How secure is French leaseback? - TheMoveChannel.com

(EMAILWIRE.COM, March 31, 2009 ) French leasebacks are touted to be safe long-term investments, with limited downsides Â– TheMoveChannel.com finds out if this really is the caseÂ…

France property has traditionally been a hot favourite with second home buyers and buy-to-let investors, thanks to the countryÂ’s strong rental potential.

Today, it remains a popular property investment destination, with some developers introducing the idea of a leaseback scheme to appeal to investors looking for a long term opportunity and reliable rental returns.

In todayÂ’s shaky market, investors are keen to snap up a stable investment and leaseback could provide that for them Â– they buy the property and hand it over to the developer for a fixed term, who then rents it out on behalf of the client for an agreed return.

The downside is that, often leaseback schemes donÂ’t offer any personal usage - so if a buyer was purchasing a holiday home rather than an investment property, the idea of leaseback may not suit them.

There are some deals around that include a few weeks personal usage each year, or offer the property to the owner to use during un-let periods and they then pay a discounted rate to Â‘rentÂ’ their own property.

The leaseback schemes have really taken off in France as they have been encouraged and supported by the French Government and can also offer investors a VAT rebate as the cost of the VAT is often removed up front from the purchase price.

Leasebacks may not be so good if investors are seeking to make a large profit quickly, or are looking to flip the property in a year or two. They are best suited to those who are seeking long term gains and donÂ’t want the hassle of arranging letting, property management or maintenance themselves.

French leasebacks are the property equivalent of the good on paper guy Â– whilst they will not bring huge, spontaneous returns, they will offer a slow, safe and steady investment.

Leasebacks have a fixed term so investors will be locked into a contract Â– but these terms differ vastly in length, so make sure you know exactly what you are getting for your money before signing on the dotted line.

If the leaseback is as long as 20 years, by the end of the leaseback term, the mortgage may have been mostly paid off, thus buyers will be left with a property that they own in full. They can now choose what to do with it Â– either continue to rent it out or move in themselves.

For more information on properties in France and the market in general, please visit http://france.themovechannel.com/

-ENDS-

Notes to editors:

TheMoveChannel.com is a property website that was founded in 1999 as an online resource for buying, selling and learning about property. It now receives as many as 300,000 visits per month and advertises over 50,000 properties in nearly 90 countries, which are listed by over 500 partner organisations.

For further information as well as images and interview possibilities, please contact:

Dan Johnson
Managing Director
www.themovechannel.com
0207 952 7650

TheMoveChannel.com
Dan Johnson
020 7952 7650
dj@themovechannel.com