16/ The management company

There are about 10 major management companies in France that specialise in these types of operations. A number of small companies set themselves up for a particular project, and unless they are part of a larger group, it is better to make serious enquiries into their track record before purchasing a property run by one of these. The reason for this is that if a company promises to pay you a guaranteed rental income, it is unlikely they will be able to do that on the strength of one property alone. They will, in fact, be dividing the rental income obtained through all the properties they manage, which protects them from seasonal fluctuations and protects you as a result.

Since the owner’s interest is the same as the management company’s, which is to rent out the property as much as possible, you can really consider that the lease contract you will be signing with the management company is a kind of “a partnership agreement”.

Some of the most reputed management companies manage several hundred operations and advertise their properties worldwide.

What if the management company goes bankrupt?

You still own your property of course, but you are no longer guaranteed an income. In this case, a syndicate representing the co-owners of the development (of which you are one), will ask other management companies to bid for the position. This would also occur if the company decided to withdraw at the end of the lease term.

The only risk at this stage is that the new rental income could be lower than the one you originally signed up for. There have been some “accidents” in the past, but the implications are so great that management companies are now offering more realistic yields that they know they will be able to honour, so the situation should not arise in the first place.