Why so Many Investors are Safe With a French Leaseback Property

Investing in homes abroad can be a great method to accumulate financial freedom.

But before deciding where to put your cash, an investment strategy should be created.

Where should you invest your money?

What risks are you willing to take?

A lot of emerging property destinations, which were attractive during the height of the global property boom, are now out of favour with most property investors, because of the high-risk, high-return, boom-bust nature of investing in these fragile places.

A lot of investors have now returned to investing in safer property markets, where the economic fundamentals remain strong and the risks are not as great.

For example France.
The global credit crunch had much less of an impact on the country’s economy, ensuring that it was the first European nation to come out of recession last year.

The buy to let market in France, particularly the French leaseback, is reportedly increasingly popular with many global investors, because of the low-risk, hands-off, nature of this long-term French property investment vehicle.

France Leaseback Properties
The French sale-and-leaseback (propriete allege) system was introduced by the government in France back in the 1980’s to increase the number of vacation properties available in the country.

The French leaseback presents people with an opportunity to buy a home and then lease it back to a management company, most of the time for a typical time period of 9 to eleven years (extendable up to 18 years) in return for a guaranteed annual rental income of 3% – 6%.

During the leaseback period, the management company is responsible for letting the property, as well as furnishing, maintenance and paying all bills. Meanwhile, homeowners get to benefit from a guaranteed rental income and potential capital appreciation during the leaseback agreement.

There is also the added benefit that most leaseback properties in France qualify for a 19.6% VAT rebate from the French government.

A Stable Investment
For those looking for a France investment property the idea of a guaranteed rental income, good predicted capital growth, VAT exemption and an established mature market, suggests little doubt that French leaseback properties look a safe bet for investors.

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