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Considering a leaseback property ?

Posted on Wednesday 26th November 2014 by Lesley Thomas

If you're thinking about buying your dream ski property and are keen to make sure it's a good investment, then new-build and off-plan leaseback properties are worth well worth considering. Choosing to go down this route comes with some distinct financial advantages.

A leaseback is system where you buy the freehold of a property but lease it back to a management company. It's a common arrangement that has been running very successfully in France for over 30 years. Leaseback agreements typically last around 22 years ( but broken down into two 11 year periods ) and during that time you are guaranteed a return of about 3-4%. The property will be completely looked after and run by the management company. You won't have to do a thing. Of course, the trade-off is limited access to your alpine holiday home.

This limited access is probably the main factor you need to weigh up when considering whether a leaseback is right for you. When you own and manage your own property, you can go a the drop of the hat. If you rent it out yourself you can easily hold back the times of the year that suit you most. But most leaseback arrangements offer you more weeks at a good discount and some will even buy your unused weeks back from you if for some reason you can’t visit. For most people, who only look to ski one or twice in the season, then reduced access to their property is not a problem, as the usage allowance means no changes to their time on the slopes.

One of the strongest upsides to leasebacks is, as investments go, a return 3-4% stacks up well against the current slew of poor performing savings accounts. But the real financial advantage of entering into a leaseback arrangement comes in the form of the VAT rebate. This rebate is funded by the French government and gives the new owner nearly 20% back. On top of this you will also receive a two-year exemption of Taxe Fonciere (a bit like council tax), saving you another big chunk of money in your first years of ownership.

The other big financial factor worth considering is maintenance. When you decide to buy a new-build and leaseback you will know that your maintenance costs will be taken care of. This of course provides a level of financial stability to owning ski property. This is especially useful if this is your first property and a real bonus while you are just starting out and finding your way with it.

Everyone knows that buying a ski property is a decision from the heart more than the head. For many, owning their very own little slice of the Alps will have a value that can't be quantified in money however, the additional factor of your ski and for many, summer holidays, already paid for is another huge appeal.

If you are one of those people, but at the same time are keen to make sure your money is always doing the best it can. Then the combination of, financial incentives, potential for easy property management as well as guaranteed earnings, should put new-build ski property with a leaseback agreement high up your consideration list.

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