French Coastal Properties: 19.6% off

The beachfront homes in Biarritz are affordable and could earn you an income with the French leaseback program.

Tuesday, June 3, 2008
Paris, France

Read more about overseas real estate investing in International Living Postcards—your daily escape

Crazy as it might seem, one of the safest ways to invest your dollars right now is in property in Europe. In France, to be exact. Incredibly, the French government is giving a refund of the full VAT rate—just under 20%—when you buy certain new-builds. This would be a great deal as it stands, but for the icing on the cake, you also get a guaranteed rental income for at least the first nine years of ownership.

So what is this magic formula and how can you take advantage of it? It’s the French leaseback program—my friend Ronan McMahon outlined it in a Postcard recently. And the great thing is that anyone, resident or not, can benefit from the VAT refund and rental program.

New tourist resorts are included in the leaseback program (those 80 million tourists a year have got to sleep somewhere), as are business residences and student accommodation, all in prime locations where the need is greatest.

If you like the idea of a little place by the beach that’ll also bring in some cash, this might be just the thing. Coastal properties are always in demand for vacations, but with the chance to buy something with a 19.6% discount as well, they look even more attractive.

As each leaseback development is only as good as the company that runs it, make sure to do your homework and sign with a reliable management firm that has worked with French leasebacks before. Imoinvest offers programs run by companies with proven track records and is offering some new projects on the French coast—including two by the Mediterranean.

The Terrasses d’Embiez, close to Toulon, is one of them. Prices start at €151,000 ($233,000) for a one-bedroom apartment and rental income of up to 3.8%—about a quarter-mile from the Med. The other project is near Fréjus (where Mick Jagger was married), about three miles from the coast. A studio here costs €92,000 ($142,000) with 4.10% return guaranteed.

You can also choose from projects in Biarritz, Cabourg in Normandy, and the Ile de Ré near La Rochelle port. Just one word of warning: Don’t be tempted by the option to use the beachfront property, however much you yearn for the salt tang of the sea and the prospect of a swim in the sun every year. For investment purposes, this doesn’t make much sense, as you’ll forfeit some of the yield. You can always opt for a few weeks’ use later on, once you’ve banked your earnings and are into your second term with the management group.

To learn more about the French leaseback program, see The French Leaseback Program: Hassle-Free Returns in the World’s No. 1 Tourist Destination.

Leigh Fergus
Roving Europe Editor, International Living

P.S. If you want more information on any of the investments mentioned here, e-mail pr@imoinvest.com.

Read related articles:

- A French Leaseback: When the Dollar is This Strong, it’s Time to Buy France

- Turn Every Dollar You Invest Into $1.20…Instantly

- Get a Luxury Apartment in Paris for $134,000

- Your Own Home in a French Village…3 Hours From Paris—$54,000