Monday, November 29, 2010
Your retirement or vacation home could make you money here
Dear Reader,
The new middle class in Brazil is growing…and spending their newfound wealth. Brazil is booming. And Brazil’s northeast is growing at a faster rate than the rest of the country.
Drawn by hundreds of miles of beaches, it’s to the northeast coast that Brazil’s new, up-and-coming class comes to vacation and retire. This is good news for the rentals business here. Moreover, this is a great beach base for you if you’re a globetrotter.
Now, imagine your ideal retirement getaway.
Maybe you see the surf of a turquoise sea gently lapping a beautiful sandy beach.
You may simply want to escape the cold winters back home …or perhaps you’re in the market for a new full-time home. Maybe you imagine a life where you travel for six months and spend the other six at your overseas retreat.
Whatever you dream of, that life really can be yours—for much less than you’d imagine. In fact, your retirement escape could actually make you money.
João Pessoa is a place where you can embrace this lifestyle without hurting your bank balance.
João Pessoa is the capital of the state of Paraíba. Surrounded by miles of beautiful beaches, this is where many Brazilians from southern cities come to retire, vacation and buy second homes. It’s one of the safest capital cities in Brazil…with a healthy outdoors lifestyle, centered on the beach and boardwalk. The city is popular as a retirement destination for senior civil servants.
The city has 1,730 acres of forest, providing a green backdrop to almost 25 miles of beach. João Pessoa has some of the nicest city beaches you’ll find anywhere. Moreover, beachfront properties are still affordable… and there’s a line forming of potential renters for your condo, when you’re not there.
While popular with tourists, João Pessoa doesn’t have much choice when it comes to hotels. The four-star Verde Green is the city’s newest and nicest hotel. Not that it has a lot of competition…the other hotels are two- or three-star, and “tired.”
Yet according to my sources on the ground, estimated occupancy rates average 86% year-round. Rack rates in the Verde Green are in the range of $113 to $226 a night. Quality short-term rentals are difficult to find and command $468 per week for a small one- or two-bed unit.
The best place to buy for rental is the prime residential area of Cabo Branco. Development is limited here by the city’s 1,730 acres of protected forest to the back, and the boardwalk to the front. Cabo Branco sits between the ocean and the forest on a thin triangle of land.
You’ll find uncrowded stretches of beach, and the city’s nicest restaurants and boardwalk kiosks here. It’s a favorite with holidaymakers, younger retirees and second-home owners.
Riacho Verde is a small project of 55 units located a block from the beach in Cabo Branco. Unit sizes here range from 592 square feet to 1,431 square feet. Prices start at $146,207. The rental demand for this type of condo is strong. The building will be constructed as a condo building but with hotel-type amenities.
Projects like this sell fast. They are in hot demand. For short-term rentals, the average daily rate could be $73. Based on a 70% occupancy rate, that means $18,650 annually.
Property management fees run around 25%—leaving almost $14,000. Enjoy a couple of months here yourself in the low season and you can still enjoy a healthy yield.
Contact our local broker, John Curtis, here, for more details on Riacho Verde.
Ronan McMahon
P.S. Here’s part of a note John sent me during the week. “I cannot stress enough how strong the rental demand is for units like these…we have a waiting list of companies and individuals looking for accommodation, so much so that I am going to furnish an old apartment I have been trying to sell to rent it out to a company.” My own research concurs with this. Contact John here.
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