rief Overview Context
Purchase of a property from The French social and economic
a retired homeowner (over 60 environment is strongly favouring
years old) at a highly discounted reversionary property market
price
- People live longer due to
- Vendors release equity from progress in medicine (In 2020,
their properties without selling people aged 60+ will represent
or moving out 25% of the French population, vs.
20% today)
- Vendors willing to receive
additional income to supplement - Pensioner can no longer live on
their pensions their pensions and require an
additional source of income
- Vendors granted a lifetime
annuity 10,000 reversionary transactions
in France each year
Variable discount, according to
- Types of properties: studio
- The age of the vendor flats, apartments, villas and
commercial properties
- The characteristics of the
property - Located in attractive areas:
Paris and close suburbs, the
- The location French Riviera, the Atlantic
coast
When the vendor passes away, the
property reverts to the buyer Types of Reversionary Properties
Tenanted VS Vacant 30% of the tenanted properties
are vacant before the vendor
- Tenanted: Vendor lives in the passes away
premises.
Buyers can then live in the
- Vacant: Vendor lives outside property or rent it out
the property. Buyers can use the
property or rent it out. The vacant property:
Types of payment structure: - The vendor does not live in the
premises
- Lump sum plus monthly annuity.
- The buyer can live in the
- Lump sum, no future annuity to property or rent it out
be paid.
- Minimise risk and maximise
- Monthly annuity only (no return as the rent covers the
lump-sum payment). monthly payments to the vendor
Tenanted or Vacant Property Lump-Sum & Monthly Payments
The tenanted property: Discount to current market value
based on age of the vendor
- More than 95% of all
reversionary investments - The younger the vendor, the
larger the discount (50% discount
- The vendor lives in the if vendor is over 70 years old,
premises until he or she leaves 40% if over 80)
the property to go to a care home Discounted value separated
between lump-sum and monthly
payments Opportunity for the vendor to
limit the payments of the
- 10 to 30% of the property value instalments over a certain period
paid a lump sum the day of the of time (15-20 years)
exchange of contract
- If the vendor dies prior to the
- Outstanding amount is divided term, the buyer will continue the
in monthly instalments based on payments to the vendor's heirs
the life expectancy of the vendor
About the Author:
Farida Vidal
EU Property Portfolio (EUPP) Tel: 084 5226 5093
Email @eupp.co.uk
http://www.eupp.co.uk
Read more articles by:
Farida Vidal
Article Source: www.iSnare.com 
