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French Leaseback Properties
Lease back often referred to as leaseback proprties
are a safe way to invest in property abroad. With a minimum of risk,
guaranteed rental income and no property management headaches, where
else can you find a good investment opportunity that even lets you use
the property so many weeks each year?. With prices of leaseback properties
starting from around £39,000 and mortgage funding available for up to
80% of the purchase price, this can prove to be an ideal alternative
from the UK buy to let scene.
What is a leaseback property?
Leaseback property has been around for two decades in
France, and was introduced by the French government to increase the
quantity of quality holiday accommodation available in areas capable
of attracting more tourists.
With the downturn in pensions and other more traditional
methods of investing, more and more people are turning to bricks and
mortar, and leaseback schemes have helped take the hassle out of owning
buy to let property.
The leaseback scheme enables you to purchase freehold
a property which you then earn a guaranteed rental income from. When
leaseback schemes are sold, there is a pre-selectionned property management
company to whom you "leaseback" your property for a period which usually
ranges between 9 and 11 years.
During the period you leaseback your property to the property
management company, you have the peace of mind of owning property and
benefiting from a guaranteed income, yet none of the hassle related
to letting out and maintaining the property! This is one of the reasons
why the leaseback scheme is so popular and that there is not enough
supply to meet demand.
See
our list of Leaseback Properties for sale in France
 You can usually use your property for a certain number
of weeks per year for holidays although this differs from scheme to
scheme.
The guaranteed rental income tends to range between 2.5%
and 6% per annum depending on the property, whether you will be taking
your holidays in it and where it is located. Different property management
firms offer different rental incomes, but in general the less you use
your property the higher your yield will be. This is normal when you
think about it, as the property management firm cannot guarantee to
pay you rental income if you are always in your property!
What's more, the French government agrees to offset the
payable VAT (TVA) on the purchase price against that charged to the
short let customers of the rental management company. This means that
you will receive back a sum equivalent to the VAT on the property at
the rate of 19.6 % on new build property. This normally takes some months
to come through, but some developers will advance the VAT for the government
and reclaim it back directly.
See our FAQ's
on Leaseback Property in France
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