Today, there are two ways of making a seasonal rental investment in the mountains: buy into an outright purchase or invest in a leaseback property. Although you will be the sole owner of the property in both cases, these two types of transaction each have different advantages. Here our experts reveal the advantages of making a rental investment in a leaseback property.
Seasonal rental investment in a leaseback property
An attractive investment option
An attractive investment optionBuying an apartment in a leaseback property is a profitable rental investment option that combines tax advantages, enjoyment of your purchase and access to services.
Leaseback properties offer fully equipped, furnished properties for rent (on a daily, weekly or monthly basis). Their concept is simple: you buy a property tax-free and can occupy it for several weeks a year in season (maximum of 6 weeks). For the rest of the year, you entrust it to a manager who takes care of property management and collecting rent.On site, leaseback properties also offer a number of upmarket services guaranteeing optimal and personalised comfort during your stay:
- Cleaning and maintenance services;
- Swimming pool;
- Gym, etc.
Leaseback property: what are the advantages of a rental investment?
Investing in a leaseback property offers several advantages:
- Tax advantages: you can claim back VAT, which is 20% of the purchase price, and benefit from significant tax savings;
- High profitability: MGM leaseback achieve an average yield of 4.5%;
- You receive a fixed net rent each month, whether the property is let or not;
- You own a property which is furnished, equipped, decorated and maintained all year round by the residence’s operator;
- You have access to a range of “all-inclusive” or optional services.
Leaseback properties in the mountains: a dynamic and profitable market
A concept that first appeared in the 1970s, leaseback now account for 776,000 beds, of which just over 262,000 are in the mountains. Despite being a relatively recent phenomenon, they have already proven capable of adapting to various tourist destinations, customer demand and a changing clientele.
In the mountains, leaseback properties are among the most dynamic players in the rental sector today. They achieve high occupancy rates and are currently setting occupancy records, at 12 weeks per bed versus 11 weeks per bed for a Holiday Village, 9.5 weeks for estate agent-managed apartments and just 2.5 for a “non-managed” bed.
In the section entitled "The 5 steps to a successful mountain property investment", you can find all the factors that will ensure you buy a valuable asset and make a quality investment. While these two ways of buying a mountain property take the same factors into account, they offer different advantages. Here, we will focus on the option of buying an apartment in a leaseback.
How can I invest in mountain property successfully?
By signing a lease with the operator of a leaseback property you are relieved of the entire rental management process and any concerns associated with it, and you also save the time you would otherwise spend looking after your property. So it is important to choose an experienced manager who can perform all these functions as well as possible, thus guaranteeing the success of your investment.
The operator, a strong link in your investment chainAppointed by the developer when marketing begins, the operator will be in charge of letting out your apartment, maintaining the residence and your property, setting up the services (free and paid-for), but also collecting the rent they have undertaken to pay you. The success of your project therefore depends on choosing a good operator, hence the importance of first checking the reliability, professionalism and skills of your future management company.
We advise you to choose operators who specialise in mountain property, and to first of all find out about their experience, their understanding of the requirements of mountain property construction, and their reputation: a mountain leaseback is not managed in the same way as a nursing home, for example.
Builder and operator, the ideal combination
The best guarantee for your investment is to have just one point of contact for construction and rental management. On top of their job as a builder, some property groups like MGM have chosen to market and operate their own residences, making them ideal partners for your project.
When you opt for this type of company, you can be sure of being in touch with the same contact, from apartment purchase to residence management. The manager has a thorough knowledge of the properties, an extra guarantee of trustworthiness. This is an ideal way to ensure that your seasonal rental investment will be a success.
Location, a key factor for success
Mountain tourism has changed in recent years. Nowadays, people come to the mountains not only to ski, but also to unwind, recharge their batteries, get a breath of fresh air and take a break from the routine.Choosing the right location for your residence is therefore crucial to your investment, and will directly affect the attractiveness of the property. Above all, we recommend finding information about the resort’s snow record, as well as its reputation with holidaymakers and families, and its ability to satisfy as many tourists as possible.
While the resort’s location is crucial, it is also important to choose a residence situated near the ski slopes and/or resort services in order to further optimise your rental property purchase.
Access to services and facilities
Mountain holidaymakers are no longer just skiing enthusiasts, but seek maximum comfort and a wide variety of activities to enjoy. A well-equipped residence is therefore better able to meet these new expectations.
Our leaseback properties offer many services, benefits and activities, be they basic services (personal welcome, reception, catering, cleaning, laundry) or additional benefits: childcare equipment, board games, games console, newspapers, bakery, caterer, grocery deliveries, reservation of ski passes, skiing equipment hire, Wi-Fi, loan of raclette machines, etc.
Wellness areas for rest and recuperation
MGM residences can also offer a sauna, hammam, swimming pool and fitness/bodybuilding rooms. As an experienced developer and operator, MGM designs the relaxation areas in its residences as soon as work begins, which is a serious advantage in terms of configuration and comfort.
Thanks to these many advantages, investing in rental property via an MGM leaseback is a real “pleasure purchase”.
Find our expert advice online to ensure a successful mountain apartment purchase and benefit from the tax advantages that come with your rental investment.