BUYING A REVERSION PROPERTY

CONCEPT

Instead of paying the price cash, the buyer only pays a part of it and pays a monthly allowance to the seller as long as he/she lives. After his death, no more allowance is owed. Down payment does not generally exceed one third of the total price, and the amount of the allowance depends on the age of the seller(s).

As all property sales in France, the official act is registered by a notary.

VACANT SALE

The buyer uses the property as in any other sale.

SALE WITH SITTING TENANT

The seller can stay in his property as long as he lives. Sometimes this possibility is restricted to a certain number of years according to an agreement between the seller and the buyer. After the death of the seller, the buyer can use the property and has no more allowance to pay.

Eventually, when the fixed period of use by the seller has come to an end and when the seller is still alive, the buyer can use the property and continues to pay the allowance.

The value of the property is lower than it would be with a vacant property. The discount depends on the age of the seller(s) and on the duration of the use of the property by the seller(s).

GENERAL REMARKS

A property bought via REVERSION can be sold as any other as long as the terms of the original agreement are respected.

The basic investment is low.

It is possible to cancel the payment of the allowance by paying a certain amount of money to the seller or to an insurance company. This amount will be lower and lower because the prospective life of the seller(s) will be shorter and shorter.

If the property is vacant, you can use it or let it. Otherwise, the price is significantly lower and the buyer has practically no maintenance expenses.

Some people buy several reversion properties in association in order to share the expenses and the risks.

The reversion concept allows active people to "get into the real estate market" with a reasonable investment as long as their income is compatible with the payment of the allowance to the seller(s).

© Bonjour Estate 2005