Buy to Let FAQ

These FAQs are offered as a guide only - please check your development for exact terms and conditions.

Characteristics:
New builds properties include off-plan as well as refurbished properties.With any new build property, we offer you a turn-key formula property investment, giving the opportunity to any investor to buy a new build property anywhere in France, receive a guaranteed income while the property goes up in value. This means that you will lease the property to a permanent tenant and a property management company will look after your interests and will pay you an income on a monthly basis.

Why buy a new build and sign an agreement with a property management company?

• Buying a property off-plan typically realises a capital appreciation of at least 10 to 30% during the building process, depending on the length of the construction project and the location of the property.

• There is a 10 year guarantee on the material and 2 years on the fittings.

• You are guaranteed an income for up to 9 years, with breakdown points on the 3^rd and the 6^th year, where you can decide to continue or cease the lease.

• The residence is managed by property management company such as FONCIA, one of the leaders in the property management field.

The difference between a lease-back and a management contract:

• The property is let out to permanent residents as opposed to holiday-makers for leaseback properties.

• No free weeks or personal usage during the lease term, but it is possible to live in the property for unlimited time

• No furniture to buy, the apartments are let unfurnished.

• Very flexible terms compared to lease-backs, with the possibility to break the contract with the management company at anytime.

• Prices do not incur VAT, so no VAT will be paid

• New builds offer more choice of properties compared to lease-backs

Purchase procedure for all new builds:

1. Signature of a reservation contract sent to the developer and payment of a 5% deposit.

2. Mortgage application.

3. The notary prepares the purchase documents and sends them to the purchaser.

4. A Power of Attorney is sent to the purchaser who will sign the document in the presence of the public notary in the UK (when the purchaser prefers to sign in the UK).

5. Mortgage approval received from the bank.

6. Signature of the acts with the notary – purchase completed.

 Notary fees:

3% for new builds (7% for existing properties).

Stage payments for New Builds (in general):

1. At the secured deposit 5%.

2. At the start of foundations 25%.

3. At the completion of the foundations.

4. At the beginning of the lower floor of the apartment.

5. At the completion of the lower floor of the apartment 5%.

6. At the setting out of the water 5%.

7. At the beginning of partitioning 15%.

8. At the end of partitioning 5%.

9. At the completion of the works 5%.

10. At the handing over of the keys 5%.

Guarantees

Guarantees offered by the property management company.

• Guarantee against unpaid rent and damage caused to the property.

  • The management company will settle the rent on behalf of the tenant, in case he fails to pay his rent. This includes service charges.

  • The management company will pay for any damage caused by the tenant and will proceed to all the repairs: plumbing, electricity, tiling, painting, masonry.

• Guarantee of occupation.

• If the property becomes vacant, the management company will still guarantee you the rent.

Rent guaranteed:

• Between €10 and €15 per sqm depending on the location of the property. Yields vary between 3 and 5.5% depending on the location and the size of the property.

Your charges:

1 - Land tax: €6 to €9 per sqm per annum. In general no land tax is payable during the first two years.
 

2 - Management company fees: 9% of the rental income per month.
 

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