French leaseback doubts

[Colby]

We just felt in ours if the French were sure they could provide Guarantted rental on 300+ properties (it does not look like half that amount as very well laid out!) we would have no problem renting our one out as leasebacks tend to be in good areas with good rental potential, also if they are providing this guarantee for at least 9 years well then they will keep the site v well which most definitely is happening. The fact we did not pay the VAT meant we could buy a bigger house than outside the leaseback scheme.

 

[delgirl]

Thanks for the replies. Some interesting points there. Interesting that neither of you purchased a (100%) leaseback property.

Leaseback may be ideal for some, but we chose to purchase independently as we didn't like the restrictions imposed i.e. you can only use the property yourself for 2 (or a few) weeks a year. We wanted to use it a couple of times a year ourselves and to have the option to let family and friends stay there.

And, as bacchus IMHO so correctly put it:

- 20% over-priced (easy to understand why- you get 19.6% after 15 years onwership);
- over supplied;
- advertised return based on unrealistic rental prices;
- high unoccupancy rate due to high rent;
- while the tax incentive associated to these leasebacks "could" make sense for French residents, it does not for non French residents as you will ultimately end up paying 42% tax (assumption you are on 42% tax band) no matter how good the French tax benefits are.

Why do you think they are so much advertised in Ireland? b'cos they can not sell them to the French themselves!!

There's a lengthy, but very interesting, thread here you might like to read on French leaseback schemes.