FRENCH PROPERTY: WOULD YOU BE INTERESTED ?

Re: Re: French property

Hi Pierre

I have seen a leaseback scheme advertised in Paris. This would seem like a great location to invest in. However someone suggested that the cost of the apartment might be much higher then similar apartments in that area ie the builder adds a premimum to the value of the house because it's a leaseback (similar to some goverment granted schemes in Ireland !). Have you any suggestion as to how to check that the price of an apartment is competitive ? Any experience of this ?

Re: Re: French property

Thanks Pierre, hopefully it will do ok, though I had to grin to myself when the French Estate agents showed me figures basing Capiltal Apprec @ 10% pa for 20 consecutive years. Optimistic thinkers or what ?

Bill,

I bought in a complex in Antibes which is now sold out. The main factors for me were close to tourist area, close to large business area, 10 minutes to airport, close to motorway, good return.

Some advice I received off Glenn Borthwick from www.frenchbuy2let.com was not to buy in a holiday type complex as they can be harder to sell later on. Glenn's site has a good forum on q and a's.

ssnrcs,

Coming from Ireland I asked this question myself, and was told the prices generally are similiar to other new house builds. I think you would need to talk to a local estate agent and compare price per sq metre.

Novice

French Property

Novice Investor, can you elaborate on your views on the items you mentioned below, Pierre has given his but i'd like to get your feedback as well, Thanks, Bill..
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Some that I have heard through research:

- Apartments are smaller
- Apartments are not well built
- Hard to sell after the Lease finishes
- Can be difficult gettting out of the lease after it finishes
- French don't invest in them at all

I have my own views on the above which I will update later, but would welcome getting a proper discussion going on this. Anybody else with any positives / negatives
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Re: French Property

- Apartments are smaller.

Yes but they are for short stay, no need for large area's. This is what the demand is for.

- Apartments are not well built

I doubted this until I read Pierre's response, as the impression I got was that France is a very regulated country with some very smart laws, I thought this extend to the building trade also. Pierre is this widespread and if so what do people have to watch out for.

- Hard to sell after the Lease finishes

Location, Location, Location. If the location is right than this should not be an issue, beware of buying leasebacks in remote places. If the yield is good there is usually an investor willing to buy.

- Can be difficult gettting out of the lease after it finishes

6 months and 1 day from the end of the lease, write to the company expressing your wish to end the lease. You can then negotiate a better rate and more personal use if you wish / or sell it.

- French don't invest in them at all

Again what I have heard is that French Bussineses, ie Banks etc do invest in them. Don't know how accurate this is. Pierre any views on this.

Re: Re: French property

Hi ssnrcs,
Could you please tell me in which part of Paris you are going to buy your apartment ? It will help me to give you further information.Thanks

Pierre

Re: Re: French property

Hi Novice Investor,
You've selected a very nice place to invest in. Prices in the South of France are flying so quickly that I won't be surprised you could sell your apartment after the lease at a very good price.
I know someone who has bought a villa in Aix-en-Provence (near Marseille) 4 years ago at 150.000 EUR ..... he sold it 1 month ago for 300.000 EUR....

You'v made a very good deal, congratulations !

Pierre

Re: Re: French property

Hi Pierre

Here is a link to the description of the leaseback in Paris ....although my question was more generic. I guess I wanted to know if the your experience was that the prices were higher then they should be

[broken link removed]

Antibes

Hi Bill,

Antibes.....10 minutes to airport.

Click to expand...

Antibes is nowhere near 10 minutes to the airport!
The nearest airport is Nice and its at least 30 mins away on a good day. In high summer it could be 45mins to 1 hour.

Still, its a great place, but the exact location in Antibes is crucial. I would avoid the developments on the inland side of the A8. The Vielle Ville is the place to be.

Re: Antibes

Joe,

Appreciate your views, could you expand a little please.

Why would you avoid properties on inland side of the A8, especially from an investment standpoint.

The old town is lovely but I don't think you will get a leaseback development in there.

I am only back, and drove on the motorway to outskirts of Antibes in 10 - 15 minutes approx, with a further 10 into the Old town.

Novice

Antibes

There were a couple of lease back deals in the old town (just outside the walls) but they've all been sold. Property is at a premium in the old town as thats where the holiday makers want to be. Why buy an appartment on the 'wrong side of the tracks'?

In my view the biggest selling point about Antibes old town is that you have a real, quaint, beautiful little French town, with everything in walking distance and no need for hiring a car. Indeed having a car in Antibes is a positive disadvantage...parking is hard to find or expensive. There is great public transport anyway.

You might get renters who don't know the ropes, but once people cop on where the action is they won't be back.

Of course a leaseback is a different kettle of fish because they have to (usually) guarentee rental income of some value...but it always comes down to the same old rules in the end...Location, Location, Location.

mortage

how do you get a mortage for 150k in France? (assuming you needed one)

Do most people just remortage their houses in ireland? (this is the most unattractive part) or Did you managed to get a french bank to give you a loan?

Leaseback checklist

Below is a list of things to check before purchasing a leaseback property in France, all of these items come from other posts and a few websites i've been reading up on. Feel free to comment on or correct me on anything listed here and please add anyhting i've forgotten..

1. Select a couple of areas you like. Pick the most likely development based on Location, Services, Developments in the area, Airport, Motorway, Train/Bus services. etc..
2. Look for a reputable full service agent/estate agent
3. Visit your proposed apartment/site, check sizing, get a feel for the people you are dealing with.
4. Check out the size and standard of other apartments in the area and if possible by the same builder.
5. Check out the management company, make sure it’s registered, get a list of properties it manages and have a look if possible at one of these developments for upkeep standards etc..
6. Basic Management company information is on www.societe.com.
7. Buy in a development that is only partially leaseback
8. Buy a property that will be in demand all year around, not just in holiday season.
9. Check non leaseback property prices in the area and compare.
10. Don’t buy in holiday complex developments as they are hard to sell on.
11. Check out the option at the end of the lease and how easy it will be to sell on.
12. Organise 30% downpayment and 5-6% fees.
13. Accountants fees for the first 3 years paid upfront.
14. Commissions for estate agents are paid upfront.
15. Investigate French mortgages. Loans fixed at 4.45% for 15 years are available from Entennial bank, variable rates at 3.65% with 2% cap.
16. French lenders charge up to 1% in admin costs.
17. Read the Contract thouroughly, small print, clauses, back out levies, personal use options etc..
18. CGT reduces every year to zero after 15 years.
19. Rent should be between 4-6% Guaranteed, net of french income tax and TVA, and index linked.
20. You should be able to write off 1 visit each year against tax to check on property.
21. All paperwork is in french.
22. You can rent out extra time you wish to occupy the property back from your head tenanr or allow others to occupy the property in your place.
23. You can waive your period of occupation in which case your head tenant should pay you extra rent.
24. Your property should be returned to you in good condition when the lease expires.
25. You are responsible for TAXE FONCIERE (approx €300) per year.
26. If you terminate the lease before 9 years you must repay the TVA on a pro-rata basis.

Re: French property

May I add just one thing: your actual debts must not exceed 30-40% of your total wages in order to apply succesfully for a mortgage (should be the same in Ireland).

Pierre

French Property

Novice Investor,

How does the buying process work. For new developments that won't be ready for a year or so do you pay a 5-10% deposit upfront and then stage payments until complete or do the french do thing differently.

Pierre,

What is your opinion on Lille, i'm looking at an apartment in the centre of the city, would it be a good long term investment..??

re: 20-year fixed term rate

"You can currently get fixed mortgages for 4.7% for 20 years, which is great compared to here."

I would honestly have thought you could get a better rate than 4.7% for 20 years - at the moment the 5-year nominal rate quoted here is around 4%.

Re: French Property

Hi Bill,
May I ask you why you've decided to choose Lille as an investment ? Did you find a good leaseback scheme in the city ?
Any other information you could provide to me ?
Thanks

Pierre

French Property

Pierre,

I'm looking at a new leaseback development due in the middle of next year, in the heart of Lille over the TGV Metropole with prices for 2 bedroom apartments around 27m2 of €80-90,000. Do you know of this development and can i get your general opinion of Lille and of the city as an investment opportunity.
Thanks, Bill..

Re: French Property

Dear Readers and Investors,
I am glad to announce you that you can contact me directly to the following e-mail address from now on, in order to get further information about Leaseback programs: email address deleted in line with our no-advertising policy

I've started selling properties, I will be pleased to help you out going through the buying process.

I've selected the best leaseback properties available on the market. What's more you will get the advise of a French national who's got an in-depth knowledge of Property Investment and Mortgages.

I look forward to talking to you soon.

A bientot !
Pierre

Re: French Property

Au lieu de passer par une agence immobiliere, pourquoi ne pas visiter et acheter une propriete directement? Je pense que c'est beaucoup plus gratifiant.
Si vous arrivez a lire ce message je suis sur que vous n'aurez aucune difficulte.

French property

Bonfour Su.
Je peux lire et comprendre votre message, neanmoins je ne peux pas imaginer comment je pourrais acheter un appartement en France sans l'aide de un agent.Est ce que vous povex explique un peu.?
Merci.