French Leasebacks are back in the game!

A French leaseback is a furnished rental investment property such as a summer apartment or a detached house. It is a really useful way to climb up the property ladder in France with a secured rental income paying your French mortgage.

The main advantage of this specific type of investment is that you can use it for a variable period every year from 1 week to a maximum of 6 months. That is also an opportunity to avoid spending time every year to renovate your property during your vacation and really enjoy your holidays.

At a time where people have problem with their superannuation it could be a very interesting option to let yourself having a safer future income tax free that will be managed by a specialist who will optimise your rental income.

As for every property investment it is advised to take a mortgage secured to the property so that your hard earned money isn’t tied up in the property. If you choose an interest-only mortgage you will only pay the interests and earn money from your property from year one (based on €200,000 investment with a 5% return, a 70% mortgage of €140,000 a 2.70% fixed interest rate mortgage for repayment and 3.30% for Interest only mortgage and a 30% deposit).

If you prefer to choose the safer option with a repayment mortgage thus avoiding having to repay the capital at the end of the mortgage then your rental income will help you to pay back the capital with interests, you will break even after 15 years and will receive 100% of the rental income at the end of the mortgage (20 years in our simulation).

Exit strategy:
If you decide to sell your property after several years of ownership you will be most likely to make a profit on the sale as the price of the property will have increased because it is linked to the rental income which is index linked to the French inflation (about 2%/year).

Don’t forget, if the value of your property increase (as it is more than likely) you will be have to pay capital gains unless you have own the property for more than 30 years. If you want further information you should contact us at this number: 02074284910

If you decide to purchase a French leaseback investment you have 2 possibilities :

  • Buy a holiday furnished property that you can use several weeks per year and received a guaranteed income when you do not use it.
  • Buy it as an investment with the mortgage leverage effect and obtain a secured rental income in one of the most stable countries in the world: France.

For further information and a comprehensive explanation by one of our consultants, do not hesitate to call us on 020 7428 4910.

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This entry was posted on Monday, July 27th, 2015 at 5:05 pm and is filed under French leaseback, Ski leaseback . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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