How Do I Price My French Leaseback?

Sadly, there is no simplistic formula to price a house, apartment or building at a perfect, quick-selling price. This is the same with a French Leaseback. Since most listings get the most attention from property hunters within the first 30 days, it becomes crucial to make your listing as attractive as possible. To do so, we have outlined certain pricing tactics to consider when selling your French Leaseback below:

 

1. Highlighting the property’s features

 

What unique aspects does your French Leaseback have that others do not? Is it a ski-in ski-out chalet? Does it come with its own pool? What about a nice backyard? Once you know what aspects you want to market to your future buyer, it’s time to compare.

 

2. Finding a “Comp”

 

A “comp” is a real estate term used to describe a recent comparable home sale nearby. This means looking for properties in the same area with the same amount of bedrooms, square meters…that have recently been sold. By doing so, you can estimate what a property like yours is selling for. Try doing this with active, sold, and expired listings to have a strong comparative analysis for your property when highlighting the positive features and softening its drawbacks. Ask yourself some of the following questions:

 

  • Why is this property a good comparable? How is it similar to my property? How is it different? In terms of…

    • Location

      • Neighborhood

      • Tourist Attractions

    • Unique Amenities

      • Bedroom(s)/Bathroom(s)

      • Pool

      • Guest House

      • Unique View

    • Age of the Property

      • Vintage or remodel

  • Was your comparable sold in a buyer’s or seller’s market? How are homes selling now?

 

What’s important to understand is that selling a French Leaseback is not like selling a regular house or apartment. A French Leaseback is a form of long term investment. Although it’s important to keep these things in mind, it’s critical to sell your property as an investment, using the properties features and comps to make your investment more desirable. This means that the value of the asset truly depends on the return an investor can get from this investment.

 

The yield used to value the asset will depend on three main things: the rent and, if relevant, the risk of rent decrease during the Leaseback agreement, the tenant, and the location of the French Leaseback. On average, the yield or return on investment (ROI) for a French Leaseback is roughly 4% for a brand new property and 5-9% for a secondhand property.