Viager, part 2
Bummer, I was hoping a few more of you would think yesterday's post was an April Fool's joke (April 1st kind of snuck up on me this year). But it wasn't - even though we didn't end up going with the apartment I mentioned yesterday. The real estate agent we were working with was just being really cagey and not wanting to give us all of the information we requested. He also refused to show us how he calculated the bouquet and the rente, citing via email several different numbers and percentages, none of which added up. And when we asked to meet with him to sit down and really figure it out, he stopped contacting us and then eventually told us someone else had made an offer (even though the ad is still up on their website). This made me pretty cranky since he was taking 20,000€ of the bouquet as his commission, and I figured that for that much money, he should have been able to get us the info we wanted.
So we decided to put the idea on the back-burner for a while, and may eventually end up going a different route, ie with a viager libre. A viager libre requires a bigger sum up front, but gives you the major advantage of being able to live there. So instead of paying rent on our current apartment and then the monthly viager rent, we would only be paying one and it would be going towards acquiring the apartment/house (like a mortgage would). So at least that way if we do end up paying for a long time, it wouldn't be that different than if we were paying rent on a place we didn't own.
The downside of this is that the sum required up front is usually quite large (at least in Paris) and you are unable to take out a loan for it, and two, these types of arrangements are quite rare - viagers libres account for less than 1% of real estate transactions in France according to one site I read.
Besides the viager occupé (the most common) and the viager libre, there are also two other types of viager: sans rente and à terme. Sans rente sounds like what Jennifer said happens in Italy, ie you pay a portion of the home's value up front and then the person gets to live there until they pass away. A viager à terme is one where you pay the bouquet and then you agree to pay the rente for a fixed number of years (say 15yrs), at which point the owner will move out and the home becomes yours.
Just in case anyone is interested in doing a viager, I'll explain a little bit about how we went about it. Since it is a fairly little-known process, we spent a lot of time online doing research and reading advice on forums. There are also a few agences immobilieres who specialize in viagers, so they can also be a good source of information as well. The agency we went originally went with, Rénee Costes, offers viagers both in Paris and elsewhere in France. Prices were obviously lower elsewhere in the country, but we decided to go with Paris, because hey, it's Paris! Even in the midst of the economic crisis, housing prices are still going up every year here, so we figured it was a pretty safe investment. But on the other hand, you can also get a lot more for your money outside of the city....something to keep in mind if you live en province or are looking to invest in a weekend country home for example.
In the next post, I will cover how the viager occupé is calculated, since it is the most common type of viager and there are a couple of different ways you can go about it.