FRENCH LEASEBACK PROPERTY PURCHASE :

( Or how I managed to buy a holiday home with only 20 % down, with 8 weeks occupation a year, with its mortgaging covered and no costs !! )

HOW DOES IT WORK ?

Basically you put down a deposit ( usually 20 % ) You then enter into a lease agreement to rent it out for a minimum of 9 years. During this time you are allowed up to 8 weeks a year for your own enjoyment. For the rest of the year you are guaranteed a minimum rental income. All associated costs such as maintenance charges, management etc are taken on board by the company you lease to.

WHAT IS IT ALL ABOUT ?

Lease back is a scheme to encourage people to invest in tourist property.

WHAT ARE THE PROS AND CONS ?

PROS :

1) On day one you get a reduction of nearly 20 % of the purchase price ( 19.6 % - equivalent to the French V.A.T )

2) By adjusting loan amount and duration, the financing can be structured so that the rental income pays off the mortgage, even in the first year in some cases. ( But on average there is usually a small shortfall for the first five years. ) See

3) You have a lock up and leave hassle free existence. All problems are taken care of for you. If there is a period with no tenant, your income is guaranteed. If a pipe bursts, its not your problem. When you arrive to enjoy your property it is pristine, when you leave, the cleaning is done for you.

4) After 9 years you are free to do what you want with your FREEHOLD property, a) use it, b) lease it again, c) sell it *

CONS :

1) You are obliged to remain in the lease doe a minimum of 9 years. ( Though you are not prevented from selling the property, it would just mean the purchaser will have to honour the lease. )

SUMMARY :

Basically this is a fantastic way to acquire a property that is virtually auto-financing, with no hassle, no worries and no expenses. And yet you have exclusive use for up to 8 weeks a year.

1) DID YOU KNOW YOU COULD BORROW MONEY IN FRANCE FOR LESS THAN 3.5 % ?
2) UP TO 100 % LOANS IN CERTAIN CASES ?
3) EVEN NON EU RESIDENTS ?


OBTAINING FINANCE IN FRANCE

Obtaining finance in France is not a difficult task. On average you can obtain about 70 % of the purchase price and have a fixed ( around 4.5 % ) or variable ( around 3.5 % ) loan, or a combination of the two. The difficulty is knowing which bank to use and who will structure the deal to best suit your needs. We at Coast & Country have fifteen years of experience negotiating with banks on behalf of our clients. No matter what your circumstances we will find the best mortgage for you. Need 100 % - No problem. Self employed No problem. Difficulty in declaring income No problem.

By Keith Meredith - pdg of Coast & Country   The English Estate Agents In France