Intrawest announces the opening of Flaine Montsoleil

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looks very nice. Expensive, though. Why pay all that and have only 16 weeks occupation (and which 16 weeks would that be?). For that kind of price you could buy a place outright.

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the le refuge de golf looks at least as nice and better value

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Far too expensive.

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you could have a chalet in samoens or just aside les carroz for the price of 3 bed apartment so I agree

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and if it's leaseback, presumably you'd have no freedom to design the place your own way and have your own books in the bookcase - it would be like staying in a hotel. No thanks.

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Furniture will be identical from property to property, no individuality.

After all it is free

I must say that the logic, either personal, economic or financial of leaseback escapes me. put the money in the bank and get higher returns, no risk, no charges, and rent an apartment for a few weeks anywhere you fancy.

pam w, I agree with you on leaseback, which is why I bought outright. 19.6% more (VAT) but flexibility to use it when I want and by whom I want. As has been said many times here before, accommodation Friday to Sunday is very difficult to find - I can get in 2 days skiing for little or no time of work. Expensive for 2 days but my OH and I are self employed so time off work is money not earned. Furniture all the same, but do I care what the other apartments look like? I didn't have to spend the time choosing it, buying it, arranging delivery etc. I can rent it out if I wish and the operator will arrange cleaning. Work makes it almost impossible to take time off in Jan/early Feb when the rates are lower so I would otherwise end up paying premium rates anyway. It is almost the only ski in ski out accommodation in Flaine itself and I think the only s/c ski in ski out accommodation. I stayed there last month and it is a million $, which is nearly what I paid!

Have any other SH's bought there? It would be good to hear and meet. I've also thought about the possible advantages of getting together so that issues can be discussed and put to the management - there are bound to be issues over the next few years with charges, maintenance, possible improvements, annoyances etc. The louder our voice the more likely change will happen.

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Chris Mason,

If you want to PM me about the Arc1950 Owners Association we have just set up....you might want to think about doing similar, for exactly the reasons you outline above.

PS Why leaseback? - possibly not so important in Flaine, as it is a mixed village, but in 1950, which is solely an Intrawest village, if all owners were doing the full ownership thing, then whilst admittedly some would rent out, there would still be a very empty village for the majority of the time.

And so the shops and other retail units would be a non starter.

The leaseback, whilst it does restrict our visiting times, does at least prevent the situation that many country villages in this country go ape about - 2nd home owners destroying local economies by only visiting at weekends.

Put simply: No guarantees of punters = no facilities. Leaseback does at least give the area a chance to survive economically, and hence make more money for us longer term.

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JimW, our local resort was making a bit of a fuss about the so-called "closed shutters" problem of owners only being here a few weeks in the year. The very good local apartments and chalets owners association did an excellent survey that showed that wholly owned apartments were occupied just as many weeks as the leasebacks (in part, no doubt, because the leasebacks charge so much rental compared to owners). Since buying our apartment we have spent at least four months of the year here, but we are lucky to be able to do that because we are retired. But other owners we know rent out their apartments as much as they can. I said above that I could see no economic or financial case for leaseback (from the point of view of the owners, that is) but there is even less of a case for owning an apartment which is only occupied for a few weeks each year.

There is an excess of accommodation in many Alpine villages (including Arc 1950 I expect) outside peak holiday times and regardless of the type of ownership, a lot of accommodation will be empty during May, June, part of July and much of the time between September - Christmas.

Can Intrawest get paying customers into their apartments in November, for example? We were here until 2 November last year, with great weather, but generally the period between Toussaint and the opening of the resort just before Christmas is dead, dead, dead. Winter but no skiing. Like Narnia, Winter but no Christmas!

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pam w, our experience has been just that, although we have had a few French visitors for holiday weekends in May (although it poured with rain this year), and November. July and August is always full, and usually part of September. There are quite a few people staying at the residence at weekends though, mainly owners who live closer than we do, and our pool is open each weekend though outside of the main holiday seasons, apart from a maintenance closure which is planned for October/November. we rented out 17 weeks and 3 weekends in 2007, and will have bettered that by the end of 2008. Apart from our own three weeks in the ski season, the apartment was fully occupied from Xmas to April 17th.

pam w,

I think you are right - and no, with the whole Arcs complexes being closed up from May - July and Sept - Dec, it is unlikely to attract many people (the apartments are still available to owners during this period if they want to go for peace and solitude).
We are trying to encourage the marketing department of the village to consider boosting the conference trade - but personally I think the lack of certainty over weather conditions does affect the ability to sell 'downtime' activities for delegates. And without that, it's just another conference hall and accommodation.

I think tho', that Chris' point about (and I paraphrase) "being able to take snap decisions, and long weekends" is the nub - you simply CAN'T do that if you are going to go for high rental occupation - the two views are incompatible. So I guess if your village isn't suffering from the syndrome, then that reason for buying outright does not apply.

But where it does happen, and becomes the predominant buyer type, it will be difficult for a retailer to make a business case to the bank for start up funding for a new concern.
Indeed, without some idea of 'footfall', I wouldn't touch it with a bargepole, either as a retailer or a retail investor. And hence my village environment would inevitably suffer.

Don't get me wrong, I am considering the options at the lease break to switch, and rent out occasionally on my own rather than through the leaseback scheme - but if the leaseback company can match the occupancy rate of Helen Beaumont & Co, and the costs of providing advertising, invoicing, key exchange, cleaning and all the other services contain fixed rather than variable elements, there soon comes a point when their fees are worth far more than the price and hassle factor of doing it yourself. And I will be doing the overall village ambience some good.

Ie: if you are going to rent out and are losing flexibility anyway, why not use a leaseback deal?

Ideally, a village will be able to cater for both the classic ownership model of full occupancy year round (ie natives, or "silver skiers" wink

, or rental properties) mixed with high net worth individuals who may only be there occasionally, but will boost the local economy with their spending patterns while there.

This is easier to do by integrating your "closed shutters" (nice description btw) owners into an existing and proven village: but leaseback is one way of establishing those necessary 'rules' to enable a greenfield site to work.

IIRC either Intrawest or the French authorities, limit the 'classic' ownership to 7% of total properties in order that the development could be classified as Residence Tourisme and benefit from the tax breaks - that seems about right at the moment: it will be interesting to see what happens once the first of the lease break options happen in 6 years time.

You know it makes sense.

Haha,

those prices are ridiculous for flaine!

we have the same view with no building in front - no road in front, for a fith of those prices...........

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A snowHead

I don't lose flexibility though, my own holidays are put on the calendar first, bookings come second, and then we will use any remaining gaps ourselves. I actually enjoy managing things myself, and would be very frustrated to have no say in who stays in my apartment, or perhaps not even get to stay in my own place at all. I can leave personal belongings in our storage room, and treat it as home when I am there, a leaseback would be no different to renting an apartment .

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JimW, I take the points entirely. I have PM'd you re your owners' club.

Helen Beaumont, That's how I hope to organise my apartment, which I have bought jointly with another family to try and maximise occupancy and potential tenants.

norris, I know they are ridiculous but I guess it depends on the value you place on the facilities available on the doorstep. Incidentally, there is no building in front and the south facing apartments look straight across the valley, admittedly with a road in front. I take it you won't be swapping your own place

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Chris Mason, would be nice to have a hot-tub! but I can run a hot bath which is nearly the same Confused

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Having your own place means having your own place, not a clone. With your own books, maps, music, skis, bottles in the cave, etc. I'm still not at all clear what the advantages are of leaseback over putting the money in the bank and spending the interest on renting an apartment now and then, wherever you fancy.

Could some fan of leaseback not put me out of my misery???????????? Past Snowheads contributors on the question of leaseback have mostly been somewhat regretful of their decision (and commendably honest about it, too).

Been sitting on the terrace tonight, watching the sun setting over Mont Blanc and the entire great panorama of mountains we have in front of us. OH's birthday. Couldn't face another "Savoyarde special" (I can manage a maximum of one a fortnight especially after a picnic lunch of Beaufort sandwiches!) so cooked my own, with my own knives, kitchen equipment and pans tailor made by ME for the sort of cooking I like to do. I'm not a big fan of "facilities", actually. We have a chairlift 200m down the blue slope outside the apartment and that's about all the facilities I require, really.

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I use the property and as such Leaseback was a non runner, I do not understand why one would do leaseback. You could get greater returns on deposit. Capital appreciation may go somewhere near to getting a return in the long run, however the capital will not increase as much as an outright purchase as the developer adds on a "little" to guarentee the return for the investor! Does not make sense to me but......

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I too strugle to understand the full attraction of leaseback - however I do understand that there is a guaranteed return (so that's better than owning outright where there is no guarantee you will let your apartment) There is a reduced purchased price (so that too is possibly better than buying a similar property outright), eventually the capital appreciation of the property should make up for the shortfall in the interest earned. For example, if you buy a property for £100,000 with leaseback you get say 4.5% guaranteed for 12 years. So you earn £4500 x 12 which is £54,000. At the end of the 12 years you *may* own the property which *may* then be worth £140,000 (or more or less) so you've been getting 4.5% on your £100,000 plus at the end there's the extra capital in the property. This could therefore be a profit of £90,000. (Some of the capital appreciation is underwritten by the fact that you bought the property cheaper in the first instance (ie with no tax /VAT)).

If you put £100,000 in the bank at 6% interest (no guarantee it will stay at 6% of course) you would only at the end of the 12 years have £72,000. You may also want to deduct the costs of renting your apartments for your 12 skiing holidays during that time, from this amount.

So in a way, for those on a different budget, who may only use an apartment for three or so weeks a season but who one day would like to own an apartment it can be attractive. Holidaying off the interest of money in the bank will never become a material asset.

That said I agree completely that not being able to leave ones own books/kit/stuff would be a big negative and to a degree the concept of owning the *leased back* apartment is stretching the idea of what ownership actually means.

Personally I can see the attraction but I do worry about own stuff issues and not being able to use the apartment when I would want to - although to be honest unless one is totally flexible (retired and wealthy enough to afford the travel costs) I guess there is always some limitation on when you can go out to your apartment. Therefore, to some, it may be acceptable that this limitation is also a part of the lease they have sold back to the developer.

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In my experience the leasebacks are generally for sale at a premium price compared to other places available for outright purchase,often even after the TVA refund.

After all it is free

Leaseback - I'm one of the leaseback owners. I'm doing it as a total investment at this stage albeit if I'm wealthy in the future will not renew a lease at some point.

My guaranteed yield was 5% which after 2 years has indexed to 5.5%, albeit out of this you pay a maintainence charge of about 0.6%. My lease is without useage but I get a varying discount if I want to use it. Its not been bought as a home from home. We've bought it as a buy to let long term investment. its a 3 bed 62 sq metre apartment in an attractive chalet building in oz en oisans in the Alpe d'huez ski domain. so its not large but not a shoebox either. look on www.chaletdesneiges.com for a similar apartment.

Presently slightly mixed feelings as interest rates have increased from the 3% at start thereby increasing term and cost of mortgage and exchange rates have worked against us in terms of the £2k pa we need to transfer across to pay balance of mortgage. that is the investment risk we took when we didn't fix mortgage rate. If things had stayed more constant then the whole mortgage cirtually would be paid by the rent/

The property was purchased for circa 198000euros (lets say £150k for now) inc furniture and we paid across capital at the onset of around £32k (at 1.45 E at the time) in terms of fees and deposit. so assuming this goes for a full 25 year term we will have paid out roughly £82k (without any further rent indexes which will reduce this cost and no interest rate reduction or rise (hopefully not) for a property worth at least £150k before any indexation. that's a fairly simplistic summary but hopefullya legible one.

For the first 2 years the rent paid interest and a small part of capital repayment. Don't think it will do so this year but should cover interest again. You won't find many UK buy to lets that will do that.

So for me its a very long term investment, for at least 11 years. In due course I may treat it as a second home but at present that's not the intention.

Now as anybody who has seen my contributions to chalet and apartments will have seen, I would really like a real place of my own and we came very near this year to commiting to buy a place in Grimentz albeit there an investment pension planning rationale behind that to (actually given present finances prob as well we didn't). The intention would be to increase my skiing from more than one week per annum and to get my family out there as well. The real place of my own probably requires either an immediate promition to equity partnership (is that a pig flying) or a lottery injection (seeing lots of pigs today).

Whether its worth having money in the bank or mortgage only time will tell if property appreciates in the Alps long term or not. At least in some ways we are actually saving -which we wouldn't be otherwise.

So primary rationale is investment and if I'm lucky it may convert to place of my own some time in the future when my kids are teenagers.

Interestingly I asked for occupancy rate of apartment for the year and it was 12 weeks out of 16 week winter season last year

dan100, thanks for that break down - again, sounds OK to me and I can see exactly your logic for doing it this way.

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dan100, thanks for the breakdown. Interesting. I suppose there are so many imponderables, notably interest rates and exchange rates, it's impossible to say how it will go in the longer term. It's certainly a VERY long term investment - you are paying out significant sums for quite a long time with an uncertain pay off. I suppose it depends how the re-sale market in these buy to let places goes, once they start coming on the market. There are a lot about.

We're too old for that long-term an investment! Hope it works out, though. snowHead

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I find this all very interesting. Only since I signed on the dotted line have more things occurred to me. Not mentioned so far are:

Borrow in £ or in €? If in £ then you are exposed to currency fluctuations. I bought at an avarage of about 1.45 and have therefore seen a paper profit. If you borrow in € then the paper profit (or loss) is much less (only on your deposit).

In a block such as Flaine Montsoleil you are at the mercy of the managing agents and their service charges.

French inheritance law is, I believe, very different to UK law. Something about property automatically going to the kids, I think. And I have been told that you need a French will to cover assets in France - maybe it's the same in other countries

Should you get a local lawyer involved? I didn't and relied partly on my limited french and mainly on the English translation, which has no force in law if there is a conflict between the English and French. Having signed, it occurred to me that I would never have bought a house in the UK without a lawyer, so why the heck was I doing so in a foreign country?

And what about the impact of global warming?

With a property in a single resort most people would feel bound to return to the same resort every time. I have been to a dozen or more different resorts but I'm not sure that I will want to do so again, unless I use the rental income (assuming it arises!) to pay for a trip somewhere else.

I did not see myself buying an investment, it was a lifestyle I was buying into. Others have different ideas but I must admit that, as an investment, I am not too sure about it.

At the end of the day you pays your money and takes your chance. In the meantime, I intend to use it as an excuse to do even more skiing ("it's empty this weekend/week so I must go out there to get value for money....")

Chris Mason, is yours outright ownership?

You know it makes sense.

Otherwise you'll just go on seeing the one name:

pam w, of course he had a notaire. I think sometimes people expect the French system to be exactly as the English one. They do not see the notaire as being impartial because they act for both parties.

A snowHead

Chris Mason, Congratulations, no doubt you will enjoy it! Dont worry about global warming, if it exists! You will be lucky up there no doubt, no smugness when you see all the holidayers coming up the mountain to use "your" snow!!!!

This happened two years ago with us, the lift company then limited the number of passes they sold, during this time you could not buy a weekly pass and had to get one every day. You could only buy them at the top of the lift so anyone staying in the resort got first preferences which I thought was a good idea. They looked after those that invested in them (resort).

A snowHead

pam w, Intrawest appointed their own notaire but he was not advising me. I got reams (or so it seemed) of legal bumph, in French and English side by side, and I went through this myself. The reality was that I was not in a position to change anything because it was standardised across the whole development and they weren't going to change anything for me. One matter I did raise was that the agreement said something along the lines of 'the size of the apartment will be x square metres +/- 5%. I queried this and was told that this was standard in all new builds. Imagine: the builders have a 5% leeway when they are putting up the walls! I have measured the apartment now it's complete and it is spot on, not +/- anything.

Yes, I have got outright ownership. My research told me that the concept of long leasehold/freehold does not exist in France. In the UK you can only buy a flat leasehold, the ground which it is over belongs to the freeholder, although many flat owners now own a share of the freehold.

I do have a limited amount of legal training and my job often involves me looking through legal agreements. However, what I know about French property law could be written on a postage stamp (rien!).

Roy Hockley, Flaine sell a whole season pass for the whole Grand Massif area for less than €800 if you buy before mid December. It won't take long to payback the investment and it will ensure skiing throughout the season. I must admit I have never heard of a resort rationing passes.

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Chris Mason, The Christmas period of December 2006 had shocking snow in France, I was in Norway but a friend was in Avoriaz at the time and another was down in Morzine. The family in Avoriaz was able to ski all the week, but the lads in Morzine had to come up to 1800 before they could buy the daily pass. Actually I thought it was a good idea (then again I am biased!) Everyone in the lower lying resorts were trying to head up but if they were not up in time they did not ski in that area.

Chris Mason, Check out that the company will give you a discount on the "season pass" as you are a proprietor! It should be a few hundred euro off! Enjoy and have good use from your purchase! snowHead

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Serre Che has a residnets pass too, but you have to have paid you Taxe d'Habitation and get a form from the Mairie to take to the lift pass office.

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Roy Hockley, Helen Beaumont, Looking again at the ski pass rates, it's even better than I thought. If you look on http://www.flaine.com/en/ski-pass-alps.php the rate is €399 if you buy before 15.12.08 - can this really be correct? And there does not appear to be any resident/owner requirement. It does say that they are 'subject to change' but, hey, that's a good deal when you consider that a 6 day pass is €192. And under 18's season pass is only €199, compared with €150 for 6 days with a cut off at 15 years old. Does anyone have any experience of whether this is really available? Does anyone know if this was actually available last season? I'm tempted to jump in now before they change their minds!!

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Chris Mason, Serre Chevaliers is a simlar weekly price €187 but the season pass is definitely more expensive , about €550 before 1st Dec, although you also get a free summer pass if you buy before 1st Novemebr. Residents pass is not advertised but was just over €400 last winter.

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Considering we have the same lift pass company (CDA), and not to dissimilar sized ski area, a bit of a cheek to charge us more.
Evil or Very Mad

After all it is free

Chris Mason, Stay with us in snowHead

's no doubt there are savings to be made!

Have not bought a season pass for a while but I think it was about €600. About 3 weeks and it pays for itself.

the season pass for the Espace Diamant is the same cost as two weeks, can be bought by anyone pre-season (we always get ours in November). No further discounts for property owners.

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Chris Mason, The concept of co-ownership ( copropriete) is in many ways similar to leaseholds in the UK although many, many differences. It would be inappropriate to hijack this thread to discuss why but I confess that I consider the French system much better. Although the French system is surrounded by legalise and bureaucracy it does seem more equitable to the 'building/flat owners' than the UK leaseholder's exposure to the financial might of major UK institutional freeholders like Grainger Trust.

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Intrawest announces the opening of Flaine Montsoleil

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