Property for sale in Cascais, Estoril, Monte Estoril, Situated in Greater Lisboa, this new off-plan development is listed 30% under market value and has an amazing location, views, privacy, quality. Situated in quiet residential neighborhood the house is part of a two-house project, being sold by the project owner this house was originally meant for a single-family dwelling, but due to planning restrictions being applied, the two lots were unable to be joined, hence now having being developed as a two-house project on these lots, the owner is releasing one of the houses to the market, at COST PRICE. Because there are no agents involved in this project the buyer stands to gain considerable savings from profits and taxes normally applied on commercial projects at similar prices.
IN this project all of the value that is being created is being invested into materials and labor, so the buyer is getting effectively a project for 3800 euros per square meter when commercial prices in the area are closer to 9000 euros per sqm for new developments of similar sizes and locations, see this article on buying a house in portugal what to do and to avoid to get a real idea of the potential issues when buying in Portugal. The financial aspects of this property offers are interesting, you can see the numbers being invested into land and construction value, materials, etc. to understand the financial aspects of this project, being totally transparent the developer is offering this property without any commercial profits and instead the buyer/investor will become a partner in this project with a stakeholding in exchange for being the financier for the construction. The property planning is complete and the project will be fully managed by the owner who is making a carbon copy of his own property to be sold.
This type of project (Monte Estoril Residences) is unheard of in this hot bubble market that has been in force for the last four years in Portugal and is likely to peak at the time when these houses will be complete. As an investment, this project makes financial sense, so that the buyer will be able to rent the properties and earn a comfortable 5-7% return on the investment from fully managed short term rentals or long term rentals. If the investor wants a greater short term return on his investment then the best solution would be to resell the property is located in a prime spot of Monte Estoril (Cascais) and he will be able to earn a comfortable 30% return on this 1,275,000 million euro investment. Valued at around 1,550,000 million, this property investment in Cascais stands to earn the investor a considerable return on investment and good risk-reward ratio. Unlike with commercial developments where the developers often do not care if the house will be of high quality on completion, this project is driven by a personal agenda of a private homeowner whos interests are aligned with the investor as he is creating a carbon copy of the house of his dreams to be sold.
This will enable the private owner some slightly better terms on financing and will save the investor from other risky investments that would otherwise be totally driven by commercial agendas and have to factor in many different profit levels and associated taxes that would then be applicable.
In fact, when you develop any property there are so many taxes that the end price normally includes about 50% of the development value actually mostly consists of taxes on real estate.. The other large portion of any commercial project being developer profits of estate agent marketing profits. These two aspects add up to another 35% of the price of development. What’s left for construction, materials, design, and planing, and most importantly the land cost, often leaves very little by way of actual quality being purchased when you factor in all of these competing interests and stakeholders who need to have substantial wins to make the project make financial sense. That is why most commercial real estate in this area and Lisboa in general that are new developments retails at closer to 9000 euros per SQM. While in this project the retail price is estimated to be closer to 3800 euros per sqm.
Factoring in all costs, since there are only a few stakeholders in this project, the current owner, the constructor and the buyer of one of the houses, there are a lot less fees and associated costs that make the difference on land sales and taxes when you have factored in the developer profits and the marketing agency fees and taxes. The house land registry in portugal of Portugal shows how hot the market is right now in Cascais, with property values increasing over 13% last year alone, and predicted to have another bumper year with Brexit causing more immigrants to Portugal from Britan alone, and with the golden visa being in its potentially last year of availability for the Lisboa region, 2020 is shaping up to have even greater demand from these factors alone.
People sometimes believe that it is easier to buy a broken-down house and renovating it, but as this article what to consider with listed buildings in Portugal lays out, there are considerable planning considerations to factor in that can often leave an investor with serious restrictions on use and ultimately land value, as well as issues that can prevent licensing from being issued at the end of the project. Always consider such issues before investing.
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