Recession Buy #4: A Bolt-Hole With Upside In The World’s Number-One Tourist Destination
April 10, 2009
Houston, Texas
PLUS:
- Best Buy-to-let Opportunity In The Algarve…
AND:
- Isn’t Cape Town Unsafe?…
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Dear Overseas Opportunity Letter Reader,
Economies worldwide may be melting down, but people are still coming to visit France.
National Tourist Board figures for 2008, just published, show that this country has maintained its position as the world’s number-one tourist destination. Figures were down a bit from record-breaking 2007 but still ahead of every other country on earth.
More and more of these France holiday-makers are seeking out self-catering accommodation in complexes offering full visitor facilities and amenities. As belts tighten, people choose rentals over hotels.
Village Center, one of the leading European operators of tourism complexes, is launching a new leaseback project on the beach on the French island of Corsica, at the foot of the village of Castellare di Casinca, 30 kilometers south of Bastia…the perfect kind of place to house its share of the 70-million-plus visitors this country hosts every year.
I’ve written to you in the past about the French leaseback. In short, when you invest in a French leaseback property, you agree to lease the unit back to the management company for a specified period (typically nine years) in exchange for a guaranteed yield from rental during that period.
You own in France free of management hassle and headache. The management company handles everything from advertising and promotion to meeting renters upon arrival…from keeping the contents inventory to processing payments…from between-rental cleanings to changing the light bulbs…
Speaking as an investor landlord with experience in many countries, I can tell you that this kind of arrangement has its appeals.
The downside is restricted personal use. With some leasebacks, you don’t get any.
This Domaine d’Anghione leaseback, however, features up to 12 weeks personal use per year (anytime of year other than July or August), at a cost of only 50 euro per week.
Typically, I recommend the French leaseback if you’re certain this country figures into your long-term retirement plans. It’s typically not, though, a way to arrange a holiday base in France, again, because of the very limited allowance for owner use.
That’s one reason I bring this new leaseback opportunity to your attention today. Twelve weeks personal use per year, from year one of ownership…without any reduction to your rental yield!
I also like this leaseback buy for its location. Corsica is a paradise island in the Med. And the Domaine d’Anghione is being developed at the center of 40 hectares of wooded grounds. It will be an ideal Continental bolt-hole, a beautiful, comfortable place to escape the world.
Finally, I want you to know about this leaseback because of its price…and its yield. The 25 one-bedroom houses, currently under renovation (this isn’t a new leaseback project but a rehab of an existing property), will sell for 119,500 euro, including furnishings.
The net annual rental yield will be 6,309 euro. That works out to 5.28% a year for the nine years of the leaseback contract.
French mortgage interest rates are at a historic low. And, yes, foreigners can finance locally. I’ve done it. It’s relatively painless. We recommend France Home Finance.
This is a low-cost-of-entry investment that buys you a respectable yield for the next nine years and three months a year of French island living.
This is one of the most interesting French leaseback offerings I’ve found in 20 years of tracking them.
Kathleen Peddicord
P.S. Thanks to Village Center’s “Nomad Card,” owners at Domaine d’Anghione enjoy not only up to 12 weeks use of their own property every year…but access, as well, to all other properties in Village Center’s catalogue, including properties in Provence, Languedoc, Brittany, and Normandy…
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TODAY:
“The current financial climate can make the idea of investing in a second home overseas seem riskier than ever,” writes new Portugal Correspondent John Lamerton (www.ilovealgarve.net.)
“But, the truth is, some kinds of buys in some markets make more sense now than they have in a long time.
“The Algarve is one of those markets, and a holiday rental is the buy.
“One of Europe’s sunniest spots, the Algarve is, as a result, also one of the most popular holiday destinations on the Continent and therefore a top choice for a buy-to-let investment. And, as throughout Europe, the climate very much favors the buyer right now.
“One place in particular to shop is the resort area around Albufeira, which attracts holidaymakers year-round, thanks to its climate. Best city choice is Faro, home to the Algarve’s airport. UK budget airlines fly here for super-duper discounted rates.”
We told you earlier this week about one of the best current buy-to-let-in-the-Algarve opportunities we know, in the permanently popular Praia da Luz. As Euro-Correspondent Luis da Silva explained: ” This is an opportunity to invest in recently refurbished and revenue-generating holiday apartments with a strong history of rental income“…
MAILBAG:
“My wife Patty and I are currently living in Santiago, Chile. We lived here as an experiment for one year, before returning to the U.S. a year ago. The experiment was to discover if we would like retiring and living here full-time. We came away with a positive experience, so we are back.
“We have friends here, a retired South African couple from Cape Town. One of their children, a daughter, is still living there, although they have tried to convince her to leave. They say that crime, including murder, is serious and widespread in this city. People go around armed to protect themselves. Further, they report that utility services are not reliable there. They just returned from a trip to Cape Town two weeks ago.
“Yet you have a writer who just wrote glowing things about Cape Town.
“Who is right?”
— George B., Chile
New South Africa Correspondent Susan Vial replies:
“The short answer is that both are right. Like any major city, Cape Town is not without its problems. You might not go into certain areas of New York City at night on your own. The same is true here. It comes down to common sense and being aware.
“The infrastructure is sound, and services are excellent. Past electricity supply problems have been resolved, and development is going on everywhere.
“I’ve lived in South Africa for over 30 years, in all the main cities, and Cape Town holds a special place in my heart. But don’t take my word for it. Come and see for yourself. At the very least, you’ll have a wonderful holiday.”
