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French LeasebackThe French property leaseback scheme is an initiative launched by the French government, launched in the 1970s, to attract investment in tourist areas to boost the French economy…and it has worked! So well that the original leaseback concept has spread to other countries.The principle of the leaseback system is in the sales of French property classed as "leaseback" on a sale and leaseback agreement, mainly to investors both French and other countries such as the UK and Ireland. The investor buys the freehold property but as part of the deal leases the property back to a management company for a set period of time - normally 8 to 11 years initially with an annual agreed rental return. During this period the tourist management company rents the property out to holidaymakers - this is generally their specialty as they can guarantee occupation for much of the year. In return, the investor-owner receives a share of the rental income. This is a guaranteed income that is geared to a specific rental yield percentage on the property, and is index linked. But what makes the French leaseback scheme a safe investment? The answer is down to the French government. The sale and leaseback scheme is strongly supported by France's government. It has to be as it was their brainchild! Of course, as with every offers of investment that are considered 'safe', the returns are not tremendous. Typical rental yields range between 2% and 5%, the higher figure being awarded to the investor-owner if no personal use of the leaseback property is required - i.e. the leaseback property is purchased as a 'financial only' property. These rental returns are certainly not going to set the world alight. They do however provide you with a solid investment from which you can count on a level of income that is guaranteed. Where to buy your French leaseback property?As mentioned already, top locations in which to buy sale and leaseback property in France is in the popular tourist areas. There are many splendid locations to choose from! The French Alps offer innumerable opportunities to buy French property in world class ski resorts on a leaseback basis. Ski stations like Val d'Isere in the Savoie region of France are popular, as are ski resorts in the Three Valleys area (Trois Vallees), which encompass the likes of Meribel, les Menuries, Courchevel and Val Thorens.Coastal holiday destinations in France are hot investment locations too. In the South of France along the French Riviera there are some excellent opportunities to buy French property under the government-supported leaseback scheme. Property prices are generally highest along the stretch from St Tropez to Monaco. It's no coincidence that this stretch is also the warmest and sunniest area of France! ApartmentsWhat type of properties can you leaseback on these developments / estate? The most popular are ski chalets, studios and apartments. Villas are available on some developments but obviously more expensive! Have a look at our property details.Financial & Legal ConsiderationsIn France the legal transaction is handled by a notaire (equivalent to a lawyer). The contract is quite extensive and needs to be considered in consultation with a legal representative to avoid problems. If you need finance, then a Euro mortgage is the normal route. Euro mortgage rates are still low. If you need a mortgage broker - please contact us. Some leasebacks can be included in SIPPs.PropertyMagnate has a full range of partners to offer advice and help when
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