Mr & Mrs Spicer purchased a 3 room Cottage in the Le Domaine Du Lac De l'Ailette. They required a self-financing Investment Property to maximise Capital appreciation over the next 18 years.
| Purchase Price (excluding Vat @19.6%) |
|
€185'631 |
| Total Deposit placed |
|
€ 75'000 |
| Amount Financed |
|
€110'631 |
Mortgage Details
A Euro mortgage was taken out on a 3.6% Variable rate repayment mortgage over 18 years.
Financial Breakdown
| Yearly Mortgage payments |
|
€8360 |
| Yearly Rental Income |
|
€8353 |
| Amount of contribution by Investor in year 1 |
|
€6.60 |
Due to the income being indexed linked the amount of income will continue to increase throughout the entire ownership of the above property
| Year 1 |
-€6.60 |
Year 7 |
+€1044 |
Year 2
|
+€160 |
Year 8 |
+€1236 |
| Year 3 |
+€330 |
Year 9 |
+€1428 |
| Year 4 |
+€756 |
Year 10 |
+€1620 |
| Year 5 |
+€684 |
Year 15 |
+€2664 |
| Year 6 |
+€864 |
Year 18 |
+€3336 |
In year 19 the Mortgage is complete, resulting in a net income of €11928, which continues to be indexed linked, e.g. in year 25 the yearly income increases to €13436.
Capital Appreciation
It is also important to note during the term of ownership capital appreciation will likely take place. We always apply a very conservative capital percentage increase of 5% per annum, but of course, both France and Spain have seen double figure increases in recent years.
Property Value
| Year 1 |
€ 185'631 |
Year15 |
€ 367'537 |
| Year 5 |
€ 225'635 |
Year 20 |
€ 469'080 |
| Year 10 |
€ 287'975 |
Year 25 |
€ 589'678 |
Taken into consideration the contribution in year 1, deposit placed and capital growth the net potential return for Mr & Mrs Spicer over 18years is €378'855
Income Tax The Income from the property is liable to French income tax (25%). In most cases an individual's liability is reduced to single figures if not zero. Please seek independent advice. |
