Buying a Viager

Viager French Property Investment mortgages are available to fund the purchase of a viager property though not all French mortgage lenders offer them. The viager market is very much a small specialist market and Best French Mortgage, with their extensive experience of financing viager property purchases, will negotiate the best terms for your viager mortgage.

A Viager is a French property investment where a property is exchanged for a life annuity. The property is bought in two parts, a “bouquet”, which is a down-payment and a “rente” which is paid from the date of purchase until the seller dies. The actual price of the property is thus unknown until the seller dies.

Usually, the seller stays in the property – this is a viager occupé. A viager libre transaction allows the buyer to take immediate possession of the property, often a property such as a central Paris garage.

The rent is a function of the property value and the age of the seller or, occasionally, sellers. The bouquet, down-payment, is agreed by negotiation.

The rent element is determined by actuarial calculations, not by the health of the individual viager.

This is an investment with an unknown duration, although re-sale is possible.

The yield is unknowable in advance.

Viagers can be an excellent investment but they can be high risk so they make most sense as a speculative part of a large financial portfolio unless they can be acquired as a viager libre. If you would like to discuss the possibilities of obtaining a french viager mortgage please contact us to discuss the project at a very early stage and certainly before you speak to estate agents as the funding of a viager is not always straightforward.
 
Advantages of a viager French property investment.

Viagers often live in desirable locations, such as Paris or the Côte d’Azur, making these properties accessible and affordable.

The initial investment (the bouquet) is low in relation to the property’s open market value. Notaire fees are correspondingly low.

The administration is less complicated than raising a mortgage for a full-price property.

The viager continues to pay maintenance and service charges (excluding taxe foncère).

If the owner is forced to re-sell the viager, the rent to be paid by the subsequent purchaser will be lower as the viager (person) will have aged in the same way as gilts increase in value as interest rates fall.

Disadvantages of a viager French property investment.

The market is small, around 5,000 thousand per year.

The rent is revised annually, not fixed.

The viager can outlive actuarial expectations. The most famous case is that of Jeanne Calment, viager and  André-François Raffarin the purchaser. Raffarin purchased Madame Calment’s apartment when she was 90, in 1965. She went on to become the oldest person on earth, dying in 1997, aged 122. Raffarin died in 1995, by which time he had paid her more than €140,000 rent.

Glossary of viager terms

Bouquet - The down-payment on a viager transaction.

Crédirentier - The person receiving the rent (the viager).

Débirentier - The person paying the rent, the purchaser.

Rente viagère - Rent paid to the viager, monthly, until death.

Valeur venale - Market value of the property if empty.