Leaseback schemes are a great way to invest in property. They offer a minimum of risk, provide a steady guaranteed rental income with no management hassles, and give you the added benefit of a place abroad that you get to use for a number of weeks each year.

Now TheMoveChannel.com has a new leaseback property investment section that makes it even easier to select from an increasingly large range of properties.

With entry prices for the least expensive leaseback properties starting at around £35,000 and mortgage funding normally available for up to 80% of the purchase price, it doesn’t take a mathematician to work out that this is a type of investment that is within reach of a large number of people that would otherwise be priced out of the UK buy to let market.

How leaseback works

Leaseback schemes allow you to buy a holiday home or investment property and then lease it back to the developer or a holiday rentals company (generally for 9 years), which typically secures you a guaranteed rental income.

At the end of the lease period, the property will be returned to you (as the freehold owner) in a good condition, though there will normally be provision made to renew the lease for another period of time if both parties so wish.

The income will usually be between 3% and 7% of the purchase price. In some cases, contracts may stipulate additional payments, over and above the guaranteed income level, such as a payment calculated according to the building’s occupancy and the size of the individual property.

A major incentive is that you are also eligible for a substantial discount to the market value of the property, which effectively means that you don’t have to pay the 19.6% VAT (or TVA as it is known in France where many of these schemes operate) that normally applies to all new property.

Your own use

At the time of purchase you define how many of each weeks you want to keep for your own use, normally none to six weeks dependant upon each scheme.

There is often some flexibility and you may be able to change your usage pattern from year to year. Some developers also allow you to use your “free” weeks at other resorts they manage, which can be a great bonus.

For more information see the introduction in our leaseback property investment section where you can also search or browse our selection of leaseback developments.