France is an interesting market - various surveys have recently shown that prices there are still rising and they are in places but there is little doubt, judging from my own postbag, that a lot of Brits are not happy, having bought at less-than-favourable exchange rates and close to the top of the market. French property specialists VEF are saying that Paris and Nice are doing well and that Bordeaux, Lyon, Montpellier and Toulouse offer good growth and letting potential. But, as in the UK, you do need to look at each case individually and see if it stacks up for you rather than taking these surveys too much at face value.
If you are looking for capital growth, one or two clever property speculators have been urging me to say that members should follow the Russians. They're the new money. I've noted from an email from Mark at the Rights Group that they have been buying into parts of Spain, especially Marbella. And Stuart Baldock of the Riviera branch of Property Vision says that they are crowding in there as well. We are
trying to put something together for the IPA newsletter.
I know one or two of you have been using our recommended currency provider who promises to beat any rate offered by any competitor, even 0.60 per cent, and will also make no charges to use the service. I am told today that they also now trade in Brazilian Real which means that Money Corp are no longer the only supplier so you now at least have something to compare Money Corp with.
I wrote about rental guarantees in France Property Alerts yesterday. Of course, they are a universal marketing ploy or rip-off, depending on your viewpoint. Peter at The International Law Partnership writes further, "I agree totally about rental guarantees. Most of them are not worth the paper they are written on. Either the "guarantee" doesn't materialise - after all the guarantee is only as good as the people giving it - or you simply pay too much for your property and get your own money back as the "rental". I note that you get developers give you abuse when you tell people that in most cases the "rental" is just your own money back. I thought it might amuse you to hear of an example that I saw at a property exhibition a couple of years ago."
"I saw a developer selling property (I can't remember who or where, but that is not relevant for the purpose of the story) selling off plan properties with the possibility of guaranteed rentals. Basically they were flexible and if you didn't want the guaranteed rental then you didn't have to take it. All seemed very helpful. The interesting thing was that they had two price lists - one for where you took the guaranteed rental option and one where you did not. It didn't take a mathematical genius to see that the prices of the guaranteed rental option were higher than the ones without - by exactly the same amount of the guaranteed rental that you would get back over the three years that the guarantee was in place!"
"So in essence you paid more for the property and you got your own money back in instalments. Not only did the developer have use of your money but he also kept any interest on it. Seemed like a great little earner for the developer yet people were still falling for it even when it was set out so blatantly. In other cases I have heard buyers ask how much they could buy the property for if they didn't want a guaranteed rental and have instantly been given discounts equivalent to the rental income." Thank you, Peter, that's a perfect summing up of rental guarantees!
Iain Maitland
International Property Alerts
The International Law Partnership LLP
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