What Is A Lease Back Plan?

A lease-back plan is a scheme where you buy a property then grant a management company the right to use it for short-term tourist rentals, this usually over a period of 9 years. You receive in return major tax breaks from the French administration as well as a guaranteed rental income for the duration of the contract.

Anyone can buy a lease-back property; there are no restrictions for non residents.

The buyer pays the asking price for an apartment, less the VAT (19,6%).  In return for a lease-back contract to a management company the buyer gets a net guaranteed return of 5 to 6% depending the location.  These returns are net during the term of the lease, which means net of the running costs, as well as index linked.  Everything is covered, from management fees to city tax, water and electricity charges, heating and air conditioning, even down to replacing the furniture.  In terms of returns, property price rises may seem modest against those occurring on the stock market on the short term, but when financing is used the return potential is much higher and banks will lend more money for longer periods at lower interest rates for property than for almost any other asset. The French banks usually lend 80 % of the property value.
By using leveraging you can invest a relatively small amount and yet reap the gains on a large amount.
With the uncertainty in the stock markets and decreasing pension values, Investors both big and small are looking for safer options. With small capital outlay, minimum risk and Guarenteed rental return, a lot more people are finding Leaseback to be a good alternative.  Especially as the lease-back programs are located in the best locations in terms of Capital gain potential . Areas such as Paris, the French Riviera and some of the well known ski resorts.  Further details of these and others can be found on our investment website below.

 http://www.french-investments.com

Lease Back Plan An Ideal Investment Opportunity

The lease back scheme has been running since 1986 hereafter is a text on the program to give you a better insight into it's evolution.
Article on leaseback:- Created in 1986 by the French Government Residence du Tourisme. The Government set down a regulation stating that  a residence de tourisme  must meet a certain criteria. Such a building must have 100 beds minimum  eg 25 apartments sleeping 4 persons ,  offering a minimum  level of services ,  reception , laundry, house cleaning, breakfast facilities.  Driven by the rising demand from tourism and business visitors to the country, France being the number one tourist destination in the world, there became a  demand for better improved facilities from these visitors and gave rise to the need for some sort of action. This has also led to job creation for many people now involved in the industry, which  otherwise would not have been available and the generation of new hard currency into the country. This scheme had to give incentives to investors to buy into the program and the developers a reason to build. Tax incentives were offered on both sides , the waiver of VAT on the purchase price and various leveraging permitted to reduce income tax liability. For the builder, local authorities will generally lean more favourably towards a planning permit where the developer is looking to build a service apartment or hotel. This is especially evident in cities such as Paris and around the Côte D'Azur. In Nice for example, the International Airport passenger capacity  has grown from 5 million to 9 million with the construction of the new terminal 2. The three latest buildings to this program, one in Antibes, Beausoleil and another in Theoule, will not come close to meeting the requirements for rented accommodation. Hence why there is so much confidence in Leaseback from foreign investors and developers alike.  To give an example of how and why this works, a normal residence owned and used for personal occupation, would generate little or no extra revenue as these people may visit only a fortnight a year and maybe not rent out at all. However from a Residence de Tourisme  with 100 apartments. It is  calculated that  the number of visitors who pass through such a residence in any one year may be as many as 20,000. All of these by visiting the shops, doing business, eating in the restaurants, are creating a requirement of services and a growing work force. The local authority also benefits, from taxes paid by revenue from these residences and the infrastructure of the towns are maintained and low levels of unemployment experienced. When you consider in any one town there will be a number of these residences,  then it  is clear why there is backing from all quarters.  Especially as all of these factors go towards having a positive  effect on the local economy and therefore the economy in France. Leaseback is a "Guaranteed Rental" investment plan which has grown up out of the need to meet the ever growing demand for accomodation triggered by the flow of tourists. France takes tourism seriously and is one of the most frequently visited, world tourist destinations, in terms of numbers 74 million in 2003. Two decades ago the French government needed to come up with a solution in order to enhance the development of programs and to ensure quality accomodation for its' visitors.and Leaseback plan was evolved.