What Is As Safe As Houses

Making a property investment is, quite understandably, probably not foremost on your mind in the current economic climate. However, some people who have spare funds see this as the ideal time to buy up property at bargain prices. Reasonably priced properties are prevalent overseas and this therefore seems a good time to list a few facts about leaseback property investments and the French property market in general.

The key to the long-term profitability of a property investment has always been the choice of a property offering the perfect mix of yield and longevity through the combination of a good location and a strong management company. Finding a company that is extremely careful to select properties in prime locations with mainstream management companies possessing a proven track record is key.

While the media is currently painting a dire picture of the mortgage market, French lenders have not changed their lending policy for foreigners. Thanks to a common sense approach to lending that has kept French banks solvable for decades, it is still possible to obtain up to 100% financing on leasebacks and even fix your rate for the entire term. With a guaranteed rental income to boot, leaseback investments offer an attractive option in an otherwise uncertain market. It is possible to obtain a fixed rate of 5.65% (plus insurance) at present - compared to over 10% only 15 years ago! Interest rates are likely to keep increasing over the next months and years, so this is a good time to step in.

In spite of, and also because of the current financial crisis it is more necessary now than ever before to prepare for one's pension.

Bricks and mortar are widely recognised as the safest and most profitable investment in the long-term for a 'property pension', providing either retirement capital or a source of much-needed supplementary income. A leaseback property investment allows you to capitalise now for your future and as a tax-efficient investment scheme as opposed to simply hanging on to a buy to rent property.

France has not suffered from the property bubble of this last decade. If the number of transactions has fallen by 30% in this last year, it is due to a lower demand of course, but also because 2007 was a record year on all levels. Due to the heavy influx of foreign investors wishing for their 'own little piece' of France, prices have been over-inflated in many areas of the country and thankfully, they are now coming back down to a more sustainable level. It is impossible to put a percentage figure on growth or decline, properties worth 30% less this year than last, as reported by some press articles in the UK, were simply over-estimated in the frenzy of 2007. If the correct market price were to be taken as a basis for calculating growth, on average, resale property prices will have progressed by 140% in the last 10 years.

Under the leaseback arrangement, the rental yield is calculated on the basis of the price of the property on the day of purchase and the level of indexation of this income is clearly stated in the lease contract. Property owners will therefore be totally immune to any fluctuations in property prices - their income will remain constant and index-linked.

If there were to be a global recession to an extent where the tourist activity in France would diminish dramatically, Residences de Tourisme or Leaseback properties offer an affordable solution for families looking for self-catering accommodation. However, even in the worst-case nightmare scenario, this seems highly unlikely to ever happen: with air travel becoming an environmental and economic issue, France is easily accessible by train, ferry-boat or car from the rest of Europe. The country's rich historical and cultural legacy have ensured that France is the world's most popular tourist destination and there is no doubt that the French 'art de vivre' and taste for the good things in life, coupled with their desire to uphold traditions will continue to encourage visitors for many years to come.

Article Source: http://www.articlesgalore.info

Shaun Parker is a leading financial expert with many years of experience in the property industry. Find out more about consolidation loans at www.premierfrenchleaseback.com

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