Charm, Value, And Cash Flow—The Best Place To Buy An Apartment In Paris Today
“The French property market took a hit in 2008 and 2009,” explained a friend with a mortgage brokerage firm in Paris over lunch one day last week, “but not nearly as big a hit as other property markets in Europe. Nothing like in Spain or Ireland.
“And the Paris market,” Martin told us, “recovered relatively quickly. Rural France has remained flat since the downturn, but values in Paris saw reasonable growth in 2011 and 2012.
“Now, this year, we have another softening,” he continued, “and right now is a good time to be a buyer in Paris.
We’re looking to buy another apartment in this city, one to serve as our Live and Invest Overseas Euro-base. So, last week, we reconnected with real estate contacts in this part of the world.
For our last purchase in Paris, in 2004, we worked successfully with the property agency Philip Hawkes. British expats Philip and his wife Patricia have been doing business in Paris for 30 years. Last week they introduced us to their newest agent, Kim. The group of us gathered around the table in their conference room, and Kim pulled out a Paris Metro map.
“Tell me what you’re looking for,” she began.
“I want to be on Metro Line 12,” Lief explained. “That’s the line for our current apartment,” he continued, “and I’d like the office to be within easy commuting distance.
“We’re looking for 30 to 35 square meters, and we prefer a building with an elevator, especially for an apartment above the second floor. And, of course, I want to spend as little as I can while still keeping my dear wife happy,” Lief added.
“Right, those are the practical concerns,” I laughed. “However, Metro stops and elevators aren’t priorities for me. I’m looking for something old and with character. Most important for me is a certain charm element, something you can’t really describe but that you know when you see it.”
“As you’re beginning to understand,” Lief interrupted, looking in Kim’s direction, “your biggest challenge as our agent is going to be marrying our competing agendas.”
“Given what you’re telling me,” Kim replied, “about location, budget, and the priority of the charm factor, I’d suggest you look in Montmartre. That’s where I think you’re going to find what you’re looking for at the price you want to spend. Plus, it’s an easy Metro commute from your current place in the 7th.
“In addition,” Kim continued, “this is a good part of the city to be buying into right now. From an investor’s point of view, Montmartre is a solid choice. You’re taking a position in one of the most active rental markets in the city. In addition, you’re investing in an asset that I believe is going to become more valuable as the area around it continues to improve and develop.”
Indeed, this gritty quarter is attracting investor attention. The city recently invested 25 million euro in the renovation of the art-décor Luxor theater, for example, which, now reopened, is serving as a base for a transformation that is gaining momentum.
The next day Kim took us to see two apartments in Montmartre that met our criteria.
“Both these places have potential,” Lief told Kim when the three of us sat down at an outdoor table of the café on the corner following the second viewing. “But they’re pricier than I expected. On a per-square-meter basis, they’re not much cheaper than apartments I saw online this week for sale in the 6th.”
“The asking prices we’ve been quoted are very negotiable,” Kim replied. “The agent for the second apartment we just saw told me on the way out the door that his sellers are open to offers. He suggested that you could come in very low.
“I think that, for either of the places we’ve seen today,” Kim continued, “you could offer 15% to 20% off the asking price.”
Lief sat silent for a minute, doing some quick calculations in his head.
“That’d put us at less than 8,000 euro per meter for the second place,” he concluded. “That’s more in the range of what I was expecting.”
Both apartments would require some renovation work. Kim told us she has a guy, Pedro, who can do most anything we might want done. “He’s good, he’s honest, and he’s reliable,” she said. “He’s also a really nice guy. The problem is, he doesn’t speak French or English, only Spanish.”
“That’s actually better for me,” Lief replied. “French and I don’t get along very well.”
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