New in Languedoc: Beautiful house with leaseback opportunity

Looking to invest in an expanding housing market? Look no further than the new estate at Saint Benoit in the Languedoc-Roussillon region of southern France. These new houses give the perfect opportunity to enjoy a holiday and rake in profits at the same time!

A vineyard and Spa estate, Saint Benoit offers both the ancient and the contemporary in its modern styled furnished apartments, with private gardens, set within the estate’s 12th century renovated gardens. Set in the heart of all this modernity is the estate’s reception centre which incorporates:

– Restaurant/bar

– Lounges and libraries.

– Spa facilities with indoor and outdoor swimming pools, saunas and Jacuzzis.

– Kids’ area.

These delightful apartments are at €245,180 with a required deposit of 2% on agreement. At Sextant French Properties, we can offer you a top quality mortgage service whether it be an interest-only mortgage, a traditional repayment mortgage or even a hybrid mortgage should you so require.

The property will be under the watchful eye of a management specialist with rents guaranteed on a 9-year renewable commercial lease and paid on a quarterly basis. The buyer receives 19.6% VAT cash back and the property can be offered on 5 different options from a pure investment (yields can be up to 4.5% per annum) or a 6-month personal use scheme that sees nil return on the investment but you can nonetheless enjoy the property all by yourself!

There are only a few units left in the estate so hurry now and make good on a great opportunity!

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Unique new villas available in the French Riviera

Le Domaine de la Boursiere is a brand new housing development in the Cote d’Azur. It comprises a complex of sophisticated 3-4 bedroom villas with large gardens in lots of more than 1500 sqm. Each villa has the space and the option of installing its own private swimming pool in order to fully enjoy the Cote d’Azur sunshine.

The architect designed these individual homes to provide a sense of intimacy with nature through light, space, and sunshine. Furnished with all the modern conveniences, these homes tucked away in well-preserved nature have been designed to combine authenticity and quality of life.

All of the villas offer the following exterior features:

• Home security system with controlled access

• Fenced property with private gates

• Optional swimming pool and facilities

All of the villas offer the following interior features:

• Flue lining

• Textured paint

• Inside staircase with concrete with wood nosing

• 40 x 40cm tiles laid diagonally

The complex is in Bagnols-en-Forêt, a commune in the Var department in the Provence-Alpes-Côte d’Azur region in South Eastern France. Bagnols-en-Foret is a peaceful village nestled in the foothills of the Esterel Mountains; surrounded by beautiful countryside and described as a haven of greenery scattered with majestic trees. The village has a great view out over the valleys and hills to the south and west, and on the top of the hill there is an open park where you can have a fantastic, panoramic view out across the countryside. Situated between the upper Var department and the coast, Le Domaine de la Boursiere is an ideal spot for those wanting to combine the pleasures of the seaside and experience the real Provencal village with its windy little streets and ancient chapels dotted around. While the Med invites you for a swim just 20 minutes away, the nearby city of Cannes tempts you with its shops, casinos and restaurants.

Local activities include: Hiking, judo, football clubs, Tai chi, tennis, yoga. Market day is every Wednesday and Saturday morning in the town hall square.

How to get there:

• By car- Just off the D4 between Frejus and Fayence,

20 km from St.Raphael, 25 km from Draguinan

• By plane- Nice International Airport (1 hr), or Cannes (40 mins)

–both serve all major European cities

• By train- Paris, Lyon and Marseille are within easy reach

by TGV from Cannes train station

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French Leaseback properties: changes for 2010

Eligibility leases with rents that incorporate a minority variable rate.

Investments in tourist residences are based on a “triangular” theory:
DEVELOPER (D) – INVESTOR (I) – OPERATOR (O)

Put simply, “I” acquires a property from “D” and then signs a commercial lease with “O” who then pays the rent to “I”. Rent is at this point guaranteed, that is to say “fixed”. ie. A property worth €200,000 at a flat rate of 4% rent per annum will therefore be paying rent of €8,000 per annum.

In order to avoid pitfalls, some property managers felt it would be more realistic to use “sliding scales” (variable rates). This usage of variable rates would mean that, for example, managers could guarantee a flat rate of 2.5% over a 9-year period and then at the end of each year, they could pay back a percentage of the residence’s or manager’s turnover to the investors. In this case, there are elements of both “fixed” and “variable” rates.

BEFORE: This “mixed” rent incorporating the two types posed taxation problems in leasebacks located in the ZRR, Zone de Revitalisation Rurale or “countryside under re-development”. The tax would depend on each tax office’s interpretation of the make-up of fixed incomes, so the investor would lose his tax advantage.

NOW: It is no longer an issue as the line is “if the income is erring on the side of fixed rates, then there is no need for independent interpretation.” It means that the tax deduction will not be affected any more within the ZRR.

Changes to commercial lease systems for 2010.
Up until the end of 2009, in the event that the management company could not fulfil its contractual obligations, property investors were required by law to sign a commercial lease with a new management company otherwise they would lose their tax advantages such as the VAT rebate on New Build properties . Now, with the law changes made for 2010, potential investors can avoid tying themselves to a new precarious lease with another management company. Investors can avoid the commercial lease altogether and grant a management mandate to a professional manager. For example, an experienced manager specialising in hotel management or in holiday centres, or if the owners decide to run the whole operation themselves without the involvement of middle-men (although it might be very complicated to do so due to the number of owners in those types of residences who usually have 100 apartments).

There are 2 conditions to this new law:
1)    The so-called “self-management” of the residency must involve at least 50% of it.
2)    The “self-management” of the residence is possible after 1 year only if the owners could not agree on another management company. In practice, this period of 12 months isn’t ideal for residences in difficulties, “It would be necessary to allow investors, who are already without rent, to find a solution to their money woes more quickly,” according to Yannick Aure, the Head of Exhore, (Exploitation d’Hotels et de Résidences).

Yannick, himself a specialist in hotel management, has proposed a management mandate to investors who agree a re-sale price of the lease for a token sum  will receive  the commercial funds of their property in line with a judicial proxy.

At Sextant Properties, we hand-pick the French leaseback developments, making sure that the management companies are sound and will be able to fulfil the rental contracts they sign with the buyers.

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