Overseas Leaseback

gallygirl

Does anyone know anything about this or can recommend a good company?

The main ones coming up on search engines seem to be themovechannel and imoinvest.

Pitfalls etc? A assuming property is sold at a premium to account for guaranted income.

Also, few weeks ago I had an email which I meant to keep but delted. Basically, introdcuing you to property in Grimsby area with sitting tenants for sub 30k, also had 'DSS' style tenants in USA (from reading info I guessed was talking about Detroit) - does anyone know the company, can't find them anywhere.

Thanks. PS Am looking at teh cheaper end, sub 50k, but NOT Sunny Beach!!!

Tassotti

What's wrong with Sunny Beach?

gallygirl

Probably nothing - but have read a lot about the scale of development - concerned there is too much to sustain demand. Same as Dubai.

Looking for easy money with no effort , seriously, have interests elsewhere and am looking for an easy life, which is why leaseback appeals at the mo.

GUMPO

http://www.tiscali.co.uk/money/guardian/features/2006/01/21/libert-egalit-or-catastroph.html

Decent little article about leasebacks and the pitfalls here.
Couple of pointers,
1 Lookbefore you buy, don't trust a plan or a salesman.
2 Because these are guaranteed income people with lots of money are always snapping up the premium sites especially in France where the goverment puts in a portion of the cash.
3 That said there are some interesting properties in French cities where they are being built under leaseback schemes as cheap housing for public sector workers rather than holiday homes.
4 Make sure you know what happens at the end of the lease some say that if you want to rent it out again you are tied to the same company and others that the properties are not to be used as permanent residencies meaning they can be difficult to sell on.

If I remember anything else I will let you know.

Tassotti

I know of a Turkish Development that guarantees 10% return for 10 years.

However, I reckon that the return is factored into the purchase price. They are effectively giving you back your own money.

The leasebacks you mention are usually in France from what I can tell and offer around 5%. Hardly staggering, but I must admit I haven't researched them thoroughly.

brigittejohn

I have purchased a French leaseback about a year ago and I am quite disappointed.
The so-called return of 5% is gross of everything. You have to pay service charges (charges de copropriete), council tax (taxe fonciere), VAT on the rent that you receive, accountant's charges on the preparation of the VAT returns.
Costs of purchasing come to many thousands of pounds (legal fees, lawyer fees, estate agents fees and bank mortgage set up fees) and are also not factored in the so-called return of 5% (sometimes less than that).
We have five weeks usage (one high, two medium and two low season) which we can exchange to use in other properties of the group, which sounds brilliant in theory, yet they only allow us to go to their oldest, 2 star rated places, and the benefit in kind is deducted from the rentals received.

The bank is France charges monthly administration fees (again not accounted for in the initial financial calculations).

The mortgage bank charges a set up fee, and after only one year has already increased our yearly mortgage by more than 10%.

On top of that I had and still have any number of hassle with correspondance and transfers and cheques etc, which is really annoying as this was meant to be a "hassle free" buy to let kind of deal.

So, you have been warned!!!

Any questions, please ask.
I'll answer to the best of my knowledge.
Brigitte