The leaseback scheme works on the principle that you acquire a newly built freehold property, fully furnished and ready to be let.
The properties are usually located in a “Résidence de Tourisme” (Tourist Residence) or “Résidence avec Services” (Residence with Services) which cater for short term lets and provide a variety of services usually to 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 in the resort, and the higher the guaranteed rental income is.
These leaseback schemes where initially promoted by the French government to enhance the tourist industry in different parts of France. Therefore, there are located in areas capable of attracting many tourists.
Leaseback property has been around for two decades in France and was introduced by the French government to increase the quantity of quality holiday accommodation available in areas capable of attracting more tourists.
When leaseback schemes are sold, there is a pre-selected property management company to whom you "leaseback" your property for a period which usually ranges between 9 and 12 years. In return, you receive a guaranteed rental income ranging between 3% and 6 % per annum of your initial investment, and which is increased each year with inflation. At the expiry of the initial leaseback period, the lease contract with the management company can be renewed.
Depending on the development, you can usually either use for free your property for a certain number of weeks per year for holidays, or get a 10 to 25% discounted price for use, instead.
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