French Leaseback Property

When it comes to offering a real estate property for rental you will find a number of options. A very popular option is that of a guaranteed property rental. A guaranteed rental scheme is a relatively new concept, where a landlord enters an agreement, with a rental property management, firm, which offers a fixed guaranteed rental on a regular basis. The fixed guaranteed rental, which is offered to you, depends upon a number of factors, such as location of the property, condition of the property, extent of use etc.

The French Leaseback Property option is a very important option in the long list of guaranteed rental options. Introduced by the French Government as loue meuble non-professionel, or LMNP, the French lease option, has become quite popular for those seeking a guaranteed rental option.

If you are a rental property holder, with lack of time and seek to avail a guaranteed rental scheme for your property, then French Leaseback property option may just be the right thing to do. The procedure is rather simple.

First, an investor of rental properties, purchases a property. He/she then offers it as “Lease back” to a property management company for a predetermined time period, which is usually around ten years. However, this term can be increased as well. The property management firm offers to pay the owner of the rental property, a fixed guaranteed annual amount, which is usually between two to six percent of the value of the property.

This amount can be paid in different modes and the amount of payment depends on many factors, such as location of the property, condition of the property, extent of usage of the property etc. Now, the property management firm rents the property on its behalf and collects the rentals there from; out of which, it pays the guaranteed amount to the owner of the rental property. The rest is profit for the firm.

This way, the property management firm earns a few bucks, whereas the owner of the rental property is saved from the efforts of finding a tenant, as well as from the risks associated with it.

French leaseback property agreements have a number of advantages. As it is, you get tax benefits on it as well. However, despite all its advantages, a very sad aspect is the presence of fraudulent property management firms. It would therefore be in your best interest, to check the credentials of the property management firm, to avoid falling into a trap.

You can always check the credentials of the firm, by way of internet, from your own friends and relatives etc. The best way, would be however, to get a list of existing clients of the property management firm and contact these clients. Check out, how much they are satisfied with the services of the firm.