Leaseback properties offer buyers in France a novel way of owning and managing property.
With rental yields and tenants guaranteed and most having the option of personal usage, they are both a holiday home and an investment.
Average yields are in the range of 4.9% to 5.7% net and with long term mortgages available at rates of 4.40% on an interest only basis, investments can show a positive cash flow from the start, even with today’s higher interest rates.
Leaseback contracts offer a full VAT refund, providing the property is held for a minimum period, usually 15 years. With VAT in France set at 19.6%, one of the most appealing aspects of a leaseback scheme is the ability to use this refund to fund any deposit. French leaseback can therefore be arranged as near 100% loans.
Guy Stephenson, director, frenchleasebacks.co.uk explains, “There are several styles of leaseback property such as ski chalets, holiday homes, business residences and student and medical residences. Each of these will have a different yield and offer different occupancy options.
Tim Harvey, Managing Director of offshoreonline.org comments, “Leaseback mortgages are similar to ordinary residential mortgages. Buyers have a wide range of choice from ordinary variable rate products to long term fixed rates.”