1 Bed Apartment for sale in France

Guaranteed rental income” (buy-to-let), began in France in 1964 and is the “prime” investment of the French. Currently, guaranteed rental return on long-term, unfurnished rentals averages 6-7% per annum (based on total purchase price).

“Guaranteed rental income” is for long-term, (3 year contracts), unfurnished properties, (NOT holiday rental), and owners receive the following FOR THE ENTIRE PERIOD YOU RENT OUT YOUR PROPERTY:

Guaranteed initial rental
Guaranteed cover against damage to your property by tenant
Guaranteed cover against rent default, as from first month and for an unlimited period.
Guaranteed regular income: if your property becomes vacant, or remains vacant for more than one month, you will receive a regular monthly income corresponding with the market value, (excluding rental charges), for an unlimited period.
These guarantees are fully backed by the French Government program "Loi Scalea". Scalea’s Law was introduced by the Government to encourage buy-to-let (own-2-invest) rental investment in France!

Maximum Growth :
As all experienced investors agree; you can talk about interest rates; “feel good” factors; etc etc – even the weather; but the ONLY thing that “truly” moves real estate is SUPPLY and DEMAND.

Well, France certainly has H U G E problems in that area with a government reported 1.5 million people short of adequate homes – of which over 1 million are renters!

Since 2001 and the introduction of “Loi Robien”, capital growth in the main metropolitan city areas has grown at average of 22% per annum. 2007 has seen a slow down in the market, by the French, in anticipation of the May and June Presidential and National Assembly/Senate elections. This was especially so as the outcome depended on the tax concessions to be given by Nicolas Sarkozy.
(Prices have only risen slightly while the French waited. Overseas investment has broken records so far!) Well he won!! New laws are in!! SO!!

Non-Recourse Mortgages
French mortgages are totally NON-RECOURSE!! (You are not personally liable for any default – the ONLY collateral is the property) Each property in France is its own entity; in respect of tax; mortgage and inheritance.
Does not effect your credit rating/points in your home country!
80% mortgages obtainable through all the major banks/lenders. (90% is now being offered by some banks; but only on full amortisization – in which case you will not cover the repayments with the rental – therefore, it is not recommended for investors)
Average mortgage rate (1 Aug. 2009) is 4%
Interest only mortgages available.
ALL FRENCH BANKS USE A SIMPLE SYSTEM. YOU MAY NOT BE ABLE TO OBTAIN A FRENCH MORTGAGE IF YOU CANNOT PROVIDE THE INFORMATION BELOW.

NOTE : FRENCH BANKS DO NOT LEND ON ANY TYPE OF BUSINESS ENTITY, (EXCEPT A FRENCH SCI); “TRUSTS”, OR ANY PROFESSIONAL OR SEMI-PROFESSIONAL PROPERTY INVESTOR OR COMPANY;

MORTGAGE BANKS CHECK LIST
About the property: (provided by developer)

A signed and completed copy of the preliminary contract (contract de reservation)
Attestation de valeur locative permanente. (Document from developer and management company that the property will be let under the French Civil Code).
About yourself : MUST BE PROVIDED BY YOU!!!!!

Completed and signed application form.
Filled in bilingual insurance form.
Photocopy of your passport clearly showing your personal details (for each applicant)
Marriage/ divorce certificate.
Copy of RIB (Relevé d’Identité Bancaire) from your French bank account. (this will be opened for you at later date if you do not have one – so leave blank)
Copies of loan agreements relating to any bank loans, car loans, or other loans.
Latest annual mortgage statements.
If property rental income is part of your total income, a copy of tenancy agreement and proof of rental income.
Last 3 consecutive months’ bank statement (for each applicant if not joint).
Evidence of where your personal contribution is coming from (eg copy of saving account statement).
If you are salaried (for each applicant):

Last 3 consecutive months’ salary slips
Last P60.
Confirmation of income and employment signed by your employer. An existing one will do.
If you are self-employed or a company owner (for each applicant):

Last 2 years’ accounts.
Last 2 tax returns.
FISCAL
France has double-taxation treaties with every country – and therefore you will not pay tax twice!

Tax on rental income is very low, in most cases zero after all deductions. Capital gains tax in France is on a sliding scale from 16% to zero over a maximum 15 years, (approx. 11 years after deductions).

We are more than willing to pass on our knowledge and experience; however we are not tax advisers or accountants and therefore strongly advise you to take personal advise from an international tax professional before investing. The notaire can also advise as it is part of his profession.

CLOSING COSTS
On new build and property up to 5 years old : 2.5% fixed.
Over 5 years old between 11 and 15%.

When selling, ALL costs are for the purchaser – non for the seller. The seller appoints realtor; notaire etc., but BUYER PAYS ALL.

French Property Investment Guide and Timeline
Requirements to acquire all new build/”off-plan” under French Property Acquisition Law :

For Residential/vacation/retirement : You must visit the property/development site first with a French licensed real estate professional expert.
For Investment (income producing/buy-to-let) : Either above, or attend meeting or seminar with a French licensed real estate expert. However, you do not have to visit the property(s) if ONLY for investment purposes.
Following is a helpful guide to give you a general idea of the timeframe for the process of purchasing investment property in France :

Reservation documents will be emailed to you 3 days after choosing property(s).
After receipt and 3 days to read; you then have 7 days to sign and *return documents to head office and transfer the 5% reservation deposit to notaire. Either fax or scan tracking and bank receipt to this office. If the tracking and bank receipt is not received on time – reservation is automatically cancelled.
Approx. 3 weeks after receipt, the head office/notaire signs contract and returns to you by registered mail and gives you another 7 days to cancel. If you cancel the deposit is immediately refunded by notaire to your account.
You have 15 days to apply for mortgage from day you send deposit. You must have loan completed within 90 days.
If you are refused French finance, (during the 90 days), your deposit is refunded.
IMPORTANT! After 5 months, if "deeds" are not signed, the developer has the right to increase the price of the property(s) to current market value, or to cancel the contract and retain the deposit!
* NOTE : Send all documents requested by courier, ie DHL, UPS, or FEDEX

RESERVATION (earnest money deposit) = 5%
CASH PURCHASE : After 3 months (or to where building completed - whichever is higher); another 25% plus "closing costs" for notaire/tax fixed on new build at 2.5%, (allow 10/15% plus agent's fees of 7% on old build). Then stage payments of approx. 10% to 15% every 2 to 3 months until completion.

FINANCED PURCHASE : If you take mortgage, you invest the reservation 5%; then the 15% plus "closing costs". During construction, the banks give you a choice that either you pay a small part of the interest they have paid out, (approx. 50 euros per month for each 100.000 euros borrowed) or pay nothing until completion. However, in this method, repayments will be slightly higher for "using" banks funds. (Mortgage insurance is compulsory if taking higher than 50% mortgage)

IMPORTANT NOTE : ONLY make payments direct to a French state notaire, or direct into the State Treasury Bank controlled by a notaire - never to any individual, company or entity.