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Let Scheme

France - French Buy-To-Let Scheme


The Buy-to-Let scheme is a way of investing in property in France without having the length of commitment of a leaseback property. Buy-to-Let contracts in France can be taken over a period of 3, 6 or 9 years as opposed to 9 to 11 years with a leaseback arrangement. Buy-To-Let contracts offer flexibility as to the type of letting arrangement which would most suit you.

Letting agents for Buy-To-Let developments are allocated when a development is sold with a set tenancy agreement. This generally does not allow the owner of the property any occupation, and offers you an estimated yield over a 3, 6, or 9 year period. However this is not to say that you have to use the allocated letting agent. It is often possible to find another local letting agent who will manage your property and let it in a way which would suit you. This could mean seasonal or longer term letting depending on your preference. If you would like to invest in a property but would also like to be able to spend more time in the property than usually allowed under the leaseback scheme or are wary of committing to a 9-11 year time frame, Buy-To Let in France could be a suitable alternative.

Buy-To-Let does not offer you a guaranteed yield (return) on your property; however letting agents will be able to estimate this for you. Please note that as the yield is not guaranteed you will only earn an income on a Buy-To-Let property when it is actually let. You may then feel that this is not a secure investment, however there are insurance policies which can be taken in France to protect landlords from periods of no income if the property remains empty, which would mean that you would be financially secure if this situation arose. The rental market is so strong in France (only 56% of the French own their property) that the various insurances provided (solicitors fees, degradation, rent paid if tenant stops paying, rent paid between two tenants etc.) are really there to secure your investment, bearing in mind that if you choose the location and management company carefully you may never need them.

Due to the high demand for rental property in France, and as long as you purchase within viable tourist areas or city centre properties, a lack of tenants should not be a problem.

Please be aware that purchasing a Buy-To-Let property in France is not a government arranged and backed scheme. Because of this, such purchases do not qualify for the VAT rebate that you would receive under the leaseback scheme.

People purchasing Buy-To-Let properties in France have three choices:

1. Buy the property and use the mandate to let the property out, there is rarely if ever personal occupation available as they are let out as residential lets, and you are tied in for a period from 3 to 9 years (in some cases less, in some cases more). There is no need for the owner to furnish the property.

2. Buy the property, furnish it and ask a local agency to let it out as a seasonal let. This allows the owner to earn an income and also go on holiday there when they wish. There are no rental guarantees for this option; however the rental yield may be greater than approximated by the first option if renting at key peak times.

3. Buy the property and live in it and do what you want with it, but not have a rental yield. However if you buy an off plan Buy-To-Let property, this is often cheaper than buying a single property sold on the private market. You also have the option to sell it when the property is delivered and enjoy a capital appreciation depending on how the market performed. Generally speaking, property owners often make between 10 to 25% on their property when they resell it in this fashion.


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