In what business? The business of selling property to punters?Perplexed said:a friend in the business recommends Perpignan (spelling ?)
Hi MarkR could you please let me know what the drawbacks are?MarkR said:just saw your thread on french leasebacks.
i'm just after moving from the industry.
i wouldn't touch them.
too many issues.
you want to ask all the questions, and get replies in writing.
it's basically a con. put your money into rabodirect. not joking, it's a better investment!
Can you tell us why its a con.....what issues are you referring to?MarkR said:just saw your thread on french leasebacks.
i'm just after moving from the industry.
i wouldn't touch them.
too many issues.
you want to ask all the questions, and get replies in writing.
it's basically a con. put your money into rabodirect. not joking, it's a better investment!
heracles said:Can you tell us why its a con.....what issues are you referring to?
bacchus said:- 20% over-priced (easy to understand why- you get 19.6% after 15 years onwership)
- over supplied
- advertised return based on unrealistist rental prices.
- high unoccupancy rate due to high rent.
- while the tax insentive associated to these leasebacks "could" make sense for French resident, it does not for none French resident 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!!
Stay clear....
I would have thought that the key point was the fact that most of these offers have the leaseback guaranteed rental income built into the initial purchase price - i.e. you will generally pay a premium for such a property over and above a similar property on the open market with no rental guarantees.Del3D said:With Leaseback you are guaranteed a %net return over 9-11 years.
There may be no necessity but that doesn't mean that they won't do it! Aren't the prices of tax incentive properties here in Ireland (e.g. S.23 or whatever) often inflated over and above the price of similar non tax incentive properties to take account of the tax breaks? Why would something similar not happen in other jurisdictions especially if the developer could get away with it?Meccano said:The guarentee is not underwritten by money coming out of the developers own pocket (i.e. the profit on his sales) but rather from the government, by way of a refund on the 19.6% VAT which is levied on the building costs. So there is no necessity for the developer to have to add a premium to the price to cover the rental guarentee.
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