French leaseback properties

hargo

Hi, anyone got any experience or advice on leaseback properties in France

MrPudding

No, but I second your request for info / people's experience. I have been doing a bit of reading up about it and it looks pretty good.

MrP

Hagar

Get some good independent advice before you jump in. Preferrably from an English speaking French Lawyer who works in France rather than a French speaking Irish Lawyer who works in Ireland.

Don't swallow any of the spiel from the selling estate agents. They are not unlike their Irish counterparts.

Expect to pay approx 15% of the purchase price in fees to estate agents, notaires, stamp duties etc. Get an extensive survey done, even on new property. Property prices in France are fairly stable so don't expect to make money on a rise in property value in the sort term anyway. As an investor be prepared to hold onto a property for at least 5 years or face a big caital gains tax bill. Rental laws seem biased towards the person renting rather than the property owner. For instance you cannot be evicted during the winter months, Oct - Apr, even if you refuse to pay your rent.

This site has a lot of useful stuff regarding buying property in France www.anglo-info.com

/edit BTW the Irish Govt are not averse to having a go at taking a second tax-bite from you even if you have already paid whatever taxes are levied in France.

Kinetic^

Hagar wrote:

Get some good independent advice before you jump in. Preferrably from an English speaking French Lawyer who works in France rather than a French speaking Irish Lawyer who works in Ireland.

Don't swallow any of the spiel from the selling estate agents. They are not unlike their Irish counterparts.

Expect to pay approx 15% of the purchase price in fees to estate agents, notaires, stamp duties etc. Get an extensive survey done, even on new property. Property prices in France are fairly stable so don't expect to make money on a rise in property value in the sort term anyway. As an investor be prepared to hold onto a property for at least 5 years or face a big caital gains tax bill. Rental laws seem biased towards the person renting rather than the property owner. For instance you cannot be evicted during the winter months, Oct - Apr, even if you refuse to pay your rent.

This site has a lot of useful stuff regarding buying property in France www.anglo-info.com

/edit BTW the Irish Govt are not averse to having a go at taking a second tax-bite from you even if you have already paid whatever taxes are levied in France.

I looked into this stuff a while back. Returns are crap and not worth the money. Also, you've to pay VAT but get it back initially. However if you sell within 20 years (its in or around 20 years) you have to pay the VAT back to the french government. They're looking for long term investors rather than just a year or 2.

badinfleunce

I had a bad experience with Imoinvest who claim to be the biggest supplier of French leaseback in Ireland. Firstly they are a French owned company who take most of their profit out of the country.---- Promote Irish business there are plenty of companies here in Ireland who are agents for all the French developers and the comission they recieve remains in the country. Also Imoinvest charge an administration fee ?????? mmmmm Exactly for what ??? They are recieving 5 to 7% commission on the sale price of the property you are buying!! eg. if you purchase a property for 100000euros they get 5000 euros in comission from the developer and they expect you to pay them an administration fee for the privilige of using a French company. I dont think so!!!! Buy Irish Promote Irish business.

They are not bonded and so in the event of the company doing a runner you havent a leg to stand on. That means any deposits etc. are gone.

They dont pay their sales staff so they are hungry for a sale. You will find most of the properties they have are located miles away from everthing.
You cant sell these properties for at least 15 years without getting hit heavy with taxes.
The properties are tiny. In most cases not more than 30sqm. Thats about the size of my dog kennel. They say that the French property market is very boyant but yet isnt there uprisings in Paris over the lack of employment etc.

In reality the French property market is very stable and will not see much growth in the near future unless there is some sort of a miracle.

My advice is always use an independent solicitor preferably in France who speaks English. Always ring a few agents in the area you are thinking of buying in and get the average price per square meter in that area. You will then know if you are getting value for money or not!!!!

Always think when you are buying your dog kennell - who will buy it from you??

If you ask this question to Imoinvest I bet they will say we dont resell leaseback. mmmmmm So who will sell it on for me??????? Maybe the cats and dogs home will take it on!!!!

mick.fr

We don't pay VAT on property purchase and rents in France, don't know what you guys are talking about ?

It is pretty easy to make money out of properties in France and a solicitor is not required at all. But when you are a foreigner, yes I understand the solicitor might help...a bit

There are properties all over the country, from small flats to big mansion.

If you want to invest in France you have to keep the following in mind :

- You can buy flats/houses in auction. When people have 20.000 euros left to pay to the bank through a mortgage, if they can not afford anymore, the property will be sold for 20.000 euros and not the market value as it is in Ireland.

- Buying a property through an agency will cost you 5% (Pay more if you are silly).

- Renting laws in France are really towards tenants. If a tenant does not pay anymore, has young children, this is winter time, there is no way you can kick him out. The full process usually takes 12-18 months to actually be able to get an eviction order. You are not allowed to evict people yourself, unless you want to end-up in jail. The police will apply the eviciton order only if they have an accomodation for you.
So take an insurance to cover the risk (Usually 50 euro a month on the top of the rent).

- When you buy a property in France you also have to pay the Notaire (The buy who will do all the legal documents). This cost about 7500 euros.

- When you buy a property in France, it legally takes 3 months. You can not get it before that.

- You do not really make money by selling them as the value will not really increase (Unless you do an outstanding re-vamp of the property itself).

- Buy small properties (Flats) if you want a faster return on investment. Do not buy a 200 square meter property, buy 50 square metter max flat and buy a few over the years.

- Only buy 10 years old max flats in shared building. Make sure you there is no central gaz/petrol system, if this thing breaks down, you will have to pay a lot, even if the cost is splitted with the other landlords.
Only buy property with individual electric system. Electricity is cheap in France, we have over 20 nuclear plants.

- Avoid properties with lifts, unless you buy on the ground or first floor.
As a Landlord, if you buy a flat in the last floor, you will have to pay more management fees.

- Do not buy farms, unless you want to live in there.

- Do not buy flats over 100k, this will impact your ROI.

- Do not buy in Paris City Center.

- Take an agency, you have no choice to manage your rent, unless you do everything yourself.

- As a Landlord, you will have to pay roughly the equivalent of one month rent to the taxe office once a year.

- If you have several properties, they should be managed within a single management company to optimize the revenues.
If you have one property only, do not bother.

With all thoses advices, it is quiet easy to make good money, but you have to have several properties.

With all that said, if you guys do not make money in France, drop me a PM.

mick.fr

You are welcome :-)