Rent paid upfront investment

We are introducing you to a new concept. Put simply you:
• buy freehold property,
• take out a 15 to 17 year lease,
• get all your rent paid upfront

The additional benefits over other French property are as follows:
• No rental risk
• No management issues (management company deal with everything)
• No local taxes or Syndic fees (responsibility of manager)

How does it work?

Under French law you can split a property into 2 parts:

1. Ownership of the physical property (“nue-propriete”), and
2. Full use of the property for a specified period (“usufruit”)

As an investor you take on the nue-propriete and a rental management agency will take care of the usufruit for you for the term of the agreement.

The rent of the usufruit is calculated upfront and deducted from the purchase price (allowing for rental indexation and is also discounted to allow for the fact that you are getting the rent now rather than over time).

Example:

Property purchase price:         €181,818
15 years rent                        €  81,818 (€5,455 per annum)
Investment required               €100,000

Simple return on investment      5.45%

Exit strategy

• No minimum period of ownership
• Can be sold, mortgaged or inherited
• No early sale penalties
• French law positively governs tenancy situation at the end of the 15-17 year deal