Has Anyone Ever Sold a French Leaseback?

  • Thread starter OverseasCafe
  • Start date
Hi

There is a lot of misinformation here. I have a leaseback and I do know the facts. Here are the facts, you can challenge them if you like but facts are facts.

1.Leasebacks are difficult to sell. Why? You enter into a bail commercial (commercial lease) for a minimum of nine years. If you want to sell within the 9 years you must be able to find a buyer who wants to buy it with the lease intact. In addition, there are virtually no estate agents out there selling resales. Estate agents prefer to sell them as new and operate closely with the developers.

2. The leaseholder is automatically entitled by French law to renew the lease for another 9 years after the first term is up. If you refuse you will have to pay the tenant compnsation and pay back pro-rata the 19.6% VAT. The combination of compensation and VAT make it prohibitively expensive for you to sell, assuming you could find a buyer and seller. The leasback companies know all of this and know they have you over a barrell.

There is much more to be said here but I don't have the time to type it. A word of warning, leasebacks are in a bad state in France now. Rents (including mine) are not being paid. Stay clear of them. If you want to know to facts go to the website

www.frenchleaseback.net

On this site there are forums where leaseback owners are telling their own honest tales of woe. These are real people who have been badly stung. Read it before you buy.
 
I came across a company called Bids in France at a property fair a few years back. They are a couple of Irish sisters (O'Reillys) living in the Perpignan region and selling properties (but not leasebacks) in that area. I thought they were very clued in, and even though I didn't end up buying from them I thought they knew their business. This SBP article from February 2007 shows that they were extremely perceptive. [broken link removed]#
PS I have no connection to Bids in France
 
Most leasebacks have some sort of quota for local (French) people. I am not sure if this is part of regulation but locals do invest for pension or long term gains. When I was buying my first lease back, I was given the layout plan, which had two buildings A & B. When I expressed my choice to buy something in building A, I was told that this is reserved for local residents. There is no doubt that English and Irish are more inclined to buy real estate compared to main land Europeans and leaseback and Vat refund work like a dangling carrot. Recently I heard that the French govt has changed the law around VAT refund clawback. If you sell your property in short term, there is no VAT clawback.
In the current market scenario it is difficult to find a buyer but I have heard that PARIS is still in demand and less likely to suffer rent defaults.
Anyway guys, these are tough times, hang in there for long term prospects
 
Ksingh said:
Most leasebacks have some sort of quota for local (French) people. I am not sure if this is part of regulation but locals do invest for pension or long term gains. When I was buying my first lease back, I was given the layout plan, which had two buildings A & B. When I expressed my choice to buy something in building A, I was told that this is reserved for local residents. There is no doubt that English and Irish are more inclined to buy real estate compared to main land Europeans and leaseback and Vat refund work like a dangling carrot. Recently I heard that the French govt has changed the law around VAT refund clawback. If you sell your property in short term, there is no VAT clawback.
In the current market scenario it is difficult to find a buyer but I have heard that PARIS is still in demand and less likely to suffer rent defaults.
Anyway guys, these are tough times, hang in there for long term prospects
Click to expand...

I wish people would stop touting this as "property investment"

These French leasebacks are not property - they are corporate bonds, nothing more.
 
If anyone is still reading this thread I am pleased to report that we at P&V sell €50-60 million in leaseback re-sales every year and if you would like to verify that please check our published annual accounts (as we are a stock market listed public company) where this is illustrated. We have 7 million tourist clients staying at our properties annually and this is our captive audience of second time buyers (while the rest are sold through our 120 strong direct sales team). These buyers tend to be much more lifestyle investors than the original investors though obviously the location like with any property investment is key - so this does suggest clients should no tbe seduced by promises of high rental returns from properties in areas they have never heard of. I hope this helps.
 
Hi P&V, I thought this thread had bitten the dust.

I have actually spoken to plenty of agents who have told me that they have sold leaseback resales but when it came to actually putting me in touch with one of them they've all drawn a blank. I had to presume this was either because they didn't have any or the ones they had didn't have a very good experience.

I guess I'd have to offer you the same challenge. Seeing as your company has €50-€60m in resale sales per annum and is a well known leaseback brand in Ireland I would presume that this figure represents a substantial amount of Irish clients who have, for one reason or another, sold a leaseback property.

If this is the case I'd love to speak with some of these clients to get some feedback on what the process was like, how much they made out of the transaction, why they decided to sell, etc.

The website is hoping to do an editorial piece on the subject as I feel it is one in which many clients, both contemplating and having completed a leaseback transaction, would be very interested.
 
ArthurDaley said:
There is much more to be said here but I don't have the time to type it. A word of warning, leasebacks are in a bad state in France now. Rents (including mine) are not being paid. Stay clear of them.
Click to expand...
I agree. I bought a lease back near Paris 7 years ago and it has been an unmitigated disaster from day one. Constant attempts to decrease rent, bills for "maintenance" and other costs which we were told we weren't responsible for, late payment of rent and now, no rent at all. Anyone buying a leaseback must have rocks in their head.
 
My son purchased in France a few years ago. He is paying the mortgage and no income coming from the purchase. He would very much like to sell his interest. Like Overseascafe's question I would like to know did anybody manage to sell their interest - at profit or loss.
 
leaseback resales

I am in a similar position with My leaseback. Browned off with poor performance of the management company when it comes to payments and now want to off load.
 
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