rest of the globe), think about:

  • The Path of Progress. This is a key factor when buying for investment but important if you’re buying a retirement or second home abroad, as well. What infrastructure improvements are planned? A new airport, new train station, new highway, new hospital, etc., can mean a new universe of potential buyers…which is good news if you’re buying as an investor looking to develop or to flip. These things, though, also translate to better living.

  • Inventory Supply and Demand. In Panama City, right now, for example, a glut of high-rise condos is coming online. These units were launched and sold pre-construction over the past two-plus years. Now they’re being delivered…and their volume is one reason Panama’s capital market continues to soften.

  • Costs of Acquisition. Remember that they go beyond agent commissions. Depending on the market, they can also include: legal fees, notary fees, registration fees, title insurance (we strongly recommend it), and transfer taxes (sometimes called “stamp duty”). In Ireland, for example, stamp duty can be as much as 9% of the purchase price.

  • Carrying Costs. Including: maintenance (a house on the beach requires a lot of it, for example); a caretaker (if you won’t be in residence full-time yourself); property taxes (not every country charges them, and, in some countries, they’re negligible); income taxes (if you’ll be earning rental income); capital gains taxes (when you eventually resell…again, not every country charges them); other local taxes; property management expense (you’ll need a property manager if you intend to rent); rental management expense (separate from property management and, again, necessary unless you’re going to manage all the details of your rental investment yourself…something I don’t advise); and homeowner’s association/building/condo fees.

  • Economic Outlook. Critical if you’re buying for investment, but you don’t want to ignore the market climate even if you’re buying purely for personal use. Markets move up and down…and then up again. At what point in this cycle is the market where you’re thinking about buying right now? In which direction is it moving?

  • Opportunity for Diversification. In terms of market, type of investment, type of property, and currency.

What kind of property should you be shopping for? Again, consider why you’re buying. If it’s for personal use, how much space do you need? If you intend to rent the place out when you’re not using it, understand what rents best on the local market. An apartment or a house? One bedroom or two? Think in terms of cost per square meter when making comparisons.

Where do you want to be? In the heart of downtown…or out in the country? On the coast or overlooking a river? In a gated community, a local neighborhood, or off on your own with undeveloped acres between you and your nearest neighbor? Consider climate, traffic patterns, transportation (where you settle determines whether you’ll need to invest in a car, for example), the convenience factor, and nearby amenities (shopping, restaurants, nightlife, parking, etc.).

Furnished or unfurnished? If you buy unfurnished, where and how will your source furniture?

Finally, what’s your budget? Everything follows from this. Have clear budget parameters in mind before you start shopping, and don’t forget to include the costs of closing, attorney review, other due diligence, and title insurance.

If you aren’t already holding a sizeable portion of your assets outside your home country, I strongly recommend that you make this a priority agenda. And a portfolio of international real estate holdings should be an important part of your going-offshore strategy.

First, if you’re an American, real estate is one of two assets you can hold offshore without triggering a reporting requirement to Uncle Sam (the other is gold). The real estate you hold in another country is your own business.

Plus, it’s unseizable. How is the IRS going to take your condo in the Philippines?

You don’t have to be super rich to take up the idea of buying real estate offshore as a means of protecting your wealth. Opportunities to buy land, houses, and apartments, for both investment and personal use, exist at all price levels.


The World’s Best Quality Of Life Can Be More Affordable Than You Might Ever Imagine…

Hands down, no contest, France is the best place in the world to seek out what qualifies no question as a rich and full life. The history, the food, the shopping, the dining, the architecture, the art, the gardens, the parks…

Plus the world’s best health care, best infrastructure, most beautiful, most romantic city…

Don’t deny or delay your dreams of la vie française because you’re worried you can’t afford them.

Not everyone is cut out for life in the Tropics or the developing world. If you are more tempted by Old World living, don’t despair. The best quality of life the world has to offer can be much more affordable than you might imagine, especially when you understand the secrets to enjoying la vie francaise even on a budget. Read on for details…{module Issues Ad 9}



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Live And Invest Overseas

Live and Invest Overseas is the world's savviest source for top opportunities to live better, retire in style, invest for profit, do business, and own real estate overseas. Established in 2008, the Live and Invest Overseas' editors and correspondents have more experience researching and reporting on top opportunities for living well, investing for profit, doing business, and owning real estate around the world than anyone else you'll find.