PORTUGAL REAL ESTATE: INVESTING FOR YIELDS AND MANAGING INVESTMENTS

Transcription

1 PORTUGAL REAL ESTATE: INVESTING FOR YIELDS AND MANAGING INVESTMENTS LIO CONFERENCE CARVOEIRO, ALGARVE, PORTUGAL

2 Crisis and opportunity, property rebounds 1. USD consistently high levels against the Euro, around 0.90 (90 cents), and has been trading in the cent range since Jan USD at historically high rates against the Pound (70-78p+) due to Brexit and a hung parliament. UK buyers now selling to receive proceeds in GBP. As the Pound has fallen, UK sellers are able to discount the Euro price, creating a great opportunity, especially with sellers who bought pre-2008 financial crisis 3. Market most active since Transaction times low. Prices rising. 1. French are fleeing taxes, social unrest and terrorist threat 2. UK buyers worried about Brexit back in the market 3. Scandinavians seek sunshine, friendly people and low tax 4. Brazilians seek safe currency haven with cultural/language links

3 Purchasing for rental yields 1. Historical yields in Portugal are typically 2-4% gross/pre-tax 2. Most rental properties operate at high values in the short summer months and are then left empty in the winter 3. Looking for alternative methods of property management can increase yields: 1. Winter rents 2. NHR client base 3. Year-long rentals 4. Winter + summer combination 4. Rental yields can be increased to 5-8% 5. Best yields typically in the purchase price range below 200,000, but premium prices especially for summer rental properties may be a good strategy 6. Local lodging legislation and increase in rental properties and sites, means that competition is fierce. Working with experts in rental marketing is now advisable

4 Property and rental management 1. Property management companies tend to be local and deal with: cleaning, client arrivals/departure, key holding, maintenance, sometimes paying bills etc 2. Rental management is often done directly by owners via rental sites or by larger companies who generate bookings. These tend to focus on short-term rentals 3. Larger firms have both rental and property management 4. Most firms work on a fixed-fee plus commission basis 5. Algarve Senior Living operates a hybrid property management model Established for existing investors and clients and expanded to owners of long-term rental properties who need a greater level of service and returns Rental management via usual sites + individual web site per property + soon to be group long-term rental site Full-service model from property licencing to post-stay accounting-reporting using combination of own team (coordination), local third-party services (cleaning, arrivals/departures, maintenance) and specialised support via network (NHR, accounting, AL)

5 Example rental strategy

6 Example of personalized site

7 Additional services ADDITIONAL SERVICES Telecommunications Licencing ( Alojamento Local ) AL equipment installation Management services Invoicing and annual accounting Non Habitual Resident status application Fiscal representation Home equipment insurance (emergency electrical and gas equipment repairs, annual check, lock repairs, spare parts extra) Buildings, content and liability insurance CONTENTS AND APPROXIMATE PRICE* Obtain best priced package for cable TV and internet, coordinate sign-up and coordinate installation. from 50 + cost of service Obtain licence, equip property with safety equipment. from 325 per property. ** Incl. fully installed fire extinguisher, blanket, safety kit, fire alarms, and signage. Inspection visit. from 250 per property. Ongoing management and property supervision incl. key holding, airing, repairs management, etc. from 30 p.m. Customer invoicing, reporting to SEF, annual returns. from 400 p.a. VAT reporting (if applicable for t/o > 10K) additional 130 p.a. ** Fiscal number, NHR application. from 400 per application. Compulsory for non-eu citizens, optional for EU citizens. 150 p.a. 250 per couple p.a. 40 coordination fee + cost of service from 80 per annum 99 insurance comparison service (3-4 insurance providers) + cost of insurance * Typical starting values per service, values approximate, may include or exclude local VAT, and subject to change without prior notice. Quotes exclude out of pocket expenses

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12 Current Portuguese investment climate Portugal is getting a lot of good press Tourism is increasing, 8 record-breaking years in a row Prices are going up Cheap deals last weeks, sometimes days Construction has restarted Single-property redevelopment has grown substantially in major tourism hubs. Smart money is on medium-sized (10-25) projects or those with a clear focus (for example, senior independent living or care) If you want a cheap deal, be ready to move quickly SIGN UP FOR OUR INVESTOR MAILING LIST If you want larger deals with good returns, get in early SPEAK TO US ABOUT OFF-MARKET OR EARLY STAGE OPPORTUNITIES

13 For more information Visit us at our booth to find out more! CONTACTS: Luís da Silva UK: PT: