Introduction
If you think Brazil is all Mardi Gras and beach volleyball, think again. Brazil is one of the BRIC countries and its economy is forecast to grow and grow. Goldman Sachs predicted that these countries offer “fantastic opportunities... spectacular potential”. Brazil’s President is undertaking a strict economic programme to bring down inflation, interest rates and improve inward investment. There are a million millionaires in Brazil and the middle class is growing and becoming wealthier, pushing up demand for land and property.
Our land plots in Brazil are extremely competitively priced and prices start at just £15,070 for a plot of 360m². That’s an amazing £41.9 per m² for land with planning permission in a beautiful location in Brazil’s favourite holiday destination, Bahia. The site is minutes from the 16th century town of Belmonte. It is an hour from Porto Seguro whose airport connects the area to the major cities of Brazil and beyond. Bahia is where the locals go on holiday and will also want to buy land.
Land on the same site as ours is currently being marketed by other agents at a higher price. We are getting a guaranteed discount of 11% - and the other agents’ land is selling fast!
There’s more - we have managed to secure finance in a country where it is impossible for foreigners to do so. The interest rate in Brazil is currently a rather steep 22%. We can offer a non-status mortgage on this land at 9.9% over a ten-year term. With a 30% deposit payable, that means you can secure yourself a piece of land in Brazil for
just £4,521.
One last thing – we are offering the option to reserve other plots on the site for £500 for each additional plot, which locks the price as it is today, but you don’t have to pay for it for a year! Mortgages are also available on these optioned plots.
So if you want your own piece of paradise in one of the world’s most exciting economies, give us a call.
Warm regards,
Alise and Jonty Crossick
At The Plantation we have secured a fantastic price that is 11% under market value, starting from £15,070 for a plot of 360m². But how do we know it’s a great price? We calculate this by comparing it to similar properties in the area.
The clearest direct comparable is land on the same site which is being offered for sale by a different agent, in this case leading estate agent Colliers, who are selling plots of the same dimensions (on average 360m²) at The Plantation for £17,0002. Our land is a full 11% below this price at £15,070. Additionally, if you buy through Colliers you could not secure financing, non-status or otherwise.
We have sourced other comparables, which are often available only in larger size plots, which means that the cost and your initial outlay are far greater. Also, in the other land offers, there is no financing available, and in one case planning permission has not been finalised. Taking the average price of these plots into account, the Ready2invest price at The Plantation is very much under market value.
The Three Key Benefits of Buying Under Market Value
1. By securing properties at a discounted price to market value, you get instant equity. This means you lock in your profit when you buy and capital growth becomes a bonus rather than all you rely on to make profit.
2. It also covers your downside – the market would have to drop by the full amount of your discount before you would begin to lose money.
3. Buying at large discount also acts as a leveraging tool. Capital growth is incurred on the market value of your property, not on the discounted price of purchase. You could look at it as having your equity work as hard as it would with a small mortgage – but without the repayments!
How is land priced?
Put simply, the only true way to prove the actual worth of any piece of land is for sellers to advertise the land on the open market and sell it.
Looking more technically at how land is priced, the customary way to price land is to work out its value based on the profit that can be extracted from the land once it is developed. In this process the profit expected is linked to many factors including risk and competition.
There are many permutations of these factors, the least satisfactory of which is low-risk and strong competition which lower the acceptable profit.
Thus the land price can be impacted by delays or problems at the planning stage, limitations to the planning parameters, the level of infrastructure in place and that which would need to be provided by the developer.
In addition, the greater the planning density, that is, the more that can be built on the land, the greater the achievable profit and so the higher the value and therefore the price of the land.
If there is a lot of infrastructure in place, this also increases the guaranteed profit and so increases the price of the land.
In the case of our Brazilian offer, the various elements combine to demonstrate that this land is very well priced whether comparing the price per square metre against a similar parcel, or indeed land on the same site which is being sold for more than Ready2invest’s price, or calculating the value using the principle of profit/risk trade off.