Category Archives: Real Estate – Portugal

Citizenship - Portugal, Golden Visa, Investment, Real Estate - Portugal

Golden Visa Numbers 2014 – Stats for Investor Visa

Investor Visa 2014 in Review

Its easy to make a simple and easy short evaluation of what was the Investor Visa Program during 2014. At this moment all institutions are very happy with the course of this program and Investors are welcome to continue to boost Portuguese economy to leverage the capacity of the Government to revitalize our beautiful country.

The Published Numbers are:

2014 – 1526 Investors Approved

2013 – 424 Investors Approved

2012 – 2 Investors Approved

Number of Family Members Approved

2014 – 2395 Family Members

2013 – 494 Family Members

The Total Investment Generated by this Program:

By Acquiring Real Estate:

1.110.702.081,12 Euro (1.110 million euro)

By Capital Transfer:

117.271.745,77 Euro (117 million euro)

The Total Number of Investors per Type of Investment:

1916 Investors choose Real Estate Option  – 95%

103 Investors choose Capital Option – 5%

3 Investors choose to create over 10 Jobs – 0%

Main Nationalities

China: 81%

Brazil: 3%

Russia: 3%

South Africa: 2%

Lebanon: 2%

After seeing the results it is easy to understand that 95% of the Investors choose to purchase Real Estate and elected this option as their preferred, in average they added 1,18 persons to their program which is less than 2 persons per investor and in 1 years the demand for this Golden Visa Program has increased over 350% compared to previous year. The expectation that is 2015 will beat the record of applicants and will reach at least 2000 application successfully approved within one year. The origin of the Investors is clearly dominated by China.

Numbers Overview 2014 Golden Visa Investors Program Portugal

 

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Golden Visa : Invest in Rural Properties with High Income Returns

Since the Golden Visa Program started in Portugal, lots of investors have chosen the option of buying an apartment in Lisbon city center or a Villa around Cascais as their main priorities. However with prices increasing and rental market still focused on Portuguese people which is far away from booming, the return rate of residential properties investments is becoming lower and lower.

This raises the opportunity to find other locations or to diversify the investments into Rural properties. Portugal Rural properties or agriculture properties are at this stage sold with a very big discount and at incredible prices, however is necessary to understand the cost structure of each specific unit to be able to feel confident about this kind of investment. Since Portugal was for many years developing agriculture of subsistence which consists in producing your own food just for living, most of available properties in the market are small fractions of land which do not reveal to be productive and able to generate high income returns.

According to our experience it is very important to choose properties which have already in place plantations over 50 hectares and that costs structure is lean enough to generate high returns. Costs of electricity, water and other products have increased  substantially within the last years and food price is pretty much stable. If you plan to invest in Rural Properties which have a high return we recommend you to choose between the following cultures: Cork Trees, Olive Trees, Vineyards with own Wine Production, Pine Trees or Eucalyptus.  Those are the plantations which offer you a stable and high return that can even reach 20% a year. Since there are very good perspectives of seeing land price increase within the next years, you might be investing in a business that is able to generate over 20% a year within the next 5-10 years.

We have already selected a numerous rural properties with high income returns, in case you would like to visit them feel free to get in contact with us by email or phone.

Portugal Rural Properties at Right Stage for Investment

Portugal Rural Properties at Right Stage for Investment

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Golden Visa, Investment, Real Estate - Portugal

Portugal: Real Estate Prices Rising Fast vs Tourism Industry

Real Estate Market Lisbon - Real Estate Golden Visa - Portugal Investors Program

Yesterday Lisbon was considered a touristic destination able to beat Barcelona within the next 2 years by a leader of a major Low Cost Airline while visiting the country for contract signing. Major low cost airlines are uniting efforts to improve the amount of passengers they bring to Portugal in order to take advantages of huge  discounts on airport taxes. The amount of visitors that landed in the city exceeds 15 million passengers per year. This equals to 1.5 times the Portuguese population and explains why the economy is surrounded by tourism industry all around the country.

With Portugal Investors Program, golden visa ( temporary residence permit for investors ) bringing a lot of Real Estate Investors into the country,  the effect is awaking other investors non related to visa deal to come back to Portugal for Real Estate Investments. With Financial crisis still in place, Banks are unable to lend money for developers com back to their jobs and start building new properties, leaving the market without enough supply for the amount of demand that is arriving every day.

Some Real Estate companies are still not that optimistic because the product they are bringing to market are not attractive for foreign investors and on this I am considering badly located properties, low quality construction properties, old properties not in conditions of usage or properties which have no perspectives of generating income.

Investors are being very rational when approaching Portugal Real Estate market, they are not coming here to fall in love for properties which they might identify themselves with, they mostly choose properties where the foresee price increase within next years and at same time have a good rental income.

For properties which fall into this category the supply is getting less and less every day and I do not foresee any changes on this situation for the next 3-4 years since in order to build a new development might take at least 2 years to complete everything.

The message is clear to those investors out there if you have any intentions of investing in Real Estate in Portugal as soon as you land in Lisbon to choose your property as faster you make money. Prices are starting to rise and we will see and uncontrolled prices going up within the next 2 years, please be prepared to make money while enjoying your Residence Permit Card without living in Portugal and wining the ability to live in any Schengen Country at your wish.

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Citizenship - Portugal, Golden Visa, Real Estate - Portugal

Changes on Visa Fees Prices – Government Update

We would like to take this opportunity to update all Golden Visa / Investors Visa interested candidates that Government have raised the Visa fees prices within the last weeks.

The raise on prices is just an update according to price index calculations and does not modify anything of what have been doing within the past year. For your information the new price list is the following:

Process Analysis Fee: 514,80 € (before used to be 513,75€

Investors Fee to Issue Residence Permit Cards: 5.147,80 € ( before used to be  5.137,50€

Process Analysis Fee for each dependent added into Investors Application: 80.20 € ( before used to be 80,04 Euro)

Renewals fee for each card: 2.573,90€ ( before used to be  2.568,75€)

In the meanwhile government announced that  we have received already 2 thousand million euro foreign investment in Real Estate and  since the beginning of the program over 578 million euro have been from Investors Program. Over 130.000 Properties have been sold to Foreign Investors and 2014 has been seen as a recovery year.  Out of the 962 residence permit already conceded, 788 visas were given to chinese nationals.

In regards to Real Estate the biggest foreign investors are still the British accounting over 800 properties purchased in 2014, Chinese with 550 properties followed by French with 547 properties.

It is expected that price will rise in the next month since some prime areas in Lisbon and Algarve are already out of New Developments.

contemporary-villas-for-sale-in-portugal-minimalist-algarve-villas

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Real Estate Lisbon : What is the reason why we find many unoccupied buildings inside city center?

When visiting Lisbon for the 1st time, lots of Golden Visa Investors query what is the reason behind the fact that several buildings ( Real Estate ) with the best location and where the sqm price is the highest in all Portugal stay unoccupied and totally abandoned?In order to be able to explain that fact to investors, we would like to show a map that was published in 2009 by Lisbon City Hall locating every building in bad conditions and stay unoccupied inside the city. The result is tremendously shocking since it illustrates the fact that are 57.000 buildings in this conditions all over Lisbon.
Map of Lisbon unoccupied buildings in City Center - Golden Visa - Portugal Investor Visa

In areas where sqm price ranges over 4000 Euro, it becomes difficult to understand the reason behind such conditions. It is important to understand that the buildings which are in those conditions are usually centenary buildings which will have to maintain the facade in case of reconstruction and will stay inside with the same division of property and type as the original development. Original development was thought and made more than 100 years ago, however the law restrictions in Portugal forbid the City Hall to change the original design of the building which in most of the cases eradicates the economic interest.

Developing by restoring and old building becomes extremely difficult if the output product to the market is not interesting at all. With time owners of such properties are waiting for conditions to change and for situation to become unsustainable to see if someone has the courage to modify the rules and regulations.

In the meanwhile the buildings are getting destroyed waiting to completely fall apart expecting that one day someone will allow the owners to develop a complete new project.

Another reason which have made several buildings remain is such poor conditions is the fact that lots of tenants with old contracts still remain renting those properties with ridiculous rents (some even under 50 euro / month) which is even less than annual tax the property owners are required to pay to Government. Being unable to change the rent price, only updated by price index (under 2% a year) it does not give an incentive to property owners to maintain in proper conditions the building structure. Those property owners are waiting for buildings to have extremely bad conditions to live in expectancy that tenants will move out so that they can have their assets restored and back into the market with proper rental income.Lisbon Old Buildings - Golden Visa Portugal

Those rental laws were gladly changed 2 years ago and within a period of 5 years is expected to have this problem almost erased. In five to ten years time you will have lots of old properties restored and back into the market in proper conditions, eliminating this fear factor for Golden Visa investors which have hard time to understand why so many old buildings unoccupied or badly maintained are polluting Lisbon global image. Some want to me positive and say this is Lisbon charm, gladly the charm of Lisbon will change to sophisticated in a couple of years.

 

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Citizenship - Portugal, Golden Visa, Investment, Real Estate - Portugal

Portuguese Government expects to collect over 500 million euro investment in Portugal for 2014 – Investor Visa

Vice-Prime Minister of Portugal announced yesterday that he expects to collect over 500 million euro investment for Portugal with Investors Visa in 2014. After a total collection of 306 million euro in 2013, Paulo Portas expects to be able to collect over 500 million which represents an increase of over 60% for 2014.

Investors Visa Program is surpassing the expectations and according to Paulo Portas words, it is a credible and sustainable way to get foreign investment in Portugal and overall results are very positive. This Program is today one of the most important instruments to help Portuguese economy to recover from global crisis.

Investment in Portugal to surpass 500 million euro in 2014 with Investors Visa

Investment in Portugal to surpass 500 million euro in 2014 with Investors Visa

Real Estate Industry has been seen an unexpected recovery with this program which can account with a volume increase of 40% in 2013 for number of transactions processed through this program. Till the end of December 2013 have been accounted a total of 471 Golden Visas | Investor Visas.

This is a clear message of how important this program is for Portuguese Government and how much efforts are being put into this resource of foreign investment.

Real Estate prices are already overseeing an increase due to all positive factors that are surrounding Portuguese economy. Great expectations are still open for the period after IMF intervention in Portugal.

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Investment, Real Estate - Portugal

Real Estate Portugal : Long Term Rentals vs Real Estate Purchase

Real Estate Lisbon - Investment for Golden Visa

Lisbon 25th of April Bridge – Architect Eiffel

It was published today a study that says the amount of Portuguese persons looking for a long term rental is the same as the amount of Portuguese looking to buy their own home. Usually by tradition the demand for home purchase have been always higher then the demand for long term rentals. This is good news for current Property Owners who are looking for to find a tenant for their investments.

According to the study from APEMIP (Associattion for Real Estate Professionals in Portugal) 44% of Property owners take 1-3 month to find a tenant for their properties and 39% from 4-6 month. Remaining 17% take over 6 month to find a proper tenant for their properties.

In regards to demand on rentals, 44,6% Real Estate Professionals claim that demand for rentals increased, 33,9% maintained and 19,6% that decreased the demand in the past month. In general looking at the numbers the current trend is to see a higher number of customers for long term rentals.

For those investors who want to maximize the most the return of their investments by rentals, it is clearly noted that demand for rentals is increasing and the amount of time required to find a tenant is also getting shorter.

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Portugal Golden Visa : How to invest in a Vineyard in Portugal with 500.000 Euro ?

Vineyards Portugal Opportunities Real Estate Golden Visa

If you are a Wine lover and always had a dream of owning your own vineyard and cultivate grapes, investing in a Portuguese vineyard might be the investment you were looking for. In Portugal most of wine production comes out of boutique wine labels and is known for extremely good quality even though market price for wine in Portugal is still very affordable.

With the expertise on wine lasting for several generations, in Portugal is still easy to purchase a vineyard that with a little bit of marketing and export sales, can generate a good return on investment, able to grow at a much faster speed than global economy.

The question is whether you are able to invest 500.000 Euro in a vineyard and still be able to apply for Residence Permit / Citizenship with that investment? The answer is pretty simple, yes you can but most of vineyards business is allocated to a company and not exactly just a piece of property. In order to be able to be granted residence permit with your investment in a Portugal vineyard you need to choose between one of the following options:

Option 1)

Purchase real estate of the vineyard in a value of 500.000 Euro or bigger to your personal name and then purchase the shares / stocks of the vineyard separately. This way you will be able to apply for Residence Permit in Portugal for the fact that you have invested over 500.000 Euro in Real Estate and you still will own the vineyard business in a separate way.

Option 2)

You purchase the shares of the vineyard for the total value over 1 million euro instead of 500.000 Euro, since you are making a capital investment instead of real estate acquisition. Even if the company you are purchasing is itself owner of real estate in total value over 500.000 Euro. Please note that all capital transactions under 1.000.000 Euro will not be able to be considered for Residence Permit application.

It is also common that most of vineyards in good conditions in Portugal will have an asking price over 1.000.000 Euro and this can also make your business easier. Just be aware that when you acquire a company you are also assuming the full debts of the business and therefore is strongly advised that you perform a good due diligence to all company activities.

Vineyards in Portugal is a protected business since its required to have license to explore vineyards, buying a company that holds a license is definitely your best way.  For checking opportunities on Portuguese vineyards please email us with your investment budget.

 

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Golden Visa Real Estate : Short Term Rentals vs Long Term Rentals

When choosing Real Estate as the selected option for Golden Visa application, investors usually tend to choose their real estate options according to the return on investment rate of rentals business. By getting a return of 4% on Long term rentals I would say is a pretty much average investments in terms of Business. Specially if you consider that you can still have your property appreciated on price at a rate higher than 10% a year for Luxury / High Standard Level Quality apartments.

If your property has a planned return on investment over 4% for Portugal economy I would say your rentals business is a very good deal. Luxury properties pay usually 1-3% of Return on Investment in terms of rentals.

When investment option of Real Estate is to optimize the rental income, I often request my customers to define if they prefer to do Short Term Rentals or Long Term Rentals.

Short Terms rentals are usually directed to tourists who come with short stays (average 4 nights) and enjoy the city life. This includes also short stay business trips where people often prefer the privacy, convenience and price of an apartment instead of an hotel room. Specially when they travel with friends on in a group.

Long Term rentals are usually defined as rentals for periods over 6 month and with a fix rental and property fully occupied.

Currently and after evaluating both solutions is clearly understood that Long term rentals business is facing higher risk than Short Term Rentals. Long term tenants usually are Portuguese and due to economy struggling in the past years, several of them are loosing their jobs and not able to keep affording rental price at the end of the month. Short term rentals is 90% tourists from stronger economies who are less affected by world crisis and manage to spend an affordable amount of money for their city experience trip.

How much should you expect in Short term rentals properties? If your property is extremely well located on the right spot for tourists you may expected returns of 7-12% with your rental income. Obviously their is bigger uncertainty since you are not very sure your apartment will have guests.

If you plan to do Short Rentals business in Portugal with your Golden Visa Real Estate Investment, please be aware that your property needs to be fully furnished and equipped, which also allows you to block the calendar dates when you need to come over to Portugal and enjoy your own space.

If Long terms Real Estate is your preferred investment type, properties are most of the time available empty, considering that tenants will be their own furniture. With our current economy stage, short rentals is often the best choice, not only because it has less risk but also because has the best return on investment.

 

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Investor Visa – Which one is the best investment solution ?

To be able to obtain the Investor Visa for Portugal you can choose between 3 options of investment:

a) Invest in Real Estate over 500.000 Euro

b) Capital Investment over 1.000.000 Euro

c) Open a Company with more than 10 permanent employees.

Several investors query which one from this 3 types of investment is their best choice and the answer is quite simple. More than 90% of the 400 Investors that choose to apply for Investors Visa have chosen option a) Invest in Real Estate as their best option. The reason to explain this investment decision are:

1) Capital Investment in a Portuguese Bank like a long term deposit pays very low interest rate. Return on Investment is quite low or often associated to high risk investments. Their is currently no investment in Capital that can be a safe and highly profitable bet in long term analysis.

2) Open a company with more than 10 permanent employees is only a clear option when you really have the intention of having a company with more than 10 employees located in Portugal. If you are thinking about opening a company just to get the residence permit is clearly and most costly solution (time and money) than any other option.

Electing Real Estate as the preferred option between investors becomes quick to explain and analyze, even though real estate can be a quite complex investment depending on what you really plan to apply your money.

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