English
FrançaisHi guys,
I was looking into investing in a leaseback property a few years ago, but ended up having to put my money elsewhere. At the time it looked like pretty safe investment with the biggest risk being that interest rates would rise faster than the rental rates.
I've just started looking at the market again and am horrified by the stories I'm seeing on these forums.
I thought the rents were guaranteed by the french government? Maybe I'm a bit naive but how is this possible? And how do they expect people to keeping buying into the scheme if the guarantee is worth nothing?
It is only the VAT portion of the cost that is guarenteed by the French
government
Hi Mavro,
I totally understand that you think the biggest risk is that interest rates could rise faster than rental rates. However, French banks can offer you rates fixed (up to 30 years) for the entire length of your mortgage. Moreover in the last couple of weeks fixed interest rates have dramatically decrease. These fixed rates will make you investment totally safe.
Regarding the rents, the best way to have guaranteed rents is to choose a leaseback with a safe management company like Pierre et vacances, which is the European leader in Leaseback properties development and management www.pierreetvacances-immobilier.com.
If you want more information please feel free to contact me,
Mathilde
mathilde@athenamortgages.com
A Mortgages40077.3936111111Hi Folks
Once again, I have to differ with the advice given by Mathilde (as I did regarding the valuation of a leaseback in another thread). This forum has ample evidence to illustrate that no leaseback investment is 'totally safe' as claimed by Mathilde. I have heard no bad reports (yet) about Pierre et Vacances and this may suggest that investing with them is 'safer'.
I object to the continued use of the word "guaranteed" concerning leaseback rents. As it has become evident, the rents are far from guaranteed and there is no guarantor. Leaseback is simply a case of the management company renting the property from us and then sub-letting it, with our rents (theoretically) having no dependency on the success of the sub-letting.
So there is no "best way to have guaranteed rents" - what you mean, Mathilde, is "the best way of getting the contracted rent".
Mathilde,
The best way to have a "safe" investment is to get the rent you legally,and they, signed up to!
You are right in saying Pierre-vacance are probably the "safest" management company to be with,However over 12 years ago i visited 6 pierre-vacance leasebacks at Nice,Canne and St. Maxime and whilst they had the best locations,i wasn,t impressed,small,very small,poorly decorated and overpriced.In my opinion!
The French Government are largley to blame for this unregulated leaseback market.In the beginning it was the larger management companies,then they let in the inexperienced under capitalised rag bag into the industry.And with the recession a lot are going bust or trying to reduce rents to survive!
A lot of vested interest parties are still talking this leaseback market up.Can,t they read!
Agents(seamus excepted)mortgage brokers,French property sites are all at it.
I recently emailed a well known french property site,complaining about an article,from a well known french feature writer,about the mess in the leaseback market.
The editor emailed back saying "what issues are you referring too"
What a dummy!
Regards
John
Do not invest in leasebacks, I can assure you they are not worth the trouble and there is no such thing as "guaranteed rent" as I made the unfortunate experience.
you may as well purchase a traditional buy-to-let in a good location with strong demand and have it managed by a local estate agent.
The best guarantee of receiving a rental income is the desirability of the property and a strong steady demand for the location.
A commercial lease, akin to a business lease, which is very different under French law from a civil lease, and is subject to the rules of the code of commerce. The guarantee is in the strength of your contract.
Should the management company disappear (e.g. bankruptcy) and its activity not be taken over, you as owners would have legal recourse against the management company (for what it would be worth).
Banks may protect themselves through the contractual assignments of rents in the case of default.
Some companies will take out a bond or other insurance product.
I have dealings with both Lamy and Pierre Vacance. Although neither one offers any security other than the contract provided, I have no problems with either. In fact, despite my unit with Lamy does not provide for personal use, they have provided me with 50% off stays on two occasions.