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Don't
miss the Brazilian real estate boom! Read up on the Brazilian real estate opportunities! High rewards for private capital due to limited availability Brazil's financial institutions are burdened with an enormous debt burden from the past, and both the national bank and the commercial banks have only limited resources to fund investments in the country's industry. Western banks collect cheap money via the savings deposits from the average consumer, and then make them available to the entrepreneurial world. Brazilian banks can not rely on this cheap source of money, and the rich minority has taken over the role of financing industry - and real estate - directly. And obviously, as demand by far outstrips the available supply, the
premium
offered to capital investors is high. Many developers, especially those selling condominiums, offer interesting payment schemes which present a nice opportunity for investors. Many developers allow you to buy apartments off-plan, i.e. before or during construction, when the price is still low, and with down-payments totalling no more than 30-40% of the property price. By the time the property is finished, it will command a higher price - both because of market price increases and the higher appeal of a completely ready house. This means that investors can 'flip around' the property around completion time to an other, 'final' buyer. Doing so, you can pocket a price increase of 15 or 20% - while you have never paid up the full amount. Depending on the downpayment, and speed of construction, profits on these deals can range from 40 to 100% per year! Even if, in a 'worst case' scenario the property can not be sold
immediately on
completion, the balance to be can usually be financed (often by the
developer
himself), typically over 6 years or so. Brazil only applies a 2% transfer tax on real estate property - which
keeps the
transaction costs among the lowest in the world. In the distant
past, the Brazilian currency was artificially linked 1:1 to the US$ - and
most
prices still reflect these old price levels. However, over the past few
years 1$
has stabilized around 3 real. As a result, 100000$ will buy a house While the Brazilian GDP is only some 4000$ per inhabitant, it's social inequality hides a large aflluent class that has a buying power that at least rivals the European and US consumers. In fact, wealth in Brazil is extremely badly distributed. If one applies these ratios to the GDP, the wealthiest 10% (some 16 million consumers, concentrated in the South: Rio, Sao Paulo, Belo Horizonte) have a GDP per capita of at least 20000$ - quite comparable to most of Europe or the US. And in fact, their standard of living is even higher: as the cost of living is much much lower, 20000$ buys a lot more luxury than we can imagine... Moreover, the rich keep getting richer; not surprisingly if you
realise they
have a labour force at their disposal who'se monthly wage is just some
60-70$... Brazil is a
highly catholic, peaceful, democratic culture, quite unlike other
Southamerican
countries. For the past few years, Brazil has been wisely and succesfully using
western
monetary and fiscal policy, and it has mastered the control of inflation
and
currency rate, in spite of astronomic international debts from the past. And what a potential! Just reflect on what makes destinations interesting for
tourism, and you'll realize that Brazil literally has it all - sunshine,
nature,
culture, access, and infrastructure. Brazil also has more than one third of the world's fresh water
reserves - and
that is visible in the thousands of rivers, suitable for bathing or
rafting... All major operators have realised this now, and five-star resorts
like Costa do
Sauipe near Salvador feature resorts by Marriott's, Sofitel Renaissance,
and
Breezes. Tour operators are also massively adding Brazil to their offer; and
an extensive
scheme of charter flights covers Natal, Recife, Fortaleza, Salvador and
many
other destinations. Is it risky?Overseas investments are more risky than investments in your home town - if you do them on your own. On your own, you probably don't have the language skills, you don't understand the culture, economy and politics of the country, you don't know the real market prices, and you don't know the legal system. And it may not be worthwile, to go and supervise your investment property on a regular basis. In contrast with this, we had created by people with the highest skills in geo-marketing; it can fluently communicate with local partners, and has a very deep understanding of real estate investment and developments. It only invests in markets where it can obtain sufficient critical mass so it can work with the most qualified local partners. What kind of projects do you invest in?We generally invest in projects that have a relatively short time horizon and like to free our investors' money up quickly, often 12 to 18 months after the initial investment. Long term capital appreciation and/or rental income are usually very interesting, but we have found that quick rotation of our investments usually delivers higher returns while it limits the exposure of your capital. We sometimes enter projects using the combined assets of several of our investors, so we can negociate better prices and assure that the projects are followed up closely without eating up profits with legal, travel costs etc. How is the tax situation in Brazil?Brazilian authorities are very happy with foreign investment money flowing in, and very little questions are being asked. As long as the money enters Brasil openly via an international bank account they do not care how are where the money was made. Why should I invest with you instead of a local agency?Local agents are paid by the sellers, and will often say or promise anything to get the sales and the commission. Once the sale is closed, they care little or nothing about your investment results. We, however, depends on a long-standing relationship and repeat business with its investors. Working only for you, we can be much more objective and rigid in our selection. And once you have made your investment, we use all our knowhow to make sure you get all the profits you're expecting - because we know that this is exactly what will make you come back. Can you custom-design an investment project for us?In fact, that's what we like best. If you tell us your investment criteria - budget, expected return, time horizon, risk profile, etc., we can help you find the best investment for you. Should you be worried about safety?Brazilians are remarkably peaceful, christian people, and in spite of the huge inequalities between rich and poor they are not a violent people at all. Compare this to most South- or Central American countries and the difference is striking. But obviously, in some of its multi-million mega-cities, there is violence in some areas of town where fights between gangs and police are taking place. And petty crime is common in the top tourist spots like Copacabana in Rio, where the combination of night-life, drunk tourists and prostitutes creates lots of opportunities for pick-pockets. However, in most of the country, especially in the coastal villages and resorts, there is no violence or danger to speak of. Feel free to contact us ! |
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