English
FrançaisSeamus,
There has been a lot of negative press about Leasebacks and being unable to sell them on etc. over the last while.
From reading some sites, it appears that mostly resales are picked up by the french, fairly quickly, as long as "Location, Location, Location" is well adhered to.
Can you answer some questions on leaseback resales.
Why would the French be the main source for resales. Do they have added tax breaks ? I assume there is a lot more commission to be made off new builds.
How is the purchase price handled, if inside / outside lease agreement, ie are the advertised properties exclu vat or can it vary.
Some prices are set at anywhere from 20-30 years rent returns, and the current normal yield seems to be between 3 - 4%. Is there any current formula's being used to price resales ?
I know you say that P&V and Odalys deal mostly in resales (cant find Odalys resale website, anyone help), why if it is so easy, as some sites would leave you to believe, are there not more people involved, and more on the market.
What about people who have sold a leaseback, maybe they can comment on the experience.
Bertrand/Fabien, do you have have anything to contribute on this subject.
Seamus, can I just add some thanks to you for this forum as it has really helped out over the last couple of years, gaining information to handle some of the challenges we have had with our leaseback.
Thanks
Seamus
Is it possible for someone to sell privately to someone else? In Ireland you can sell a property privately once you ensure that everything is legal and above board. When we read the advertising on leasebacks we are constantly reminded that they are freehold properties. It should be possible to sell a leasehold property at a fair price in order to eliminate greedy middle men.
Seamus
When I said privately I meant what if I know another buyer who wants to buy dierctly from me.... sell directly to the buyer, no agent or estate agent at all.
Seamus
In Ireland I use the services of a solicitor when selling privately. Could I not do the same in France? Could you not pay a bi-lingual solicitor to ensure everything is done correctly with the notaire? I wouldn't mind paying a professional fee for this, in Ireland it is 1% for this. 10% is an utter rip-off.
Seamus
If I do so I will post details. I was just tryng to explore different possibilities in relation to the original question. In many websites (not yours) resale is flagged as something quite straightforward, when in fact it is not. Based on the valuable figures you have supplied here, i.e. a factor of 6-6.5% in agents' calculations, it is more than likely you will make a big loss if you re-sell your leaseback within a significant timeframe. I accept fully that they are long-term investments but some people's new financial circumstances leave them with no choice but to sell (for example Ireland as a country is staring bankruptcy in the face). Thanks for your informed replies.
Hi Seamus.
Firstly thanks for this forum as it is very informative on the whole leaseback process.
You mentioned in an earlier post that an agent would use a factor of 6 -6.5% in determining the price of your leaseback property.Excuse my ignorance here but could you please elaborate on this for me.
Rasher.
Rasher
I have come across this before. I will try to explain (perhaps Seamus will correct me if I give misinformation)
If you have a leaseback you bouth for 100,000 with a yield of 4%.
Your annual income is 4,000.
In the difficult climate we are in agents are saying that in order to convince someone to buy this you will have to provide a potential buyer with a really good yield e.g. 5.5%.
The value of your property will be based on the rental income and the desired yield, therefore 4,000/5.5% = 72727. So your property has now lost value in the form of 27,273.
To make matters worse, if you want an agent to sell it for you, he will be looking for you to entice a buyer with an even more attractive yield (or perhaps he takes a cut as part of commission, I don't know). If you apply a 6.5% yield, your property has now devalued to 4000/5.6% = 61,538 and thus losing 38,462.
This is how I interpret it, perhaps I am wrong. I will hold my hands up if I am.
Sorry my last post should say :
If you have a leaseback you BOUGHT for 100,000 with a yield of 4%.
and.....
4000/6.5% = 61,538