This week, I had a very enlightening conversation which I wish to share with people.

Many Leasebacks are sold to overseas people . The way in which they are sold may be not be as they were actually are.

What do I implie.

These properties you can never live in - the buildings are licensed residence de tourism.

There could be repercussions in the further in the future with resales, as this are not like normal Free hold properties. This is starting to come to the light and could have major repurcussions for people who brought into Leasebacks at the end of the 9 or 11 year tenure. They may not be able to be sold and the management company may demand another 9 or 11 years rental.

There are different tax and legal rules for the French, but for overseas clients. A time bomb is potentially ticking. ie. they may have brought something they can not get out of, they may have renew the contracts for a further 9 or 11 years, and if they opt out and sell, if they can then they could be liable to pay back some of the tax they were offered in the first instance. Basically a nightmare situation is potentially brewing.

I have been different opinions from different people deriding this *they make they living out of this eg. Lawyers etc that were pretty rude, but I have a good insight that this information is stable and correct.

If you are not in the leaseback market, in my opinion do not enter, if you are in, maybe look at what you have brought seriously and look at your consequences, your time bomb will maybe start on renewal or if you try to sell on and then you have to pay back taxes etc.

All is not what it seems with LEASEBACK. - the illusion is shattered.

Kindest Regards Darren

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How very true Darren ....

So many people are attracted by the return of TVA (Vat) and the rental income without the hassle of managing the lets. Plus of course there's the added bonus of having a few weeks holiday accomodation....

Another observation ....... At the start the properties look fantastic, but after a few months of various holiday makers having used the accomodation they can start to look tired. After a few years, very much so.

At the end of the lease, some people will decide to sell, but with a lot of similar properties for sale in the holiday complex, the market can be drenched and this can have an adverse effect on the selling price.

In some cases the leasebacks are bought back by the management company, and then sold on to another management, who either re-builds or refurbishes, and once again there is another chance to buy a new leaseback investment property.

Of course there are some good management companies. The banks who lend mortgage finance on leasebacks often have a list of the leaseback complexes that are preferred - if they're not on the list they will not lend finance.

Whatever .... think carefully .... a salesman is there to make a sale.

Kind Regards
Carole Bayliss
mortgagefrance

John howells did a two page document on leasebacks.
Advantages - 3
Disadvantages - 9

Be very careful with this investment. It looks good on the surface, but the shark is below the waters.

regards dc

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Darren where can we find the document by John Howells to have a read?

Jackie

Jackie, I dont know if I can release as it is paid for information. I would need to ask. regards Darren
The long and short of it, is leasebacks can be quite damaging to your wealth and health if you invest. They are not properties that you can simply live in or resell, they are licenced tourist premises, and the implications are that if the management company want to renew the contract they can do if you like it or not, and there are other horrors or potential downsides, not really spoken about.

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Thanks Darren

When you say paid for.. for do you mean?
Have you commissioned the information or is it on a paid for site?
Can anyone pay for the information

Thanks

Jackie

John Howells used to have all their reports on their website but it is being updated. If you want it just ask them, they normally quite willing to give helpful background information and I'm sure they would provide as it makes sense in terms of marketing.

I undertake due diligence on behalf of investors and always advise people to stay clear of French leasebacks for some of the reasons above and concerns over their commercial viability and possibility of selling them for a decent profit. The VAT is factored into the prices so there is no real savings anyway.

There is absolutely no need to fall for these types of gimmicks. If you do your homework and find a good investment then you should achieve a decent yield and be reward with good capital appreciation .

Geordie

Hi,
Well well well, finally someone has the sense to realise that if it sounds too good to be true it usually is, most leaseback schemes are NOT a good investment no matter where they are.
The French property market is one of the most stable and safe in Europe, the checks and balances of buying normal property ie: second homes,homes for rental and permanent residences, are excellent, all done by Notaires
President Sarkozy is enacting tax breaks for home buyers, which will send property prices rising at a very good rate as more French people will become eligable to buy property, now is a good time to buy, next year I think prices will be considerably higher in all regions of France, its a great place to buy.

exactly, but capital appreciation is falling though and will probably be below 5% this year. Big piece on France in the Irish Sunday Times this weekend.

Hi geordie,
where do I get a copy of that article from the Irish Times on Sunday?could someone send it to me by e-mail huffsinfrance@wanadoo.fr Thanks, invest in France.