France is considered the safest country in the world for investing in property - according to US Government; UN and EU law offices.
French property and fiscal laws make owning property in France an extremely safe investment, (with under 0.4% litigation), and is the envy of legal professionals and governments throughout the world, with many countries presently looking into “adopting” the system - including the USA, (with nearly 9% litigation in some areas).
Property and fiscal laws in France also “discourage” outright property speculation and this clearly shows in the very stable, long term increase in property values, without the usual “highs & lows” associated to other property markets throughout the world!
Non-Recourse Mortgages!
- French mortgages are totally NON-RECOURSE!! Each property in France is its own entity; in respect of tax; mortgage and inheritance.
- French mortgages do not affect your credit rating/points in your home country!
- 80% mortgages are 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)
- Loan interest rate between 4.2% and 5.2%
- Interest only mortgages available.
- * NOTE: Mortgages in France are available to private individuals only; not to business entities; trusts or professional property/real estate investors.
Guaranteed Rental Income!
“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% per annum (based on total purchase price) 30% on RISK.
“Guaranteed rental income” is for long-term (3 year contracts) unfurnished properties, (NOT vacation rental), and owners receive the following FOR THE ENTIRE PERIOD YOU RENT OUT YOUR PROPERTY:
- Guaranteed initial rental
- 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.
- Guaranteed cover against rent default, as from first month and for an unlimited period.
- Guaranteed cover against damage to your property by tenant
These guarantees are fully backed by the French Government program “Loi Robien”. Robien’s Law was introduced by the Government to encourage buy-to-let (own-2-invest) rental investment in France!
Maximum Capital Growth!
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 senate/house 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 Nicolas Sarkozy won!! New laws are in and conditions remain favorable for investors!!
Property for buying and renting is in extremely short supply in France and new build start up is very far behind demand. Official figures at the end of 2006 project the housing shortage as over 1,000,000 (1 million!) units. As an example - new build start up in Toulouse for 2007 will be approx. 2,600 units for the year, but 1000 people PER MONTH are moving into the area! French law mandates that only 25% of any building can be sold to investors! The remaining apartments are for owner/occupants only! Rents rose by over 8% due to the tremendous shortage in rental property!
(Source : Chambers of Notaires and Commerce / FNAIM)
Published market values/figures have consistently shown that while development is under construction the capital value of the property increases by approximately 6% per annum over normal capital growth!! This is influenced by the fact that the tax/notaire/legal fees, (“closing costs”), on new build is fixed by law at 2.5%, while on old build it averages 15%. Obviously, maximum profit potential comes from investing in a new-build as early in the construction process as possible when prices are typically a fraction of what they will be when the project is complete and becomes publicly available.
The #1 Investment Opportunity In The World Today!
France has the second largest population in the EU, and is experiencing an unprecedented population boom and is projected to be most populated nation in Western Europe by 2050! France is also experiencing a phenomenal migration from North to South-West. For example; Paris population in 1946 was 2.9 million by the end of 2003 it was 2.125 million.
A summary of an article about the continuing growth of the region published by INSEE, (Ministry of Economy), informs us that the rapid population growth in this area is due to;
- Lowest Death Rate in Europe/West.
- Highest Birth Rate in Europe/West.
- Strong immigration from mostly North European countries.
How do I get started?
According to French Law, in order to acquire all new build properties for investment (income producing/buy-to-let), a person must:
- Attend a meeting or seminar with a French licensed expert.
- Or visit the property/development site first
Danny Silver knows what he is talking about!
