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User Guide to a hassle-free life annuity

Investment advice


Within thirty years, by 2050, the population over the age of 60 will have doubled. At the same time, the  thriving life annuity property market is recording 5% growth year-on-year. This still largely unknown type of property transaction has numerous advantages, both for the vendor and the buyer. User Guide to a hassle-free life annuity.

Selling a property under the life annuity scheme has many advantages: protecting your lifestyle while receiving a capital injection and a monthly payment, no more property taxes or fees to be paid for major works, having access to your money during your lifetime to supplement your income or optimise transfer of your assets. Here are some tips to selling your property with peace of mind:

  • Sell at the right time and the right place: There’s a time for everything, and this saying is particularly applicable to selling a property under life annuity. 74: that’s the age for a profitable sale according to experts in the sector. Selling young, around 60, or older, after 85, is less advantageous. In the first case, you may have difficulty finding a buyer, while in the second you risk selling at a loss. An apartment with style is always preferable to a more modest apartment, which would require work. Lastly, remember that the life annuity market is more active in the Ile-de-France and South regions, in major cities, on the coast and in the mountains… To put it simply, where you can expect to sell on a property and make a profit thanks to the attractive location and the constant rise in property prices.
  • Have a fair sales agreement drawn up: Remember to stipulate in the sales agreement a clause triggering the automatic termination of the sale in the event of default by the buyer. Once the outstanding debt has been recorded by the civil court, and provided that the bad payer is not a trader, craftsman or freelancer having being declared bankrupt, ownership of the property will be returned to you. Likewise, make sure that the initial sales agreement stipulates that, in case the property is sold on before your death, you must approve the new buyer, who remains under an obligation to pay you an annuity under the same conditions as the initial buyer.
  • Seek the advice of expert professionals: This is essential. Not only can our specialists help you set the right price and provide personalised advice after conducting a tailored family and asset analysis, but they can also assist with drafting a solid sales agreement.

Whether you’re looking to invest or to diversify your assets, buying a property under life annuity comes with many advantages: you acquire a property at below market price without needing credit, as the full payment is staggered thanks to the annuity payment which can be paid using interest yielded from other investments... Here are some tips to buying a property under life annuity with peace of mind:

  • Focus your search on luxury properties, in big cities, on the oceanfront or in the mountains: The higher the market value of the occupied property – between €1M and €3M – the greater the occupied value, meaning more profitability. 
  • Have the property valued by a notary or solicitor: Make sure when drawing up the sales agreement that you include the division of charges, so as not to end up the sole payer of significant costs for work. The same goes for local taxes. To avoid any dispute, ensure that the party responsible for these taxes is stated in the agreement.
  • Share the burden: Whether buying several small life annuities to diversify your investments and balance the risks associated with the unknown factor of the vendors’ lifespan or investing jointly in a fund that buys properties under occupied life annuity, sharing the investment burden is a smart and profitable strategy.
  • Speak to a specialised estate agency: At BARNES, our experts are on hand to listen to you and provide tailored advice based on your goals: buying one or more properties for yourself, to rent out, to pass down, to invest… Our specialists work alongside expert notaries to draw up fair agreements between the two parties and provide you with the best guarantees.

For more information on life annuity, get in touch with our BARNES Life Annuity team.

© - published on Barnes International on 08/10/2020

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