The leaseback scheme works on the principle that you acquire a newly built property on freehold, fully furnished and ready to be rented out.
The properties are usually located in a “Résidence de Tourisme” (Tourist Residence) or “Résidence avec Services” (Residence with Services) that cater for short-term rentals and offer a variety of services. They usually include reception, breakfast, laundry and linen services, cleaning… Most of the leasebacks offer high-quality services and are ranked from one to four stars - the higher rank the better the services offered at the resort, and the higher the guaranteed rental income.
These leaseback schemes where initially promoted by the French government to boost the tourist industry in different parts of France. Therefore, they are located in areas that can attract many tourists.
Leaseback properties have been around for two decades in France and were introduced by the French government to increase the amount of quality holiday accommodation available in areas that are able to attract more tourists.
When leaseback schemes are sold, there is a pre-selected property management company to whom you "lease" your property for a period that is usually between 9 and 12 years. In return, you receive a guaranteed rental income between 3% and 6 % per year of your initial investment, which is increased each year by inflation. At the end of the initial lease period, the lease can be renewed with the management company.
Depending on the project, you can usually either use your property for free for a certain number of weeks per year for holidays, or get 10 to 25% discount for use, instead.
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