False Beliefs That Scare People Off Properties For Sale Overseas

Brazil PropertyWe all get scared sometimes. For some property investors it is often a deep seated fear of the unknown. Properties for sale overseas in countries like Brazil, for example, are often ignored in favour of something that seems safer closer to home. This leaves many people missing out on the huge capital growth potential.

I recently attended a property event in London and joined in a conversation with some of the guests who were discussing the relative benefits of investing beyond Europe at a time when capital growth on property investment is poor compared to what it once was.

The subject turned to Brazil. A topical subject given that the World Cup is looming close on the horizon and Brazil property prices are rising three times faster than inflation in cities like Sao Paulo.

Yet the conversation wasn’t about all the good things Brazil has to offer. It soon turned to all those difficulties people expect to encounter when they think of investing overseas.

The first fear was the distance. “Oh I just couldn’t contemplate investing in a country so far away. I would need to spend hours on a plane just to get there”, said one of the guests.

I often come across these fears when I talk to anyone about investing in Brazil.

Yet though it might seem to be far away, if you were to take a flight from London to Rio after a quick lunch, the journey would actually see you arrive in Rio just in time for dinner. A flight from Lisbon airport to Rio takes just 6 hours which is about the same amount of flying hours people happily book for a package holiday.

The second fear that arose from the discussion we were having was crime. When people think of Brazil’s cities, the image that often comes up is the favela. People fear that their investment might be overrun by hordes of homeless people waiting to occupy their property.

The reality is different. Brazil’s cities are vast and cultures diverse if not without some risk.

However cities like Natal have some of the cleanest air in the world and while crime is a factor, it is no more a factor than it is in other parts of the world. It is much the same with other cities in Brazil.

There are plenty of horror stories of tourists having their bags snatched while on the beach or being wrestled to the ground by beggars, however is this something property investors should really be worried about?

Far better to concentrate on the potential return on investment. To achieve that you may not need to step on a plane at all.

“Surely it is better”, I said, “to look at Knight Frank’s Global House Price Index which places Brazil in the top 3 countries in the world for rising property prices. 13.7% growth on average in 12 months is the stuff of property investors dreams and not the nightmare you are talking about.”

Mortgage lending has also risen 550% since 2012 which gives some indication of the underlying strength of Brazil’s property market as we look ahead to an investor frenzy ahead of next year’s World Cup. The nightmares then are more likely to be about the performance of some of the national teams.

What is your number one fear when it comes to property investment?

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Kind Regards

Loxley McKenzie
Managing Director

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