Incentives Of Purchasing A Leaseback Property In France

By: Dominic Donaldson

At some point many of us have probably dreamed of having a holiday home somewhere in Europe but thought that it would never be a possibility down to prices. Well that dream may just be able to become a reality with the leaseback scheme that was started by the French government in the eighties to help boost tourism and construction industries. Here in this article we shall look at the direct benefits of a leaseback property in France.

France currently has a real lack of short to medium term accommodation and the leaseback scheme allows for investors to cover a large part of their mortgage repayments from a tax-free rental income they can receive and supplementary income during retirement years. But these are not the only incentives from purchasing leaseback property in France; investors are guaranteed a rental income in a strong European currency, with good capital growth potential. Low mortgage rates so therefore a secure property investment and a foothold onto the French property ladder.

A leaseback property is a property that can be sold at anytime although preferably it should be considered as a medium to long term investment to the investor. It will be purchased fully fitted and furnished and can be let out on a temporary basis. Leaseback properties are usually found on a complex or development that will provide hotel-like services such as laundry and cleaning facilities and breakfast service.

Any property that is sold under the leaseback property in France will be subject to all guarantees that the French government have in place for construction quality and financial guarantee for completion. The purchaser will sign the ‘leaseback agreement’ with a management company that will agree to pay a rental income that is guaranteed through the legal agreement and is decided based on a percentage of the value of the property also known as the ‘yield’. Usually these leases run from nine to eleven years and are automatically renewed for a further nine years after. This in total runs for around twenty years, which is often the length of the mortgage that has been set up to finance the purchase of the property.

After the handover of the property the company that have organised your leaseback property in France will then be managed like a hotel. Maintenance including insurance will then be covered and the whole process will be simple for the investor. As an extra incentive many management companies allow for investors to use residences that are under the same conditions elsewhere, so potentially every holiday, investors could enjoy in a different region of France.

Article Source:
http://www.goarticles.com/cgi-bin/showa.cgi?C=2525729

About the Author
Dom Donaldson is a property expert. Find out more about Leaseback Property in France and the services offered from Premier French Leaseback.
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