7 December 2009
MGM French Properties has launched a range of new leaseback options this month in response to strong demand for French homes in popular Alpine ski destinations, from people seeking greater flexibility in the periods they can occupy.
Previously only two options were available with residence de tourisme apartments sold by MGM. One meant that owners could enjoy four weeks personal use of their property each year (two weeks in winter and two in summer) by agreeing to leaseback the property during an 11-year term for a guaranteed annual rental income.
Alternatively buyers would be entitled to six weeks occupancy during the year by purchasing a French apartment with the price reduced in line with the rental expected to be generated during the leaseback period.
Under the new scheme, owners who choose the ‘lease with rental income’ method of purchase can still opt for four weeks personal use, they can also choose three different weeks or, instead, increase the annual rental income they receive by around €1,000 (£905) by choosing to use the apartment for only two weeks in winter or summer.
Longer periods of occupancy can be achieved by exchanging weeks and choosing to stay during the off-season when the spa and other residence facilities are closed. Typically, on this basis, a purchaser who buys an apartment on a ‘lease with rental income and three weeks personal use’ could actually occupy the property for ten weeks in the year.
This is because the three weeks of personal use – comprising one week in the high season, one in the medium season and one in the low season could be extended to a total of six weeks by swapping the high season week for three low season ones and the medium week for two low ones. In addition, the apartment can be occupied for up to four weeks without charge during the off season periods in spring and autumn.
The terms of the ‘lease with price reduction’ scheme remain unchanged but these owners who buy on this basis also are entitled to exchange weeks and occupy their properties in the off season.
Under all of MGM’s leaseback schemes owners can, if they wish, exchange their entitlements to occupancy for a stay in one the other 15 MGM-built residences de tourisme in the French Alps which are managed by the MGM Group’s management company CGH.
Richard Deans in MGM’s London office said that the new leaseback schemes have been introduced to match more closely the individual needs of owners.
He explained: “Some only wish to stay in the ski season, others prefer summer in the Alps, and investors want to maximise their income. With these new schemes we aim to meet the requirements of all types of buyer.”
Initially the new arrangements will apply only to apartments sold within the four new residences de tourisme announced by MGM in October but they could be extended to embrace others in due course.
The new residences are Le Centaure in Flaine, Le Cristal de l’Alpe in Alpe d’Huez, Les Chalets de Flambeau in Val Cenis and Le Jhana in Tignes.
See Also: Marc Da-Silva (269), FRANCE (39)
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