How About Having a Holiday Property in France?

If you haven’t heard about the concept of Property lease backs as an investment option, then read on to find out how this can work for you as an attractive investment cum holiday option.

Let us look at some background of this concept of property lease backs – In the 1960’s there was a boom in French tourism, and even today, France continues to be one of the popular tourist destinations in the world. The need to encourage investment in real estate was perceived and the government started to permit the construction and lease back of French properties which were conceived as tourist residences but which doubled as an investment opportunity as well.

The way that a French lease back works is like this: you buy a property; i.e. you are the new owner of that property. You then lease the property back to a management company that specializing in managing and maintaining tourist properties. The typical duration of such as lease back is 9 to 12 years.

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When you lease back the property, the VAT (which was the component of the price originally paid) is refunded to you by the investor which immediately sweetens the deal. Now since a typical investor/visitor is not going to stay in France for more than a few weeks at a time, the property that has been invested in starts to generate a yearly income; a return on your investment rather than remaining vacant for the rest of the time.

The simple formula that the lease back scheme pivots on is this – you get to stay in the property you have invested in for as long as you want. You can stay for a few weeks or a few months, as you wish. You can pick the time and the duration for which you wish to retain the property for your own use, and the rest of the time, the management company which leases it for you, will make sure that your property generates income in the form of rent.

So if you choose to stay for several months at the property, your rental income will be proportionately lower. However if in a given year you choose not to visit it at all, you may end up having a higher yearly income from the property.

Though you can pick and choose when you want to use your property at the beginning of the year, if your plans change at a later date, you can still have the option of having that time bought back by the management company, and it could still manage to generate some more income for you.

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