Buying a property for investment has been one of the most profitable and desirable investment types available, it is said 90% of all millionaires made their first million in property. So, whether you are getting involved in the rental income, capital growth or flipping the property, it is those who have carefully done their due dilligence and create a portfolio that will bring a success. However, there are a number of problems with this investment;
Difficulties with lending
We now find ourselves in a position where banks and financial institutions have changed the way they hand over money for property investments.
Deposits are extremely high, in the UK alone the average house price is 20 times the average salary, this makes it nearly impossible to get on the property ladder especially for first time buyers looking to start their property portfolio.
Lack of available properties
The lack of suitable properties that are available for the purpose of investment are getting fewer and fewer and prices are constantly rising for these properties leaving the market short.
Lawyer’s fees, buying costs and deed transfer costs etc. Etc….
These are just four of the problems, and it can really turn us away from an otherwise strong investment. As a result of these problems, the market has welcomed a new type of investment; fractional ownership investment property.
What’s Fractional Ownership Investment Property?
With fractional investments, (An important point to note is fractional ownership is NOT timeshare), we have reduced barriers to entry and a solution to the problems mentioned previously. As a number of unrelated parties come together, the risk is shared, there’s no need for huge deposits, and you can own just a small portion of a property.
With property investment in Cape Verde, for example, some of the most attractive propositions right now are in hotels and resorts. Of course, it would be incredibly expensive and difficult to start a resort on a beautiful island like Cape Verde alone. We would need to buy the land, build the property, contend with the tricky government laws on property development, and then either run the resort or lease it to an experienced provider.
Why do this when we can invest in a portion of a property? This way, we get all the same benefits as owning a property but without the hassle and ongoing expenses.
How Does Fractional Ownership Investment Property Work?
When it comes to Cape Verde property investment, you’ll find a wealth of fantastic opportunities. As tourism continues to boom, the opportunities are growing and also becoming more secure than ever before. Thankfully, we can now invest however much we want depending on our budget. While some will invest in a quarter, others will stick with one-twentieth. We mentioned the reduced barrier to entry, and this is exactly why.
In total, you’ll find dozens of investment levels and some start at just £10,000 for a cash investment. In years gone by, property investment was reserved for the elite. Now, it’s more of an open field and you’re likely to find an investment opportunity that matches your needs.
As can be expected, there are some differences between fractional and standard investments. In terms of ownership, a private limited company structure will purchase the property before you then buy a membership. Depending on who buys what fraction, only a certain number of memberships will be awarded, and this represents your share of the property.
After the investment, all rental revenue is accumulated and shared between members/owners. The larger your share, the larger your revenue. Once the resort is up and running, investors will enjoy capital growth as well as a minimum guaranteed return. For example, some will provide a minimum of 5% in the first year (this increases with each year that passes).
Although there are slight differences when buying property in Cape Verde, this is generally how a fractional ownership investment property works and what you can expect from the experience.
As with any investment, returns are dependent on a number of factors. For example, this includes;
Occupancy rates of the resort
Revenues from tour operators
The overall performance of tourism in Cape Verde
With this last one in particular, we’re in a positive market right now because tourism numbers continue to rise. In the first quarter of 2019, tourism grew by 8.5%, and it’s expected to remain on this path for some time to come. In terms of actual numbers, this meant an extra 18,000 people visiting hotels and resorts in January, February, and March compared to the same period in 2018.
Once you also consider the fact that development is being limited and controlled by the government, demand should continue to outweigh supply which means that any investment you make is well placed.
Aside from this, we also can’t ignore the beauty of Cape Verde as a destination. Who doesn’t want to get away from the stress of the world and spend some time on a beautiful beach? As demand grows, more tour operators fly to the islands and this is great news for investors. The ultimate goal? Some experts say that Cape Verde has the potential to join the Canary Islands and the Caribbean in terms of popularity.
Getting Started with Fractional Investments
With all of this in mind, it’s easy to be attracted to this investment type. So, how do you get started? We recommend getting in touch with an agent or researching online for reliable and trustworthy opportunities. These days, there are some brilliant companies who will handle everything on your behalf. After getting in touch, they will show you a number of opportunities before booking an inspection trip and meeting.
After discussing all the finer details, you can ask questions and make a decision. If you choose to go ahead, you’ll start earning almost instantly. With the right opportunity, you’ll even get five weeks of free personal use per year.
In summary, fractional ownership investment property opportunities allow you to purchase a portion of a property or resort. You can get started with cash investments of as little as 45,000 Euros, you share the rental income with all other owners, and enjoy capital growth over a period of years and use your property when you want. What’s more, there are no closing costs, no confusion and long-winded paperwork, and no reliance on a mortgage.
In terms of the hotel or resort, an experienced and reliable hotel operator will take care of things so you shouldn’t have to worry about a thing. With Cape Verde property investments like this, they use a tried and tested investment model, and this allows us to step in and take advantage. Fractional ownership can be your start to buying property in Cape Verde, you will have all the same advantages of investing in property but your initial financial exposure is less so you will be dipping your toe in the water. Why not continue your research and get started today?
There really isn’t a better time to invest in a thriving tourist destination like Cape Verde. Not only is tourism growing each year, government legislation is in favour of investors and it’s not often we can say this.
Invest In Cape Verde in partnership with The Resort Group specialize in marketing luxury beachfront properties with fixed net incomes & proven track records of capital growth plus up to 5 weeks of personal use.
If you want to buy property in Cape Verde, we have some fantastic opportunities at Invest in Cape Verde. With beachfront properties and high-quality hotels, you’ll enjoy a fixed annual income, secure freehold investment, up to five weeks of free use per year, and peace of mind that the hotel is managed by names with a proven track record in the industry.
After finding an investment, simply book an inspection trip and start earning regular income in no time. Allow us to be your Cape Verde property investment partner; the legislations are on our side and there’s nothing to suggest this will change any time soon!