English
Françaisbmi_SafeAddOnload(bmi_load,"bmi_orig_img",0);//-->
Just hesitating over the numbers a bit before committing to a leaseback (Orelle) over the numbers.
This 1 bed apartment is 142871 euros (developer pays TVA direct) and rent is 4990 (0 personal usage) therefore gross yield is just under 3.5% (obviously a lot less after expenses, tax etc) I don't see how people can get anywhere near covering the mortgage payments. We can only borrow 100,000 euros but on 20yr loan the monthly will be c650 euros, so after taking tax into account I don't think rental return will even cover 50%.
I have picked up elswhere that the capital growth depend on rental growth so with increases capped to 1% pa after yrs5, overall I think my wife would be a lot better off putting money into savings, but she also needs certainty she will have a ski apartment in about 15yrs.
What do you think?
Nigel,
This looks a very poor deal.Why would you want to buy this appartment? With no personal use and subsidising the mortgage by 50% for 20 years,its crazy.
The gross yeild of 3.5% is low and these yeilds seem to be getting worse.Its pure greed on the managements part that there is no personal use.Shorly there not rented for the full 52 weeks.
On my leaseback on the Cote D,zur i had a co-op bill for over 1000 Euros this year.Take that into account and look at the yield now.
My insee is capped at 2% every 3 years and thats not going to very much for me if the capital growth was based on rental increases.
My view is that the capital growth would be based on general house prices in the location at the time of sale.Provided that you were free of the lease.Some buyers would not neccesarily be interested in renting.
So tell your wife to keep her 42871 euros in the bank and with her 6000 euros buying costs making 48871 at a rate of 6.5% amounting to 3176 euros and treat herself to a nice 2 week skiing holiday every year.
Hassle free!!!!!!!
Best regards
John
bmi_SafeAddOnload(bmi_load,"bmi_orig_img",0);//-->
Seamus
Is that price including VAT? Do you know what size it is? This information is not provided in the link.