This type of investment is a product of the French Government looking for a solution to holiday accommodation shortages in tourist areas. The French Government's initiative has produced a large market for this type of property with developments in many areas of France including Paris, Brittany, the Mediterranean coast and ski resorts. The French have been significant investors and the market has been open to international investors for many years. The success can be measured by the increasing number of developments coming to the market. Some ski resorts have been sold out within a week of launch.

How does it work? There are two elements - the purchase and the lease for rental. To encourage the purchase of these properties, the French government will refund the 19.6% TVA (tax) - so you are effectively buying at a discount from day 1. On the rental side, you are agreeing to lease the property back for rental. The management company will offer you a guaranteed rental on the property for typically a 9 or 11 year period - after the initial period you can re-negotiate the rental terms. Usually, the guaranteed rental incomes are between 4 and 6% of the purchase price per annum. Often the rental company will let you occupy the property for 2 to 6 weeks per annum as well. The personal use varies according to each development. Properties are sold furnished and maintained in excellent condition by a management company during the lease term.

Does this sound attractive? Well, the financing is also exceptional. On some developments there are 100% mortgages available depending on your personal circumstances. We have many mortgage brokers offering 80% financing on French Leasebacks. With Euro mortgage rates at around 3% - although there is a current upward trend - your rental income will cover the mortgage payments.

And there is more - there are tax advantages and reduced notary fees for new property. Most of the leasebacks offer high quality services and are ranked from one to four stars - the higher rank the better the services offered in the resort.

On 1st-for-French-Leasebacks we have over 100 developments across France. In particular, we would recommend Provence leasebacks, and the Ski Resorts but we have developments in many major centres including Paris, Bordeaux, and somewhat further afield the beautiful island of Corsica. There is a complete explanation on our web site including a breakdown of costs and payment schedules.

In summary, a government backed initiative with 19.6% TVA refund and guaranteed rental income. At this stage it is impossible to predict capital growth on the property price - suffice to say, many of these developments are in prime locations.