Purchase Price, Rental Income, Owner Usage

Price : 165 000 € 

Guaranteed rental return 5,75% (Annual rental return as a percentage of the sales price)

Financing : French mortgages are available to help you complete the purchase (subject to approval). Contact us for more information and quotes. We also have English speaking notaires who can efficiently assist with the sales transaction. 

Lease Contract (“Bail commercial”)

The property is sold with a commercial lease, running until January 31st, 2013 then automatically continued. The management company is Espace2 Vacances/CERS, part of a much larger group, Arie Promotion, that have been in real estate development since 1984. They have consistently paid rent on time each year and the inflation indexation of the rental income has been applied as expected with an increase every three years. The lease is automatically continued after expiry under the same conditions unless either party formally proposes a change or requests to stop it. If the property owner decides to end the lease, the management company can ask for a penalty since they have invested in the marketing of the residence and will no longer be able to rent that unit. The convention is to ask for one to two years of rent however this is often negotiated. The property was developed under the French government scheme for rural tourism development and sold VAT free with the condition that be rented commercially for 20 years. Therefore the property must continue to be rented under a commercial lease until 2024 or the pro rata VAT will need to be repaid which amounts to 1700 euros per year. For example, if the commercial lease was stopped in 2020, the property owner would need to pay 1700 x 4 years = 6800 euros to the French government.

http://www.espace2-vacances.fr/

http://www.leshautsdevalmeinier.fr/presentation.html

http://www.arie-promotion.fr/pages/articles/fiche.php?s_code=nos_references&s_wbg_menu=5&menu=1

Rental income : 9 504 € (ex vat) per year, paid in two installments (July and January.)

Owner Usage :

As this is a pure investment property you do not get use of the property during the commercial lease. However, owner’s enjoy a discount of 30% off the public rate sheet (and even up to 40% as the discount applies to promotional rates as well.) It has also been possible for the owner to rent multiple apartments for the same week when inviting friends, all with the discount. Lastly, owners get the same disccount at the group’s resort near EuroDisney : http://www.laresidenceduparc.fr/.

For example,  for one week starting January 28th, 2012, you would pay only 490 euros for the entire week split via 6 people so 82 euros each. You can calculate the rates for the current year by using the price sheet on the left hand menu – just take the right hand column (4P8) prices x 70% to get the owner’s rental price per week for a 6-8 person chalet.

Running charges :

Tax foncier is currently 400€ per year

Coproprieté charges are currently 285€ per year.

Note - A large amount of renovation has been budgeted and is being executed between 2011 and 2012.  This includes a total refresh of the wooden facades, swimming pool maintenance, snow clearing lines on the roofs etc.  As these costs have been voted already, they will be paid for by the current owners.