IL Postcard

The Inside Scoop on Brazil’s Bargain Real Estate

Date: 05/10/2008

Sunday, May 11, 2008

Read more about property in Brazil in International Living Postcards—your daily escape

Hosting the Brazil Beachfront Webinar last week was a first for me.

I’d never participated in a Webinar before...now I’m sold on the idea and don’t know why we haven’t done it before. Here’s how it happened.

A few weeks ago, International Living’s Editorial Director Len Galvin and Pathfinder Executive Director Ronan McMahon got back from a scouting trip to Fortaleza, Brazil. They brought back some amazing stories about beachfront and near-beach properties...all backed by gorgeous photos and great video.

Fortaleza is one of the hottest real estate stories going right now, and time is of the essence. So someone had the brilliant idea to do a Webinar...a sort of online seminar that really is the next best thing to being right in the room with the presenters.

Also, never having been to Brazil myself, hosting the Fortaleza Webinar was an eye-opener for me. I knew it was a property shopper’s dream in many ways, but some of the prices and locations that Len and Ronan discovered were really stunning, especially since I could see many of them in living color...and often in video...during the Webinar itself.

I especially liked the two-bedroom, 70-square-meter ocean-view condos with swimming pool and fitness center for $87,500 near the fishing village of Uruau.

Ronan has discovered that the local government is considering offering 12-year, 100% construction loans for anyone developing boutique hotels of 40 units or less in the Fortaleza area. Brazil’s development bank would provide 50% of the funds, and the other 50% would come from the state of Ceara, where Fortaleza is located.

The proposal includes a two-year grace period on loan payments before the 12-year repayment period begins. And if you pay back the state’s 50% (at no interest!) within five years, the state will refund you 50% of its portion of the loan, for a 25% discount on the total loan.

If this comes to fruition, it will be an amazing opportunity...anyone with beachfront property in the area could essentially develop for free for two years, then pay back only three-quarters of the original loan. And any non-developer with beachfront in the area would be holding something that a developer would be very, very interested in having.

And limiting the offer to boutique hotel developers doing 40 rooms or less is an ideal way for the local government to preserve the low-density beauty of this stretch of Atlantic coast and still encourage the area’s ongoing economic development.

Like I said, this is incredible news if it becomes Brazilian government policy. Ronan assures me that subscribers to his new Real Estate Trend Alert service will know just as soon as he does whether this proposal pans out. And believe me when I tell you that Ronan is most definitely on this case.

Dan Prescher
Publisher, International Living