English
FrançaisHello forgive me for huge subject heading (I'm a newbie)! I'm thinking of purchasing an apartment on the leaseback scheme and some of the contract details have been released as follows:
The rent will represent fifty percent (50%) of the pre-tax rental income (rent collected) received by the MANAGEMENT COMPANYOPERATING COMPANY during the past year, calculated starting from the date the lease takes effect, for all of Building A used as a Tourist Residence,
And divided among all of the owners of the Tourist Residence proportionally on a pro-rated basis according to the proportion of the common areas held for each lot.
This rent will be due within three months of the end of the MANAGEMENT COMPANYOPERATING COMPANY’s fiscal year, in one lump sum at the end of the rental period.
Base rent:
In any case, regardless of the amount of rental income received by the MANAGEMENT COMPANYOPERATING COMPANY, the annual rent paid cannot be less than two percent (2%) of the pre-tax sale price of the rented property, revised annually to reflect the variations in the national index on the cost of construction published quarterly by INSEE.
EXCEPTIONALLY for the 1st year:
The fixed annual rent will be paid quarterly and in advance, and will be a set amount of ++++ € (excluding tax)/year. )
The amount of annual rent that you will exceptionally receive in the first year will be based on mortgage payments, property management charges, taxe foncière and life insurance and so will approximately represent a rental return of 6-7%.
~ I have done some research but have never come across anything other than the usual 3-5% return. What are you thoughts/experiences on this type of contract?
Thanking you in advance.
DayRy