Cape Verde

Re: Cape Verde or other country in which to invest

I had a look at ownersdirect.co.uk and all the availability charts are pretty much empty. With all the extra property coming on the market as it is being built where will that leave the rental market?

Cape Verde - fine if you want to spend 3/4 months in the sun and want to buy a cheap apartment for yourself, otherwise forget it.
 
Re: Cape Verde or other country in which to invest

when i enquired earlier in the year, many were fully booked. If you look at same site again (owners) and see what's let in canaries, many have good percentage of property let-esp nr sea.
My reckoning is that when it's not full of dust, and roads dug up (ie infrastructure complete) it has potential to have lettings as good as- if not better than - canaries.
For sure nov-feb, as the weather is better.
Only thing at the moment is it's up in the air, with loads of villas/apartments/bars/hotels being built.
I think the idea is to build them all at once, rather than stagnate.
 
Re: Cape Verde or other country in which to invest

And over saturate an already poor rental market. At mortgauge rates of 7.5% ( say €9,375 interest only of 125,000 mortgauge) and taking management costs of 10% for letting and a yearly service charge of say €1,200. Add also costs of the electricity and water (say €25) that is used when it is let and the cost of cleaning and laundry after each let (say €50) and you see that the number's just do not stack up as an investment location. By the above calculation and its are only a rough guide you are looking at costs of over €15,000 per year just to break even. Now at a rental of €500 per week that means that it needs to be rented for 30 weeks minimun just to break even. Yes maybe its a lovely island but its certainly not a place to make money.
 
Re: Cape Verde or other country in which to invest

I would agree that I would not be expecting rental income to give much in the way of profit. However, I would be expecting to use the property for 4-6 weeks in the year. Am looking at it more of an investment in capital growth, rather than annual income.
I see the market as one for longer term growth, with prices being at reasonable levels for property investment as it stands.
 
Re: Cape Verde or other country in which to invest

With my estimates being at 25% for lettings, and having reserves to cover any shortfall, it is not an issue which is worrying me. Any lettings above 25% will be a nice bonus though.
Rarely in the long-run, do property prices give nothing back to the investor, in my opinion.
 
Re: Cape Verde or other country in which to invest


So you really think that whilst spending 7.95% variable on a mortgage and getting some rental that will probably not even cover this mortgage that 4-6 weeks of own-use will "compensate" for the shortfall whilst the place develops? How can this compete with places bought on European mortgage rates of 4-5% if all it has is sun, is difficult and expensive to get to, and is still very much in the developing phase?

Why not put 50K of your money on deposit in sterling at 6.8% and pay the €2000-€3000 rent for own-use to someone else for the 4-6 weeks that you really want a place in CV? OK if it was 3-6 months own-use per year, or as a permanent place in the sun to retire to, I could understand. Can't see the numbers stacking up though as an investment when your "competition" is from other owners who are currently only asking €600-€750 per week in CV before subtracting costs = €500-€650 nett before tax (and they may not even be getting this much).

I'd be comparing this to the Caribbean (e.g. Dominican Republic) because of flying time, travel costs, security, infrastructure etc. rather than to the Canaries. And if the dollar falls the Caribbean gets even cheaper. Plenty of availability on these package tours and cut throat prices last time I checked.

And that old chestnut of looking for the longer term growth. I am fortunate enough to live in a country that has high taxation but where the tax is agnostic as to whether an investment delivers rental income, dividends, retained profits or capital gain, which makes all asset classes fair and comparable. This makes me look much more towards monthly/yearly hard cash yield generation, because that is the bottom line to everything. You can always re-invest free cash in a new scheme
 
Re: Cape Verde or other country in which to invest

I did an analysis on CV and The Canaries a few months back. CV did not stack up at all and The Canaries were dubious - perhaps if prices fall or stagnate for a few years they (The Canaries) might be worth considering.
 
Re: cape verde/other country to invest

MrKeane said:
Cape Verde is a great place to invest.
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I would disagree. There are many issues on cape verde. The first is that it is Africa - there are water problems, developers have problems getting enough water to mix the cement. The next water problem is the water table underground is rising and sometimes coming up through the ground, which will corrode many structures especially if they are using cheap materials. The logistics is a big problem as almost every single thing onthe island is imported and the port isnt good enough. There are sanitation problems becuase of not enough sanitation plants. theres problems will food poisoning becuase of power outages - frozen food being thawed and refrozen. The government are corrupt (i know arent they all but they are very much so here), title is suspect because the government have reclaimed lands before, they can do it again when it suits them. There is an over supply now, and not enough tourism to give the rental returns discussed, there is no commercial and until someone major goes into cape verde and pumps a couple of hundred million into the place, all of the problems associated with africa will still be there including STD's etc, lack of proper medical care. I could go on all night...
A good flight connection is not the be all and end all I dont think, and I also beleive once the direct flight has come into destination there is not as much money to be made
 
Gde - all of the problems you have mentioned were well known about before any developers "moved in". Many are highly skilled an experienced big players - who would not hire architects and builders until they knew the answers to the points that you have made.
For instance it is a requirement that all major comlexes have their own de-salination plants to address the issues regarding supply for mixing and dealing with sewage.
As for electricity, this is due to be modernised in its efficiency, as is the port.
All quality built developments have taken measures to deal with any corrosion problems - including use of damp-proof membranes. What makes you think this is a problem that solely relates to Cape Verde.
Sure, all plans have potential stumbling blocks - if these are addressed and dealt with then it's not an issue.
As for tourists...as I've before - wait til everything is "in place" !
Lots of potential exists for businesses to open there. I have even heard that a large hambuger company has shown future interest.
 
Thomsk, i have a two for one burger voucher from tesco do you think they will be open before it expires !!!!!!!!!!!!!!!!!!!!!!! Carlos
 
Don't know about that...I'm just hoping that ronald mcdonald goes there soon.What more of a reason does anyone need to buy property in CV? If BK moved there, reckon I'd emigrate.....and get really fat in the sun.
 
Macari's chipper have already started to look at importing battered sausages and spice burgers and rumour has it Centra have a line of jumbo seafood breakfast rolls (plenty of sauce) and a mug of tae for a fiver.
 
Carlos said:
Macari's chipper have already started to look at importing battered sausages and spice burgers and rumour has it Centra have a line of jumbo seafood breakfast rolls (plenty of sauce) and a mug of tae for a fiver.
Click to expand...


just as well after shelling out £400 stg for the flights.
 

thomsk, perhaps these issues were known but maybe you give more credit to some of these developers then they deserve. Big hotel players are different. How many sites there have just a digger sitting on the site with a security guard? (this means they have legally started construction). I think you'll find in general many small time developers will sell off plan and worry about the issues later. Many havent taken measures. I remember one developer selling underground car parking space - do you think damp proof membranes will be ok on a carpark totally underwater? that the cement has been mixed with 40-50% seawater? Im not being smart here its very dangerous indeed to assume that a developer is correcting and paying attention to some of the issues brought up, beause it comes down to whether they have a consicence of not a lot of the time

As far as macdonalds coming in, it will be a long long time, otherwise they would have more lawsuits then milkshakes with electricity and sewage being out of action for 2 and 3 days at a time.
Perhaps i will eat my words, but I think there'll be a lot of bad press on the place in a few years especially in ireland where most of the buyers are from.
 
ClubMan said:
GDE - don't you have a in warning people off places like CV?
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Clubman, I see what your saying, its my honest opinion and experience with it. I think a lot of agents blow it up to sound far better then reality. But that is not to say I am right about it, ive had the discussion with many people and some fight a great arguement that it will be a fantastic long term investment.

I agree its a conflict of interest for me to comment on other countries for investment, so I wont in the future.
 
I can understand wholeheartedly where GDE is coming from. I have heard that there are unscrupulous developers operating within the islands. I would suggest, however, that this situation occurs around the world. It is down to the investor to do their "homework" when considering choosing a developer.
For instance, I would not dream of parting with any money to a developer who has not got a proven track record in building past, quality projects ( in CV or otherwise).....as I'm sure is the case with anyone who has an ounce of sense.
 
GDE said:
I agree its a conflict of interest for me to comment on other countries for investment, so I wont in the future.
Click to expand...

GDE,

You are more than welcome to fairly criticize a product or company (or overseas property location!). But if you have a potential conflict of interest, you can state this in your reply (or on your signature).

I, for one, would miss your insightful comments if you decided not to post any more about CV or other similar locations.

aj
 

ok will do that in the future, thanks
 
It appears that CV keeps making positive progress at a fairly brisk rate. It's just been announced that, in December, they will become part of world trade organization(WTO).
This should mean that it will have a more competitive economy, and that there will be a greater level of security for foreign investors.
 
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