It is one of Paris’s most exclusive addresses. The Eiffel Tower stands tall above the UNESCO cultural heritage-protected rooftops. The small winding streets take you past traditional Parisian bistros and tiny family-owned boutiques that have been passed down through the generations. This is the 7th arrondissement (neighbourhood), the beating heart of Paris’s historic left bank and a stone throw from both the River Seine and Napoleon Bonaparte’s burial ground Les Invalides.
This is where Dorothea Hirsch calls home.
“I’ve lived here ever since I came to Paris 60 years ago. In the very same apartment,” the soon-to-be 85-year-old says proudly as she proposes a tour of her 64-square-metre apartment. The space is sparsely but tastefully furnished, and the light floods in through the large windows facing the street. A signed black and white photograph that appears to tell the story of a long and strong friendship is centrally placed on an easel.
The struggle of stretching a pension
Hirsch clearly loves her apartment. Yet, last year she sold it at more than 30 percent below the market price as a viager, pocketing €540,000 instead of the €800,000 she could have made in an ordinary real estate transaction.
Hirsch’s reasoning was simple: She wanted to live life to the full, while she still could.
“There are many things I still want to do,” the former physiotherapist says, explaining that after being self-employed for most of her life, she only had a very tiny pension to live on, coming to a total of around €1,000 a month.
In one of the world’s most expensive cities, the pension barely covered her living costs.
To pad out her income, and “live more comfortably” as she says, Hirsch continued to teach yoga on an almost daily basis. But despite that, she often felt the need to dip into her savings.
It came to a point that Hirsch even started making calculations on how long she could afford to live.
“Every time I looked at my savings they got smaller and smaller,” she recalls.
That’s when a thought started to process in her head. What if she could make things easy for herself? What if she could travel, and not have to count her pennies anymore – without having to give up the home that had been such a pillar in creating her life and memories in Paris?
“I thought about it for about two years,” she recalls.
Finally, she decided to take the leap, trading in what had become a goldmine of apartment, for a viager.
“I realised I had nothing to lose. I have no children, so why sit on all this capital without being able to use it before I go?” she asks.
She contacted an agency in her neighbourhood, and within just a few short months, her apartment had been snapped up by an investor in Alsace.
In exchange for the market bargain, Hirsch now gets a monthly payout (known as rente in French) of around €4,000 that will last for the rest of her life. But most importantly, she is allowed to stay in her home until the day she dies.
Jeanne Calment and the never-ending viager
The word viager, which roughly translates into “life span” in French, has strong connotations in France. This is in large part thanks to the 1972 comedy “Le Viager”, in which a doctor sees a golden opportunity after examining a patient he deems to be on his death bed. The patient, Louis Martinet, owns a beautiful country house in Saint-Tropez, and the doctor colludes with his brother to buy it, thinking they will make a quick buck. Only, Martinet does not die, and the rente soon becomes a heavy burden for the buyer and his family. Eventually, they try to kill Martinet, but without success and the film ends with Martinet outliving them all.
There is also the real-life story of Jeanne Calment. Internationally, she is known as the oldest woman to have ever lived, reaching the incredible age of 122, despite picking up smoking at 112. But in France, Calment is better known for selling her home in southern city of Arles as a viager to her much younger solicitor. The solicitor also ended up dying before he could reap the benefits of his investment, having paid Calment’s rente for a record 30 years.
Although there are theories suggesting Calment’s daughter Yvonne faked her own 1936 death and usurped her mother’s identity to profit from the monthly payments, those allegations have never been confirmed.
‘You have to play to win’
Pierre* is a Paris-based real estate investor who has built a fortune buying viagers.
He made his first transaction around 15 years ago, and struck gold right away.
“I got the call within a month,” he says, recounting how, shortly after signing the deal, he was notified of his tenant’s unexpectedly fast passing.
Since then, Pierre has bought around a dozen properties this way, mainly in the French capital.
Some of his investments have, like in the example above, been real jackpots. Others, less so. In one case, he recounts, the seller used the upfront bulk sum (known as bouquet) to rebuild the apartment, adapting its interiors to fit his special needs. Pierre discovered the changes once he acquired the keys.
“It was a bit of a surprise. There was a handicap bathtub and ramps and so on. So I had to redo it all, restoring it to normal standards again.”
Pierre shrugs. “It’s a lottery. With a viager, you just never know what you’re going to get.”
Pierre is aware that some people might call him a vulture, accusing him of preying on the old and vulnerable for profits, but he does not see it that way. For him, it is an impersonal financial placement where he is simultaneously offering the seller a peace of mind by helping them secure their future.
“Some people get jealous when you tell them that ‘I got one and it lasted only six months’. But you know, these are the same type of people who want to win the lottery but without playing it. You have to play to win,” he says.
Roselyne and her husband were in their early 50s when they were offered the opportunity to buy a seaside villa in Saint-Raphaël, on the Mediterranean coastline, as a viager in the late 1990s.
The couple were in the midst of constructing their current home in the Haute-Loire and did not have the financial means to invest in both at the time, but regardless, they disliked the idea of “betting on death”, as she describes it, and they decided to decline.
“We would have made a truly excellent deal had we gone for it,” she says. “It was a beautiful villa and I think it only lasted as a viager for three years or something like that. But morally we just couldn’t do it. In the end, it all comes down to waiting for the person living there to die as soon as possible,” she says.
The annual Christmas card
Bertrand Fournis works as an estate agent at Légasse Viager – the very same agency that Hirsch contracted when she put her home up for sale a year ago.
In his five years in the business, which accounts for about 1 percent of France’s annual real estate sales, he has overseen several dozens of viager deals – from tiny studios to elaborate mansions, where rents can range from as low as €700 per month to a staggering €10,000 per month.
“Some properties are worth millions,” he says.
Fournis describes the typical seller as a childless, single man or woman over the age of 70 “who sits on a beautiful Parisian apartment, but who in reality have very little to live on”.
“They might have distant relatives living elsewhere but with whom – aside from the annual Christmas or birthday card – there isn’t much contact.”
The sellers, he says, are often wealthy investors who are more interested in the state and geographical location of the property they will eventually get the keys to, rather than the life expectancy of the seller.
“But they’re not allowed to know each other beforehand anyway,” he says, explaining the golden rule of the viager system: Nothing must be known of the seller’s physical health prior to signing.
“All they know about the seller’s is the person’s name and date of birth.”
Self-presumed heirs
Fournis says that the few problems he has ever encountered while being in the business, has not had anything to do with neither the sellers nor the buyers – but with the seller’s self-presumed heirs.
“It’s rare, but it happens. Like a nephew or a niece, or a second cousin, who thought they were going to inherit and discover that they aren’t. Some even go as far as to get a lawyer to ensure there hasn’t been some sort of abuse of weakness.”
But, he says, when that happens, “they were never very close with the person anyway”.
Fournis often forges close relationships with his elderly sellers. “They have often lived extraordinary lives,” he says, adding almost always express huge relief once the deal is closed.
“They jump when they walk out of the solicitor’s office. They’re all happy and say ‘why didn’t I do this earlier?’” he says.
Hirsch is one of them.
She still teaches yoga – the mats from the class this morning are still rolled out in the far end of the living-room – but she no longer has to.
Although she is well aware that that means her home does not technically belong to her anymore, she does not mind.
“I’ve always dreamed of having a small country house somewhere in the south. That’s finally about to happen now, I’m getting a little wooden cottage in Corsica.”
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