Knowing which type of asset to invest in has never been harder. At the recent Elite Investor Summit Britain’s best known investment expert Justin Urquhart Stewart put it well when he called this decade ‘the Tiny Teens – low growth, low inflation, low interest rates, low returns – now go and make some money!’
Many people have concluded that the answer is residential buy-to-let property. But George Osborne’s double whammy of reduced tax relief and a 3% stamp duty hike could signal a big reversal for everyone’s favourite retirement plan.
But maybe there’s an alternative buy-to-let model that has become a very attractive alternative.
An independent report from the respected French Institut de L’Epargne Immobiliere et Fonciere (IEIF) has compared the overall returns from Residences de Tourisme (managed buy-to-let apartments) in France with those from other assets such as shares, bonds, gold and cash on deposit. The results make surprising reading. Over a ten year period, the best overall returns, perhaps not surprisingly, come from stocks and shares with an 8% average. But those returns come with a high degree of volatility, averaging 6%, so it’s a roller coaster ride.
On the other hand Residences de Tourisme, like the ski apartments in the Alps that we share with you, have provided an average overall ten year return of 6.8% per year but with much lower volatility of just 1.9%. Bonds have averaged 4.7% with 1.1% volatility while gold has returned 5.5% but with massive volatility of 5.8%.
These results lead the IEIF to classify Residences de Tourisme as ‘dynamic and stable’. Dynamic because of the near 7% returns (a combination of guaranteed rental income and capital growth) and the low volatility (because property prices tend not to move around quickly especially in high demand areas like the Alps, Paris and the South Coast).
So, if you are looking for returns that are almost as good as the stock market but with a fraction of the volatility, you need to take Residences de Tourisme seriously. Not only are they a solid investment over the long term, they will enable you to sleep at night without worrying about a sudden loss in value.
And of course stocks and shares, bonds and gold don’t give you the chance to go skiing as part of the deal…
The latest issue of the acclaimed monthly Wealth Wacth magazine features an article on one of our newer projects in the leaseback portfolio, Le Ruitor in the delightful resort of Sainte Foy in the Tarantaise Valley.
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City authorities in Paris have controversially agreed to allow development of two startling new skyscrapers, already dubbed The Leaning Towers.
The 'Tours Duo' is made up of two buildings of unequal height which lean away gently from each other.
The taller one is 180 metres with 39 floors while the lower building has 27 storeys and measures 122 metres high.
Designed by one of France's leading architects, Jean Nouvel, the towers will be built in the 13th arrondissement, in the south west of the city centre, and are due for completion in 2020, subject to a guarantee of at least 50 percent occupancy.
Such creativity doesn't come cheap - the total budget for the development is thought to be around €500 to €600 million.
The 15th of October saw parts of central France including Burgundy experience the first snow falls of the season as temperatures dropped sharply. According to local reports in Burgundy temperatures haven’t been so low for this time of the year in 40 years.
France is in the middle of a cold snap with the temperature in Dijon having stooped as low as 7C, which according to France 3 has not happened since 1975.
The famous wine region of central France saw its first snow of the 'winter', while there was also snow in the Auvergne region (right) , with the main falls in the départments of Cantal, Haute-Loire and Puy-de-Dôme.
Never mind Walkie Talkies and Shards, Paris will trump Pisa with 2 leaning towers...
Has the ski season started early this year?
Click the image to open the November 2015 edition of Wealth Watch
french lifestyle investments
A combination of rental returns and capital gains contributes to a 6.8% overall return across a 10 year period accroding to IEIF