brazil property and the difference between private and institutional property investors
News Posted On: 23 November 2009
I just read an article on property investment in Brazil on the Move Channel website and it is a bit unfair to be honest.
In it, Catherine Deshayes writes: "many property sales agents entice investor clients with excellent photography of the classic Rio de Janeiro postcard shots - Sugarloaf Mountain and Ipanema Beach etc, but are promoting beach condos in the North East of Brazil!"
It then goes on to say that beach-front condos in the North East as great holiday home investments over the long-term, emphasising beachfront, and says that this is especially true now that three North East cities have been included as host cities for the World Cup in 2014, before saying:
"But that is not where the current property boom in Brazil is. The clue was in the statement of where the property shortage is - "FIRST homes"! Social housing is the fastest growing sector in the real estate market in Brazil, followed by property for the growing middle class sectors."
I am not arguing with the statements, in fact I have said the same myself many times, what I am against is the way Move Channel has presented them. If we want to look like that at a market, then you could easily criticise many articles published by the Move Channel themselves. This is because the same is true of many emerging markets, but that does not mean that foreigners cannot make profitable investments from luxury properties in their chosen tourism locations.
Take Asia for example: the demand for affordable housing, and housing for the burgeoning middle classes is where the best investment lies, but people don't want to holiday in a 2 bed semi in the middle of Bangkok, talk about home away from home. Nor do most private investors have the time to market a rental property to resident Thai's. So unless the Move Channel has started marketing to investment funds then Deshayes just alienated most of its clientele.
Private foreign investors and property buyers must find a property in an area where tourism is rising, which has a good length of season and is not completely closed off-season, and choose a well-located property near the airport, the beach and dining options. If they can get a good price on such a property they can easily make a 4-8% rental yield, and enjoy their own holidays for years to come.
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