Paris: Real(istic) Estate?

Posted on April 12, 2006


by the paris blog 

Everyone in the States assumes property in Paris is astronomically priced. No one there believes what a low price I paid for the apartment I bought earlier this year in Montmartre. For fun, I go to the “real estate for sale” area of NY and LA Craig’s List and punch in the price I paid for the Paris pad, to see what the same amount would buy. Nothing comes up that cheap in the first 150 listings for either, not even in the ghetto neighborhoods.

And yet some of my French friends think I will lose money on the place. They say French people cannot afford to buy property the way it is priced now, and because of this the market, now at its peak, will soon collapse. It is almost laughable to me, the idea of property prices having any relation to salaries. In theory it should, but in the US, real estate is anything but realistic. Middle-class homeowners are in hock up to their eyeballs, living beyond their means in houses that are so often supersized beyond anyone’s veritable need.

The idea is to stay in the apartment when I am in Paris and rent it out when I am not. Paris is the #1 tourist destination on earth, with some 45 million people coming to it annually. All those people need a place to stay. Why not chez moi? Of course, renting it out is trickier than I thought. My first tenants were friends from LA. They are young artists, so I cut them a discount. When they arrived, the key got stuck in the door. Long story short: I wound up paying them—reimbursing them for settling with the locksmith in cash—so my “earnings” for the first rental came to –140 Euros.

Maybe my French friends were right.