Does anyone know anything about property investment in Brazil? I am particularly interested in the north east in a region called Alagoas. The development is nr the sea in the town of Maceio. Prices seem very low. Any input gratefully received!

Ronnie, I live in Brazil, in Recife near Maceio. You should be very careful before you consider investing in property in Brazil. There is a lack of Medium/Long Term financing in this market, although terms of 60/100 months may sometimes be available from developers. This means that your "exit policy" when you wish to re-sell becomes a real problem unless easier financing becomes available to locals. There is no sign of this happening at the moment, and remember also that real interest rates here are the highest in the world - not propitious for investment. They are expected to reduce gradually over the next few months but will remain high. The currency has re-valued considerably against the USD and will have to come down again eventually - another risk!! Brazil remains a volatile market - always has been. I agree with Property Secrets" assessment - too risky at the moment! Hope this helps...

Tim - its great to hear from someone that actually lives in Brazil and very close to Maceio. As such I wonder if can communicate with you by email as well as the forum? I,d love to be able to ask you questions as they occur to me or as I find out more. I take on board what you have said re exit strategy - my first thought for this investment was to flip the contact as its off plan and wont be ready for 2 years. That probably wont be easy then so I wonder if things will change if I hold for 5 years or so. I am told the holiday rental market is good in Maceio (from Brazilians) and that in high season 1 bed apts can rent at £200-£250 per week. As my investment is under £25000 if true that sounded like the yield would be enough to cover my costs and finance charges easily. Although I have reserved in this development (off plan 300 yards from the Jacuita beach)I can have my reservation cheque refunded until I sign the prelim contract mid Dec. So I am not committed yet. I am buying through a trusted uK agent I used whan buying property in Bulgaria. I hope to hear from you soon Thanks a million for replying to my post Ronnie

Hi Ronnie, I am Brazilian and live in London since 3 years. Despite hanving Portuguese as a mother language and possibility to contact local friends to look for opportunities I am not investing in the Brazilian property market. Not that this market does not have potential. Property is cheap there and eventually when interest rates goes down from their double digit figures, more locals will be able to affort. The question is where is Brazil compared with say Poland? If you have invested your 25k in Poland last year as I did you could now have a 300% return over investment (e.g. see MARINA-Warsaw investment). This was possible due to a combination of growth and leaverage (finance at aprox 4%).

Until such potential (growth + inexpensive financing) is available in Brazil, why bother? Cheers, Erico

Thank Erico. I was attracted to the investment because - a - it was off plan so I could spread the 25k over 2 years. Probably only neding to borrow 10k b - I wouldnt dream of it unless it was an agent with which I have a very good relationship c - the agents staff were buying there- with their own money. d- there is I believe a new international aiport planned nearby e - the target holiday maker was Brazilian so no flight problems to put off the target holidaymaker (only internal ones of course) f- at the current local rental market the yield loked good g - the infrastructure is already developed - unlike Bulgaria for example.

So - at the moment its all negatives from the postings and obviously I have to heed this advise. Are there any positives anyone knows of or can colloborate re the airport and rental market? Again many thanks to you all for your replies Ronnie

Ronnie, I lived in Brazil for 5 years. Only bought a property for own use (sold before I left), and would never consider buying anything there for investment, especially if you don't live locally and want to deal with all the hassles. Plus, rental yields always look good in agents' brochures as we all know, reality is mostly very different. Oh, and don't forget Brazil's constant problems with currentcy devaluations, even with potential capital growth you may well lose most of your money. (Of course the same applies to many markets incl. Turkey etc)

I agree with everything detailed. When I arrived in Brazil January 2003 this was just in the run up to presidential elections and at one point in time I think the exchange rate touched 6 Reals to the £. Check what the exchange rate is now and see what you would have lost with your investment had you bought then. Same goes for the dollar. Having said that it was great living at the time!! Also beware of co you are dealing with. You would want to at the very least ensure that the company has a history of international good service. I found many small businesses lets say unpleasant to deal with on many occasions and that was face to face. I think many small businesses struggle to survive in Brazil and this may lead to problems. If I was retiring I would move back there in a "new york minute" with cash sale only and definitely not off plan. The beaches in their brochures are that good and life there was excellent. For investment purposes I bought in Latvia for reasons previously highlighted. Hopefully the profit will help towards early retirement in Brazil!

Not looking good then for me is it! Phil - I do trust the co who is the sales agent as I have purchased from them in Bulgaria and would in fact not use any other co. The developer has a proven track record too. I have no reason to doubt this. Ok - lets turn this subject round then. it would seem that you all agree it will not be a good investment.

My question now then would be what is the market like in macedio for holiday rental. If I was looking at it as a holiday home with rental income to offset costs would it be different. The NE coast looks beautiful from what I have found out and Brazil has a magical ring about it. Does anyone know where the new international airport is planned and how far it will be from Macedio? Thanks again - thiis thread has so far been invaluable in finding out more.

Ronnie, I have read all of the recent e-mails on the subject of Brazil with interest and they all seem to confirm my own thoughts. Regarding having a unit in a beach development near Maceio as a holiday home and using the rental income to offset the cost......well, you are really looking at the local market for rental income from holidaymakers. Despite the fact that the weather in the northeast of Brazil can be good year-round, there are clearly-defined holiday periods in Brazil. These are mainly January, February and the beginning of March and then Easter week, July and Christmas/New Year. At the moment, tourists from the south of Brazil looking for somewhere to go to in the northeast will be more likely to go to Natal, Porto de Galinhas and Fortaleza. Salvador also will always continue to be popular. Maceio is pleasant and, in my opinion, the beaches between Recife and Maceio are the best in Brazil. However, it still lacks infrastructure compared with the other places mentioned. As for a new international airport - that is news to me!! They have recently completed a large new airport here in Recife (approx three hours drive to Maceio) which is the logical first port of call for visitors to the area - and, even so, there is still only one direct regular daily flight to Europe and that is on TAP to Lisbon. There is also a weekly flight on TAM from Recife to Paris. Given all of the risks and other elements involved (volatile economy, highest interest rates in the world, lack of medium-term mortgage funding, no clear exit strategy, lack of accessibility) why not look closer to home for a holiday home e.g. the Silver Coast of Portugal ? This has excellent potential, good climate, is much closer and you have a natural market for rentals in the UK. Hope this helps

quote why not look closer to home for a holiday home e.g. the Silver Coast of Portugal ? This has excellent potential, good climate, is much closer and you have a natural market for rentals in the UK. Cos it costs a lot more thn 25k! But thank you I take your point. I will try and find out more about the planned airport. I was told that the infrastructure was already well advanced. Still wavering though! - Still looking for pluses too if anyone has any!