It’s a good question…and one that most lovers of France and investors ask themselves: what’s the best property investment you can make in France?
Fortunately there are several great ways to invest in France, all of which are different, yield different results and satisfy different needs. Therefore there should be at least one which fits your goals and desires.
1. Single ownership is one of the best ways to yield a high return. If you purchase an apartment, home in the country, village house, château or other kind of abode to live in yourself, then you will reap the enjoyment of the property and whatever appreciation takes place over the years of usage while costing little to own and maintain. Property taxes in France are relatively very low and affordable, and if you own the property more than 15 years, no capital gains tax will be due.
2. Should you decide to rent the property when you are not using it, depending on your rental yields, you can earn as much as 10% of the value of the property each year (before taxes), while still having the pleasure of usage. There is no question that in terms of strictly financial gains, this is by far the most profitable way to invest in France. Many variables will affect your profit success, but if done correctly, will out-perform all other kinds of investments.
3. Better yet, but at a much higher risk, are “viager” properties. A viager is a French term (and concept) for a property sold on a reverse annuity basis. That’s a formal way of describing how a person can sell their property in exchange for a down payment and regular cash instalments for the rest of their life, while continuing to live in the house or apartment. The only catch is that when the person dies, the property is surrendered to the purchaser. In a way, the purchaser is ‘betting’ on the seller’s death!
There’s a very famous story about the oldest French woman who ever lived, named Jeanne Calment. She died at the age of 122 outliving her lawyer 43 years her junior, who, when she was 90 years old, signed a deal to purchase her apartment at a monthly sum of 2,500 French francs until she died. The lawyer surely thought it a good deal, the woman already having lived long past an average life span, but he ended up paying more than double the apartment’s value!
These “life annuity” purchases, however, are normally big bargains, so should the “viager” live a less than an average life span, your investment could end up winning big.
4. Leaseback properties have been a very popular “scheme” the past 20 years for those who want a hassle-free investment that guarantees a certain yield, usually about 5% per year. It was introduced by the French government to increase the quantity of quality holiday accommodation available in areas capable of attracting more tourists.
The leaseback scheme enables you to purchase a property which then earns a rental income and which has a pre-selected property management company to whom you “leaseback” your property for a period which usually ranges between 9 and 12 years. Owners can spend up to six months a year in their property, with a guaranteed rental income depending on usage. This investment can be perfect for those willing to tie up their funds, have hassle-free and risk-free ownership of vacation property, without big gains.
5. Fractional Ownership is the newest concept on the market and balances well the idea of ownership, usage and investment. Similar to “Time Share,” owning a ‘fraction’ of a real asset such as an apartment in Paris, or home in the countryside, provides usage and decision-making power in proportion to your share, while the property appreciates and provides enjoyment. As a new concept, there are not many fractional properties on the market today, but it’s growing all the time. Like any of these investments, it has its upsides and downsides, but can be the perfect solution for those who don’t want the total responsibility of single ownership.
Which one is right for you? Good question. You must decide which of the five investment schemes work best for your needs, goals and lifestyle.
Note: Should you wish to explore any of these options in greater depth, contact: firstname.lastname@example.org or visit http://www.adrianleeds.com/frenchproperty/consultation and
About Adrian Leeds
Adrian Leeds is founder and director of the Adrian Leeds Group, LLC, a team of North Americans who provide complete property consultation services including property search, purchase and sales assistance, financing, and marketing and development of fractional ownership properties. She speaks at conferences and seminars in both the U.S. and France on the topic of Living and Investing in France. Her sites Parler Paris Apartments and Paris Palais Apartments provide reservations and booking services of luxury apartments for a select group of property owners in Paris and France, and vacation rentals for visitors to Paris. She is the author and editor of the Parler Paris Nouvellettre®, editor of French Property Insider, and the author of the first online restaurant guide to Paris soon to be published in print and online for iPhone and iPad under the name of “Adrian Leeds’ Top 100 Cheap and Chic Paris Restaurants.” In addition, she co-hosts her own brainchild, the popular Parler Parlor French/English Conversation Group in Paris where members from 50 different countries meet to practice speaking French and English. Adrian Leeds Group, LLC, her U.S. based company and her France-based company, Parler-France EURL, provide Web-based relationship marketing, public relations consultation and event coordination targeted to “francophiles” living in North America and France.