Investment Factors

Professional investors have started to consider Brazil as one of the best parts of the world to invest money buying properties.

Brazilian topography is diverse, including hills, mountains, plains, highlands, scrublands, savannas, rainforests, and a long coastal strip. The extensive low-lying Amazon Rainforest covers most of Brazil’s terrain in the North, whereas small hills and low mountains spread in the South. Along the Atlantic coast there are several mountain ranges, at the top altitude of roughly 2,900 meters (9,500 ft). There are more than 8000 kilometres of beautiful beaches, palm trees and plantations, thanks to the fertility of the land. Just to put you in the picture, NASA demonstrated that the North-East of Brazil has got the second cleanest air in the planet (after the Antarctica).

With the growth in economy and the development in the tourist sector, Brazil is becoming a gold mine for property investors.
The economy in Brazil has improved hugely during the past few years, which is one of the reasons why property investors have focused there, Brazil being a viable property investment option. International press is also helping encouraging different kind of investments and constantly promoting the country.

Why Invest in Brazil?
Not only for the well known benefits of the country, but also because returns on investment are excellent, investor have realized of the potential of these country. Some of the reasons to underline the investment in this part of the world could be:

The sun shines all year round
Brazilian people are always friendly and cheerful. Smiles go a long way. Cities in Brazil are vibrant and exciting with carnivals and music
Currency exceptionally favourable at the moment making it cheap for foreigners to invest / buy property
Brazil is now self sufficient in Oil
Some areas in the North East of Brazil have seen capital appreciation of over 20% per year
Brazil is considered a low risk in respect of War, Terrorism and natural disasters
President Lula has brought huge hope and improvement to Brazil, Inflation is at an all time low
Leading financial experts say Brazil will be one of the future economic leaders along with Russia, India and China (BRIC’s).
Cost of living can be as low as 30% of the cost in the UK/Europe
Beautiful Country with fantastic scenery and beaches
Foreign investment encouraged, you own 100% of land and property

Property investments have always been highly lucrative and we have to consider the fact that Brazil is now growing socially and economically, being the new target of professional investors. These professional investors know that Brazil is becoming a new leader in the field of emerging markets, so the potential returns on investment profits are thought to be excellent as Brazil offers a stable and fresh new investment market.

Risks Assessment
The highest return on investment ratio involves selling the property prior to completion as the capital invested is much smaller, however the risk is also higher as the investor is relying on finding a buyer for the property within a short amount of time.

To determine the correct purchase, the investor should take into consideration all and any factors which will influence the demand for property within the timeframe that their strategy dictates, to be able to assess the risk associated with the development they are considering. Key factors to consider is the increase or decrease of permanent and temporary residents in the area as well as the increasing or decreasing amount of tourists visiting the region. Local infrastructure, facilities available on site and increase of employment opportunities in the region will also dictate how easily the property will be resold or rented in the interim. As always with real estate investments, holding on until the perfect time to sell is an absolute necessity.

Return
Capital appreciation in Brazil, in the Natal region in particular is in constant fluctuation with most experts referring to an average of 25% per annum. Generally, developers sell the initial units in their developments at undervalued prices to generate cash flow to finance the remainder of the development. Once a certain number of sales has been achieved, the prices for the remaining units are increased substantially. This is one of the main reasons that early investors are able to achieve maximum return on their investments.

Financing
Although mortgages are currently unavailable in Brazil, recent papers issued by leading financial consultant companies indicate that mortgages may be closer than originally assumed. Other options of financing include releasing equity from other properties, either in the investors country of residence or other investments in the investor’s portfolio.

If, as recently reported, mortgages in Brazil do soon become available, investors will see the demand for the country increase drastically, rewarding them for their insight.

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