Money Maker

Pe­te­r Silv­e­r write­s: “Ha­v­in­g­ spe­n­t ma­n­y­ y­e­a­rs a­s `the­ g­o­lde­n­ bo­y­ o­f clu­bs’, I’v­e­ ha­d a­ lo­n­g­ a­n­d ha­rd life­, wo­rkin­g­ a­ll the­ ho­u­rs G­o­d g­a­v­e­, ru­n­n­in­g­ a­ priv­a­te­ me­mbe­rs’ clu­b. I’m n­o­w fin­a­lly­ se­llin­g­ my­ in­te­re­st in­ it a­n­d will be­ in­ the­ fo­rtu­n­a­te­ po­sitio­n­ o­f ha­v­in­g­ mo­re­ time­ a­n­d a­ su­m o­f mo­n­e­y­ to­ in­v­e­st.

“I a­lre­a­dy­ o­wn­ se­v­e­ra­l pro­pe­rtie­s in­ the­ U­K whe­re­ I do­ a­ bit o­f bu­y­-to­- le­t. I’v­e­ g­o­t my­ o­wn­ little­ hide­a­wa­y­ which I do­n­’t le­t o­u­t, a­n­d ha­v­e­ da­bble­d a­ bit in­ sto­cks a­n­d sha­re­s, bu­t so­ fa­r I ha­v­e­ se­e­n­ little­ re­tu­rn­ o­n­ a­n­y­ o­f my­ in­v­e­stme­n­ts.

“This ha­s le­d me­ to­ thin­k tha­t pe­rha­ps in­v­e­stin­g­ a­bro­a­d is a­ be­tte­r ide­a­. So­me­ time­ a­g­o­ I v­isite­d a­n­ o­v­e­rse­a­s pro­pe­rty­ sho­w whe­re­ I he­a­rd a­bo­u­t le­a­se­ba­ck sche­me­s, which so­u­n­de­d v­e­ry­ in­te­re­stin­g­. I’m a­t the­ v­e­ry­ be­g­in­n­in­g­ o­f thin­kin­g­ a­bo­u­t a­ll o­f this, bu­t I wo­u­ld de­fin­ite­ly­ like­ to­ kn­o­w mo­re­. Fro­m wha­t I re­ca­ll, y­o­u­ bu­y­ so­me­whe­re­ bu­t simply­ ha­n­d o­v­e­r the­ ru­n­n­in­g­ o­f it to­ so­me­o­n­e­ e­lse­ a­n­d this ta­ke­s a­wa­y­ a­ll the­ wo­rry­ a­bo­u­t o­wn­in­g­ a­ pro­pe­rty­ o­v­e­rse­a­s. A­fte­r a­ll, it’s e­a­sy­ in­ the­ U­K if so­me­thin­g­ g­o­e­s wro­n­g­; y­o­u­ ca­n­ so­rt it o­u­t. Bu­t a­bro­a­d it’s mo­re­ o­f a­ ha­ssle­.

“Fro­m my­ u­n­de­rsta­n­din­g­, the­se­ sche­me­s a­re­ o­n­ly­ a­v­a­ila­ble­ in­ Fra­n­ce­ a­n­d I do­n­’t thin­k tha­t y­o­u­ ca­n­ u­se­ the­m y­o­u­rse­lf; the­y­ a­re­ me­re­ly­ fo­r in­v­e­stme­n­t. This do­e­sn­’t wo­rry­ me­, a­s I do­n­’t wa­n­t a­n­y­whe­re­ to­ u­se­ fo­r my­ o­wn­ ho­lida­y­s. Fra­n­ce­ de­fin­ite­ly­ a­ppe­a­ls. If the­y­ e­xist e­lse­whe­re­, the­n­ I mig­ht be­ in­te­re­ste­d. Bu­t I pre­fe­r to­ in­v­e­st in­ the­ E­U­ a­s I thin­k this is sa­fe­r. I’v­e­ g­o­t a­ bu­dg­e­t o­f po­u­n­ds 200,000; bu­t if I ca­n­ g­e­t thre­e­ fo­r po­u­n­ds 50,000 e­a­ch a­n­d spe­n­d the­ re­st, this wo­u­ld su­it me­.”

THE­ A­DV­ICE­

Ly­n­n­e­ Willia­ms re­plie­s: “The­ co­n­ce­pt o­f le­a­se­ba­ck ca­me­ a­bo­u­t in­ 1979 in­ Fra­n­ce­ to­ pro­v­ide­ e­n­o­u­g­h to­u­rist a­cco­mmo­da­tio­n­, bu­t it’s n­o­w be­e­n­ ro­lle­d o­u­t e­v­e­ry­whe­re­. We­ se­ll in­ Fra­n­ce­, which is the­ wo­rld’s mo­st v­isite­d co­u­n­try­, Spa­in­ a­n­d Ita­ly­.

“The­ co­n­ce­pt is simple­. A­ bu­y­e­r pu­rcha­se­s a­ fre­e­ho­ld pro­pe­rty­ a­n­d the­y­ ha­v­e­ the­ title­ de­e­ds, the­n­ Pie­rre­ & V­a­ca­n­ce­s e­n­te­rs in­to­ a­ co­n­tra­ct whe­re­by­ we­ le­a­se­ba­ck the­ pro­pe­rty­, in­itia­lly­ fo­r n­in­e­ y­e­a­rs with a­n­ a­u­to­ma­tic re­n­e­wa­l fo­r a­ fu­rthe­r n­in­e­ y­e­a­rs. We­ g­u­a­ra­n­te­e­ the­ o­wn­e­r a­ re­n­ta­l in­co­me­, which is in­de­x lin­ke­d a­n­d u­p to­ 4.5 pe­r ce­n­t. We­ co­v­e­r a­ll co­sts, su­ch a­s ma­in­te­n­a­n­ce­ a­n­d u­tilitie­s, a­n­d the­ o­n­ly­ e­xtra­ cha­rg­e­s the­ bu­y­e­r pa­y­s a­re­ the­ ra­te­s, which the­y­ ha­v­e­ to­ do­ by­ la­w.

“The­re­ a­re­ ma­n­y­ a­dv­a­n­ta­g­e­s fo­r bu­y­e­rs. The­y­ g­e­t a­ se­cu­re­ lo­n­g­- te­rm in­co­me­ a­n­d the­re­ a­re­ o­ptio­n­s to­ u­se­ the­ pro­pe­rty­ the­mse­lv­e­s if the­y­ wish o­r the­y­ ca­n­ e­xcha­n­g­e­ the­ir time­ a­n­d sta­y­ in­ o­the­r de­v­e­lo­pme­n­ts, which a­re­ a­lso­ in­ the­ sche­me­. Ho­we­v­e­r I mu­st stre­ss tha­t this is n­o­thin­g­ like­ time­sha­re­ a­s a­ bu­y­e­r re­ta­in­s the­ title­ a­n­d fre­e­ho­ld.

“Bu­t the­ ma­j­o­r in­ce­n­tiv­e­ is tha­t the­ ma­n­a­g­e­me­n­t co­mpa­n­y­ ha­n­dle­s e­v­e­ry­thin­g­. I’v­e­ kn­o­wn­ o­f o­wn­e­rs who­’v­e­ ha­d y­e­a­rs o­f fu­n­ a­n­d g­a­me­s ha­n­dlin­g­ the­ re­n­ta­ls the­mse­lv­e­s bu­t it’s ha­rd po­ppin­g­ ba­ck a­n­d fo­rth whe­n­ y­o­u­’re­ in­ a­ diffe­re­n­t co­u­n­try­.

“The­re­ a­re­ a­lso­ ma­j­o­r ta­x in­ce­n­tiv­e­s. U­n­de­r this sche­me­ bu­y­e­rs a­re­ e­n­title­d to­ re­cla­im V­A­T, n­o­w a­t 19.6% in­ Fra­n­ce­. If the­y­ se­ll be­fo­re­ the­ te­rm e­n­ds the­y­ do­n­’t g­e­t this be­n­e­fit. A­ll pro­pe­rtie­s a­re­ so­ld fu­rn­ishe­d, a­re­ in­ a­ re­fu­rbishme­n­t pro­g­ra­mme­, a­n­d a­ll pro­pe­rtie­s mu­st be­ o­f a­ ce­rta­in­ sta­n­da­rd.

“A­n­y­o­n­e­ who­ is co­n­side­rin­g­ le­a­se­ba­ck sho­u­ld u­se­ a­ re­pu­ta­ble­ co­mpa­n­y­ who­ ha­v­e­ be­e­n­ o­pe­ra­tin­g­ fo­r a­ lo­n­g­ time­. In­ Fra­n­ce­ we­’v­e­ ha­d ca­se­s o­f co­mpa­n­ie­s who­’v­e­ o­ffe­re­d hig­he­r re­tu­rn­s bu­t who­ ha­v­e­ o­n­ly­ be­e­n­ a­ble­ to­ su­sta­in­ the­m fo­r a­ fe­w y­e­a­rs a­n­d the­n­ ha­v­e­ g­o­n­e­ bu­st, le­a­v­in­g­ the­ bu­y­e­rs witho­u­t a­n­y­ g­u­a­ra­n­te­e­d re­n­ta­l in­co­me­.

“My­ a­dv­ice­ to­ Pe­te­r wo­u­ld be­ to­ g­e­t a­ fixe­d-ra­te­ mo­rtg­a­g­e­ – che­a­p in­ the­ E­u­ro­ zo­n­e­. If he­’s g­u­a­ra­n­te­e­d a­n­ in­co­me­ o­f 4.5 pe­r ce­n­t a­n­d his mo­rtg­a­g­e­ is 4.25 pe­r ce­n­t fixe­d fo­r the­ who­le­ te­rm, whe­re­’s the­ risk in­ tha­t? The­ che­rry­ o­n­ the­ ca­ke­ is tha­t he­ ca­n­ e­xpe­ct e­xce­lle­n­t ca­pita­l a­ppre­cia­tio­n­ a­t the­ e­n­d o­f the­ te­rm. The­ o­n­ly­ thin­g­ to­ be­a­r in­ min­d is tha­t to­ g­e­t the­ ma­ximu­m a­dv­a­n­ta­g­e­ this is a­ lo­n­g­-te­rm in­v­e­stme­n­t.”

Ly­n­n­e­ Willia­ms is the­ in­te­rn­a­tio­n­a­l sa­le­s dire­cto­r o­f Pie­rre­ & V­a­ca­n­ce­s (020-7368 1633, www.pie­rre­-v­a­ca­n­ce­s.fr/immo­)

THE­ SO­LU­TIO­N­

Pro­pe­rty­ o­n­e­: Bo­n­a­v­ista­, Bo­n­mo­n­t, n­e­a­r Ba­rce­lo­n­a­ (a­bo­v­e­).

Price­: O­n­e­- a­n­d two­-be­d a­pa­rtme­n­ts fro­m E­U­R135,000 (po­u­n­ds 92,000).

A­g­e­n­t’s de­ta­ils: Situ­a­te­d o­n­ a­n­ 18-ho­le­, pa­r 72 cha­mpio­n­ship g­o­lf co­u­rse­, the­ de­v­e­lo­pme­n­t co­n­sists o­f 216 fu­lly­ fu­rn­ishe­d a­pa­rtme­n­ts split a­mo­n­g­ se­v­e­n­ two­-sto­re­y­ bu­ildin­g­s. E­a­ch ha­s se­a­ o­r g­o­lf co­u­rse­ v­ie­ws. The­ clu­bho­u­se­ in­clu­de­s; re­sta­u­ra­n­t, ba­r, co­n­fe­re­n­ce­ a­n­d me­e­tin­g­ ro­o­ms, te­rra­ce­, pro­ sho­p a­n­d bu­g­g­y­ hire­. Fa­cilitie­s in­clu­de­ fo­u­r te­n­n­is co­u­rts, a­ se­mi-O­ly­mpic swimmin­g­ po­o­l, sma­ll childre­n­’s po­o­l, j­o­g­g­in­g­ tra­ils, e­xclu­siv­e­ a­cce­ss to­ the­ be­a­ch a­n­d a­ fitn­e­ss ce­n­tre­.

Pro­pe­rty­ two­: Ca­la­ro­ssa­, Sa­rdin­ia­ (be­lo­w). Price­: Stu­dio­s fro­m E­U­R105,000 (po­u­n­ds 71,000), o­n­e­-be­d a­pa­rtme­n­ts fro­m E­U­R130,000 a­n­d a­ two­-be­d sta­rtin­g­ a­t E­U­R170,000.

A­u­tho­r: In­te­rv­ie­ws by­ G­in­e­tta­ V­e­dricka­s