Turnkey Rentals in Fortaleza Brazil–What Would a Contrarian Investor Do and Why Would They Do It?
In the past few years, international real estate had grown in tandem with the growth of the tourism market. As more people began exploring remote locations, the demand for rental real estate skyrocketed, and places like Cyprus, Vanuatu, and Brazil saw real estate prices rise. With the Coronavirus pandemic, though, global travel receipts have fallen by as much as 57%–amounting to a loss of almost 80 billion dollars around the world. That’s not surprising though–if you’re forced into your home, and people are dying by the thousands, there’s little reason to travel around the world. However, what interests me is the opportunity to buy up real estate at a time when most buyers have chosen to jump ship–particularly in Fortaleza, Brazil.
For anyone keeping up with global news, the international real estate market has become an increasingly unreliable investment. In particular, Brazil is facing a lot of flak for the president’s failure to clamp down on the pandemic. While the justification provided by the Brazilian government speaks of the need to continue with economic activities and keeping Brazil afloat, property prices have fallen by as much as 30% as the local investment is driven out. Similarly, property sales have fallen by as much as 38.8% in the first fiscal quarter, and builders are postponing projects because of low demand.
These dynamics have compelled many investors to stay clear of Brazilian real estate markets–no one has the confidence to buy up property in the country. While this is the conventional response–it’s also a response I would expect market followers and the flock to take. On the other hand, the contrarian investor can make a fair bit of money upon entering the market. Now, especially, as more governments move toward opening their economies with social distancing measures in place.
A Contrarian Investor’s Approach to Real Estate
During periods of economic uncertainty, market volatility forces people to leave because they can’t sustain the losses during a depression. Similarly, many people with lower risk appetites are scared out of the market because they can’t have their portfolios burdened by declining assets. This is a panic response to the dynamic of the market where people forget that it’s only a matter of time before the economy rebounds–in Brazil’s case, it’s only a matter of time until they reopen their economy. When that happens–even the slightest increase in the number of people travelling to Brazil will generate major returns.
See, it’s not about the absolute amount of money you can make from your real estate investments–it’s about where the real estate market finds itself after the slump. Think of it like this–if a commodity is valued at $1000 during a slump and reaches a valuation of $1100 in a few days, anyone who bought it at $1500 has made a loss. But for someone who invested $1000, they stand to make a 10% gain on their investment–and something like this is going to happen in Brazil as well. The market may not achieve historical highs immediately, but there’s a good chance that you can make a fair bit of money through your investments if you move in now. By the time we figure out a way to work around the pandemic and coronavirus, the steady progression toward economic recovery will pay-off incrementally–and these increments will be pretty big.
Why Real Estate in Fortaleza Though?
Fortaleza has traditionally been one of the most popular tourist destinations in Brazil. With a vibrant nightlife and welcoming countless people every year, its one of the central hubs for international and local tourists. In recent years, with the construction of a new international airport, several international airlines have also charted routes to the city. While these plans have slowed to a stock-still because of the pandemic–the fact remains that Fortaleza is going to remain as one of the most popular tourist destinations whenever tourism resumes. Even if international tourism won’t thrive for a while–the commitment to resume economic activities as soon as possible might translate into greater local tourist traffic.
These dynamics seem to point toward the fact that buying up real estate in the country might not be a bad idea. Assuming that local tourism in the country resumes, which is possible considering the government’s moves to subsidize the tourism industry–it’s likely that a lot of traffic might go to Fortaleza for its highly developed tourism sector. From what KMPG reports, the government has increased access to cheaper credit lines to businesses in the tourism sector to push along the industry and will continue to support tourism activities. When local tourism starts converging on Fortaleza, the internal demand volumes will help make great returns on any rental property.
How To Get Your Hands on Brazilian Property?
I can understand why someone wouldn’t want to invest in projects currently underway in Brazil, and I will admit that there is some risk to that venture. But why hold back when there are already premium quality lots in Fortaleza ready to be handed over and the projects ready to be built? The people over at Beach Front Offers –a leading real estate development company–have a selection of prime beachfront real estate along the coast of Fortaleza. Just some ways off the main city, these villas are a part of an exclusive, planned beachfront community that is sure to generate major returns for anyone looking to make a substantial amount of money from real estate.
If you’re concerned about the paperwork or how you’ll get the formalities processes, these people will manage all of the documentation and payments. All you have to do is make your payments, and representatives of the developers will arrange for all other details without you having to take extend yourself in the slightest.
My Friends In Brazil Sent These Videos Over
I’ve always been in favour of contrarian investments because the process works. Economic recovery is inevitable, and it’s not like we’ll forever find ourselves mired in an economic recession. Sooner or later, we will devise methods to continue operating economically, and new opportunities will arise that we never knew existed before. These dynamics will also hold for the tourism sector that will inevitably become one of the most thriving sectors in the global and Brazilian economy–it’s only a matter of time.
I hope you got value from reading: Turnkey Rentals in Fortaleza Brazil–What Would a Contrarian Investor Do and Why Would They Do It?
Here are some additional articles on Brazil that I know you will find extremely helpful, enjoy!
About The Author
Mikkel Thorup is the Director at EscapeArtist.com the oldest and largest offshore website in the world and hosts The Expat Money Show podcast. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. Mikkel has spent over 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, legally eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. Follow Mikkel Thorup on Twitter @ThorupMikkel
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