What is a Viager ?

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, such as a 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.
 
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 sell, the rent for the purchaser will be lower as the viager will have aged.

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

Whatever the mortgage question, the answer is BestFrenchMortgage