Lease back, often referred to as leaseback properties are a
safe way to invest in property in France. 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 for the UK buy to let investor.
What is a leaseback property?
Leaseback property has been around for three decades in France, and
was introduced by the French government to increase the quantity of quality
of 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 a buy to let property
in France.
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 5 and 15
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 why there is not enough supply to meet current demand.
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 the
property
and where the property 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.
FAQ's on French Leasebacks
>>>
Recently Added Leaseback Properties in France
More Leaseback Properties
>>>