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Living With Leasebacks

It seems fitting that after experiencing the Venetian Carnival this past weekend, I should make a short excursion to Murano, with a stop in London on the way back to Paris. Ah, the life of a European.

Confused? Let me explain. If you read Monday’s newsletter, then you know that over the weekend Venice came to Paris in the form of a mock carnival made up of an association’s members donning more than 200 hand-made elaborate costumes, riding gondolas and boats on the canal at the Bastille. That was the first leg of my “journey.” (If you missed it, you can have a relook, especially the fab photo, by clicking on /parlerparis/issues/pparis4-4-05.html)

Monday I made a visit to Les Jardins du Marais, the hotel near the Bastille where we have held several conferences and workshops and where we will be hosting the May 20 – 22 Working and Living in France Conference. You might remember it as the “Home Plazza Bastille.”

Over the last few months, the hotel has undergone major renovation to live up to its new four-star rating. The lobby and atrium dining room now exudes a futuristic design using black marble flooring, contemporary Lucite furnishings, sheer drapes expanding the massive windows with ’70s retro globe chandeliers hung in a row over the square tables.

The transformation surprised me…until later that day, it all became clear as crystal.

The “Murano” is just “up the road” on the boulevard between rues Filles du Calvaire and Saintonge (3rd arrondissement) — not the island a short boat’s ride from Venice famous for its hand-blown crystal, but the exclusive new residence hotel that’s all the rage! I had the pleasure of a personal tour of the hotel along with Pascal Fonquernie, Webmaster of http://www.parismarais.com, a new up-and-coming “portal” for Le Marais. (I will soon be contributing to a monthly [free] newsletter for parismarais.com — to subscribe, send an email to [email protected])

Wow is the word! A bit incomplete, but not lacking in spunk…before you even enter the Murano, you are greeted by enormous white plastic planter pots four feet tall ready for trees to be nestled inside. The lobby is white — stark white — with touches of silver. Two clover-shaped silver leather chairs welcome you at the door. Lined up along the corridor are four silver and black Murano-made sculptures that are reminiscent of Fred Flinstone’s pet, Dino. In fact, Fred and his alter ego, George Jetson, is everywhere…from the futuristically shaped chairs, to the black-lit corridors, to the purple, orange and red spotted furry-walled elevator, to the riverbed stone bathroom floors, to the egg-shaped toilets, tubs and wash basins in the suites, to the 130 different kinds of vodka that line the mirrored bar (which, I am told, is the coolest drinking hole in town!).

It’s a must-see — even if it’s not your idea of a Paris “hôtel de charme.” The rooms are lush and plush, with long white shag carpeting, big beds dressed all in white, adorned by Bang & Olufsen sound systems and tooth-shaped silver mini-bars.

It wasn’t all that long ago that the “apartments” in the Murano were for sale under the “Leaseback Scheme” and we watched the renovation turn an old dilapidated 19th-century building into a work of art.

“Leasebacks” are a particular type of property investment available in France…residential properties (usually, but not always apartments) that are grouped together and run as a tourist hotel. The individual apartments are owned by private investors and rented out (leased) to the hotel operator who, in turn, lets them to tourists.

Not every apartment can qualify as a leaseback. In order to be classified as a leaseback property, known as a “Residence de Tourisme,” the project has to comply with a whole series of detailed regulations. Properties that classify as Leasebacks benefit from a number of tax advantages that can make them attractive investment options — for “certain people.”

I say “certain people” because Leasebacks aren’t for “every investor” and this is where the story leads us across another waterway to London.

Yesterday, I took the speedy Eurostar from Gare du Nord to Waterloo Station and back where I spent the day at the Old Glassworks, Covent Garden, home to John Howell and Co., Europe Law, European property attorneys. John is a regular presenter at our conferences, is a bona fide expert on all forms of property investment and speaks often about the Leaseback program to would-be property investors.

I winced when he said quite emphatically, “Leasebacks are for lazy, unsophisticated investor.” He watched the Murano go up, too — he even took photos while it was under construction to show our audiences. Elaborating, he said, “For those who strictly want an investment…maybe. But the exit route is complicated, usage is limited, you’d never want to live in it (it’s just a hotel room), and the capital growth and rental income is lower than an apartment in Paris you own outright. In other words, there are much better alternatives.”

Hot off the press is John’s com

prehensive report on the Leaseback program that is offered free with a subscription of French Property Insider. The site regularly lists Leaseback properties currently on the market (visit /frenchproperty/insider/leasebacks/lb_list.php). You’ll see when you visit the listing, that properties in Paris are hard to come by — most are in resort areas — along the Côte d’Azur or in the Alps.

John’s report gives you the background and history of the program, the ins and outs, ups and downs, pros and cons. Sellers of these properties tend to present only their winning arguments, and there is no doubt, some, but don’t be misled. If you’ve got lots of spare cash lying around and don’t care about enjoying any part of it, then Leasebacks can be the perfect “investment for dummies.”

But if what you want is to have a little piece of France to fill your heart with joy, then simply stay the week in the Murano or the Jardins du Marais or a short-term apartment that parismarais© offers while you search for your own pied-à-terre to call home.

For those of you in Paris, see you next Tuesday at Après Midi.

A la prochaine…

Adrian Leeds
Editor, Parler Paris
[email protected]

P.S. John will be talking at length about the best property investment plans you can make in France at the Working and Living in France Conference May 20 – 22, 2005…along with Yolanda Robins, Property Manager from French Property Insider, who will provide an inside look at what’s hot and what’s not in Paris…plus Claude Nédérovique from http://www.FranceForRent.com and http://www.ParisLuxuryRentals.com who will explain how to make up to a 10% return on the Paris apartment you own and call home. To register and take advantage of the Early Bird discount, visit /frenchproperty/conference/WLIF_PARIS_2005/WLIF_PARIS_2005_home.html

P.P.S. Special thanks to Michael Salone for sending this special message…made on a website called Letter James, you can make your own messages like this one: http://www.letterjames.de Have fun!

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