Guide to French Leaseback Properties

  1. Introduction to French Leasebacks
  2. The French Leaseback Market
  3. How Leasebacks Work
  4. Contractual Agreements for Leasebacks
  5. Tax Advantages of Leasebacks
  6. Selling your Leaseback Property

3. How Leasebacks Work

The creation of a résidences de tourisme relies on somewhat unusual ménage à trois - a developer, a commercial operator and an investor.

A property developer constructs the accommodation, on which most of the properties are pre-sold to individual investors, who then enter into a commercial lease (leaseback) with an operator to run it.

The operator (gestionnaire) offers a guaranteed fixed rent to each investor of normally around 4% per annum.

The operator is then expected to make their own return from sub-letting the rooms and facilities to guests.

Investors are also normally allowed use of a flat or villa in the complex (not necessarily their own) for a specific period each year.

Generally, an association of investors (copropriétaires) will be established who are then able to liaise with the operator and pick up any issues that may be of concern.

The résidences de tourisme need to be distinguished from 'villages de vacances', as the former focus on offer serviced accommodation, while the latter is a complete holiday complex owned by the operator.

The operators have a professional association called the Syndicat National des Résidences de Tourisme, although not all operations are members of the association.


Next Page: Contractual Agreements for Leasebacks