Can we afford to run a gite business

The Big Calculation

OK now you know how much you can sell your existing house for, how much you need to pay for your gite complex, and how much you need per year. Can you afford to do it?

To take an example, then you can substitute your own figures:

Sale proceeds for existing house (after paying mortgage off) 600,000 euros

Cash in savings 50,000 euros

Total funds available 650,000 euros

Cost of gite complex including moving and transaction costs 500,000 euros

Assume NO GITE INCOME in first year - spend 25,000 euros

Total funds remaining 125,000 euros

Income generated from gites 20,000 euros

Bank interest on remaining ablance 3% * 125,000 = 4,000 euros

Total income available 24,000 euros per year

So in this example we might take the view that the project is worth gong ahead with. It probably would be, although changing interest rates, inflation of prices, and unexpected expenses can all dent this optimism.

Unexpected expenses can be large - a new septic tank will cost 5,000 euros, for example.

But here we started with 650,000 euros after paying off the mortgage and thought it was 'possibly-probably' worth going ahead with. That is still quite a lot of money. Can it be done with less? well clearly the less money you start with the harder it will be to succeed. There is no point at which you can say 'now, it is possible', but there are many amounts of money for which it will be very difficult. The 'renovation' option can be a cheaper approach - as I mentioned, check out the renovation site in the menu.

Now, what about the day to day practicalities of running gites...READ MORE