FRENCH MANAGED PROPERTIES
A Managed Property or a Leaseback, also known as “tourist residence”, is a property like any other property, except that it is operated by a Management Company for a period of at least 9 years. The Management Company takes care of the property on the investor’s behalf, for the duration of the lease. It also undertakes to pay the investor a regular rental income (which is usually between 2 and 6% of the purchase price).
A Managed Property is a fully furnished property in a resort which often includes different type of facilities such as parking spaces, a swimming-pool, restaurant, Fitness room, children’s club etc. These kinds of properties are well-maintained by the Management Company, as it is in their interest to keep them in perfect condition so that they can be more easily rented.
In a leaseback scheme, the French government refunds 20 % VAT to the owner.
Usually, when investing in a Managed Property, the owner can choose between 2 options:
- Pure investment, which means that the management company pays an annual rent linked to inflation
- Property investment with holiday usage, which allows the owner to enjoy or share their property with their family for a few weeks whenever they wish, at the same time collecting rent from the management company (See terms and conditions in the commercial lease)
To sum up, becoming an investor in managed property means acquiring:
In the 1970s, as international travel became more mainstream and less expensive, more and more people started to cross borders for their holiday breaks and, in particular, began to visit France. Seeing the demand for tourism accommodation increasing over the years, the French government decided to take action. They introduced Managed Properties in order to respond to this significant demand and also to boost tourism in different areas around the country.
France is a wonderful country for tourism.
France has the longest and most diversified coastline in Europe with the most important ski area, impressive rural areas and breathtaking seaside. It is for these reasons that French locations are well-known worldwide. Managed Properties are mainly located in areas of France full of richness, quality and diversity. For example, Paris, the Côte d’Azur, Atlantic coasts and the Alps are unmissable places for foreign tourist visits.
ABOUT THE FRENCH TOURISM MARKET?
According to the United Nations World Tourism Organization, France is the world’s leading tourist destination with around 80 million foreign tourists each year. With a new clientele arriving, mostly from Europe and Asia, and its popular locations, France has remained the most visited country worldwide for the last few years. The increasing proportion of people coming from countries with emerging economies also plays a significant role in France remaining the top global destination.
The Foreign Office reports that 17 million UK holidaymakers come to France every year, with France being amongst their favourite destinations. Overall, tourism from within Europe accounts more than 80 per cent of visitors to France: UK with 17 million people, Germany with 13 million people, Italy with 7.8 million people, and many other places besides.
France offers three different coastlines (Channel, western and Mediterranean), several mountains ranges (Alps, Pyrenees, Jura, Massif Central and extinct volcanos in Auvergne), beautiful cities, a very wide range of food, wines and beers, and, lastly, a number of different climates across the country.
TO SUM UP
Advantages of buying a French Managed Property :
- A tranquil investment in a stable French market/span>
- A regular index-linked rental income for at least 9 years
- A fully maintained resort
- The best compromise between a second home and a pure investment
- A 20 % VAT rebate
- Favourable exchange rates
- Mortgages of up to 75%