REASONS TO INVEST
Overseas property as an investment
Investment Property, Growth, Capital and Forecasts.
Projected growth:
Cape Verde and Morocco are enjoying sustainable growth in their economies, tourism and the local housing markets, which will be reflected in unparalleled returns to investors.
Recent reports evidence capital growth in the region of 15% - 20% per annum across both markets with future forecasts in line with 30 – 40% continued growth over the next two years.
Projected returns:
Using apartments for illustrative purposes, based on an initial off plan purchase price of 2250 euros per square meter applying a conservative level of capital appreciation of 17% per annum (for a two year period) on the property value:
SHORT TERM INVESTMENT STRATEGY – Buy to Sell within 24 months Realistic Forecast Return on Investment (ROI) - See example below:
- A unit is reserved with a value of €225,000
- The investor pays a 50% deposit of €112,500 upon signing the purchase contract
- After year one of the investment, capital appreciation is realised at 17% for the year, and the property is now valued at €263,250
- The investor decides to instigate an exit strategy after 24 months, with capital appreciation continuing to perform at 17% per annum, meaning the property is now valued at €308,002
- The investor finds a buyer for the property, at the sale price of €308.002
- Total capital invested €112,500
- Gross Profit €83,002
- Return On Investment - 74% over Investment Period or 37% per annum
MEDIUM TO LONG TERM INVESTMENT STRATEGY – Buy to let and sell after a five year period. Realistic Forecast Return On Investment (ROI).
Please see the example below: *
- A unit is reserved with a value of €225,000
- The investor pays a 50% deposit of €112,500 upon signing the purchase contract.
- After year one of the investment, capital appreciation is realised at 17% for the year, and the property is now valued at €263,250
- With capital appreciation continuing to perform at 17% per annum for year two, the property is now valued at €308,002
- Applying a very conservative level of appreciation of 10% for year three the valuation now stands at €338,802
- For the remaining two years apply applying an average of 5% growth per annum the property is finally valued at €373,529
- In addition to the original investment the investor will be liable for finance payments after the initial 24 month period on completion of the property. However, if the investor decides to rent the unit to tourists, all ongoing costs such as maintenance fees, finance repayments, utility bills and general upkeep will be covered by this rental income.
- Gross Profit on the property after the five year term is €261,029
- Which equates to 232% return on investment or an unparralled 46.4% return per annum
* This is a simple example without taking potential finance arrangements/purchase costs and legal fees into consideration.
