French leaseback doubts

B

berph

Guest
Hi all
Can anyone tell me:
1- Why are French leasebacks not being bought by French people themselves. I have seen no advertising or marketing of them in the French press.
2- Will there be a market for resales after the management contract expires (9 and/or 11 years)?
Cheers
B.
 
I believe the French buy into schemes under a law called 'de Robien' and hence do not buy into leasebacks as they are not as tax efficient.

Check out other developments in the area you are thinking of buying to check that your not paying over the odds for a leaseback. I would say expect 5% growth p.a but after 20 years expect that the selling price is approx 20% less than what you would be paying for a non-leaseback.

Still at that though could be a good investment.

Remember also the scheme will not last forever and noone knows when the French Govt will pull the plug.

My gut on having reasearched these a hell of a lot without buying is:

I would say they are a good investment vehicle provided you think long term, go for a good location, a very reputable developer and a strong management company of long duration.

I would think Cote D'Azur, Languedoc espcially around Montpelier and Perpignan and Carcassone would be good areas. Go paris if you want a tiny pad.

Thousands of Irish people have bought these over the last 3 years or so and continue to do so. There is a huge amount that come to market here and a huge amount which are turned down here by those promoting them here.

I go hot and cold on them all the time and perhaps the fact I have not bought one yet leads me to think 'when in doubt do naught'.

Hope this helps.
 
If you browse/search, you will find plenty more discussion on French leaseback schemes.
 
Cheers,

Has anyone - having bought one say 2/3 years ago - had to sell? and what were the hassles?
 
berph said:
Hi all
Can anyone tell me:
1- Why are French leasebacks not being bought by French people themselves. I have seen no advertising or marketing of them in the French press.
2- Will there be a market for resales after the management contract expires (9 and/or 11 years)?
Cheers
B.
Click to expand...

As far as i can see leaseback schemes were a government incentive for foreign investment.
 
Whilst Leasebacks seem like a good idea,They are only as good as the management company.If the management company is poor,then expect problems with them honouring lease payments.This is from experience,so do your research.Also expect no help from agents after purchase.
 
irishgolfer said:
Whilst Leasebacks seem like a good idea,They are only as good as the management company.If the management company is poor,then expect problems with them honouring lease payments.This is from experience,so do your research.Also expect no help from agents after purchase.
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good call golfer
 
Probably a really good idea to go with the best for a leaseback purchase and the very best are surely Pierre and Vacances. If I buy I think it will be through them as long established and experts in the field of letting and management. Probably paying a premium over other leasebacks if you buy through them.
If someone knows who comes next in the ranking do inform me ? Odaly's perhaps ?
 
a friend bought a leaseback about 30 mins from Nice about a year ago. They had a bad year with tourism and so the people who have the lease are passing it on and the new leasee's have decided to pay the owners less each month reducing the return from 5.5 to 3.5%. They are fairly sure that they can not do this but have a long battle ahead. Not as hassle free as they hoped !
 
Thanks for that ontour.

Interesting to see that the management company can sell on the lease to another management company who in turn can offer the original purchasers a lower guaranteed return. Can you name the management company who sold on the lease ? This is worrying if the management company can do this after just 1 year. This is also something that I had'nt thought of. Hence my reasoning use the best such as P & V and you'll get the best service and the property will be maintained in A1 condition.
 
That can happen in leasebacks ontour,and I know another example first hand.Because of site restrictions,I wont name the companies involved,however I will say that the original company own the lease,therefore your payment is due from them.Anyone buying a leaseback,should try and find other investors names in the same development,so that they can act together if there is any problem with management company.Safety in numbers!!
 
Check out the calculator on frenchentree.com

It gives up-to-date values per square metre of every area of France.

Sobering reading for anyone who has invested in over-valued leasebacks?
 
my tuppence halpenny on French Leasebacks:
why be committed to invest for so long...things change!
watch the Mgt. co dont have renewal rights after 9 years
 
Berph

That site you mention - can you give me directions to where to find the information you state as the site looks a minefield.
 
Daddy said:
Berph

That site you mention - can you give me directions to where to find the information you state as the site looks a minefield.
Click to expand...
The calculator is here, although I don't find it accurate.

The location can only be chosen by region or town. My town, for example, is not listed and if I choose the region, it does not take into account the location of my property by the sea, but gives a general value for the Languedoc/Rousillon region.
 
Hi DelGirl,
I am thinking about buying in the languedoc region sometime early next year. I'm planning to go over there in a few weeks time primarily to get to know the region - what areas to focus on and where to avoid, local prices, etc.. Do you have any tips for me ? I'd really appreciate any advice you can give, as someone who has already purchased in the region !

Regarding the calculator, I was in the Poitou-Charentes region this summer and checked out local property prices with the local estate agents while I was there. The prices I saw at that time (for properties in mostly coastal areas) were well above the average figure given by the calculator for the region....
 
We have bought in the Languedoc, we did as very light leaseback so we did not pay the VAT but only give it to the rental agency for 4 weeks of the year(August) and can use it ourseves for the rest, what we do is fit in 3-4 trips for ourselves and then advertise it privately to rent and we have had full occupancy for 6 months so doing very well out of it!. Just of of interest the complex we bought as part of are mostly Frency split between leaseback & non-leaseback then a scattering of Dutch German Italian and Belgian with about 10-15% of owners being English speaking which suits us perfectly! According to the many French friends we have made the places tipped to buy in are in or round Carcassone and Nimes which have seen prices rise with the increase in Ryanair flights from Ireland and UK and also the historical interest books like the Holy Grail and Labyrinth have generated in the area.
Best thing we ever did but be warned dont rush French Builders or Estate agents and be prepared for lots of red-tape!!!
 
johnnycash said:
I am thinking about buying in the languedoc region sometime early next year. I'm planning to go over there in a few weeks time primarily to get to know the region - what areas to focus on and where to avoid, local prices, etc.. Do you have any tips for me ? I'd really appreciate any advice you can give, as someone who has already purchased in the region!
Click to expand...
I've only just bought myself, so am not really qualified to give a lot of advice. :)

The best tip we got from a friend was that the agent's will generally inflate their prices by about 10% and to haggle hard to bring it down by about the same amount.

Do your homework before you go - research the area and, if your French is not fluent, have an English-speaking surveyor and Notaire lined up.

There's some discussion on this area in this thread.

Good luck with your plans!
 
Hi folks,
Thanks for the replies. Some interesting points there. Interesting that neither of you purchased a (100%) leaseback property. Colby, are there many advantages to the lite leaseback option ? I presume the big advantage is the flexibility, in terms of personal usage.
For me leaseback is an attractive option purely for the safety of a guaranteed yield, but I am increasingly thinking now of going the riskier (?) route to purchase locally myself and use a property management company to take care of the rental. I'm conscious of the opinion out there re. inflated prices of leaseback properties, so fear this may not be the best option in terms of investment.
Cheers.
JC.
 
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