What is a sale leaseback?

If you buy a leaseback property, you are buying it as an investment. The idea behind leaseback is that you buy a property and are guaranteed* rental income year round for that property, normally for France, up to about 4%pa. You then have the option of using the property for holidays at the cost of reduced return.

Here is an example

Leaseback property sold in Avoriaz, France

4% guaranteed rental income with Maison Individuelle with NO OCCUPANCY
You may then choose a week at peak season or two weeks at off season for 0.25% reduction in that return, to 3.75%pa

A Lease is between 9-11years in length and at the end of a lease you can choose to move out of leaseback.

Advantages:

Fully managed and renovated at no extra cost to the owner**
Guaranteed rental income regardless of whether a tenant is in occupancy
Risk free* investment with personal usage time available

Disadvantages:

Usage is restricted to maximum 6months per year (dependant on vendor) with no rental income

For more details, see the Maison Individuelle website at www.mifrance.co.uk

*Risk free guarantee depends on the security of the agent and vendor, for example, Pierre et Vacances and Lagrange are financially secure and still expanding their range, this means they can guarantee rental income and are a safe investment

**Renovation is charged to the owner, normally towards the end of a 9-11 year lease, however it is possible to account for this and there are options that allow the renovations to come included. For more information on this see the above website.