Attention Global Property Investors: Tourism Trending Up In Brazil

September 12, 2018

When it comes to where in the world to invest your cash, you’ve got a lot of locales to consider. 

That said, if you’re looking to invest in property overseas with the intention of generating short-term rental income, then you’ve got to pay attention to factors that affect rental demand. 

Specifically, you need to look at:

  1. The Country’s Visa Policy
  2. Domestic and International Market
  3. Family Friendly Attractions

These three factors have huge impact on a country’s (or a specific region’s) tourism numbers and, thus, your potential rental yields. 

It’s also why you should have your eye on Brazil, particularly Fortaleza, situated in the state of Ceara. 

Brazil’s Visa Policy Changes

According to a report done by the United Nation’s World Tourism Organization (UNWTO), visa policy is among the most important governmental formalities influencing international tourism. The UNWTO found that travelers will forgo countries with cumbersome visa requirements—in terms of cost and investment of time—in favor of destinations where the visa process is less of a hassle. 

In January, Brazil simplified is visa process for U.S. citizens by implementing its e-visa program. The entire process in done online and takes up to 72 hours. Before that, U.S. citizens would have to submit their visa application to the Brazilian consulate and it could take up to 90 days, in some cases, to get approved. With the visa program in place, Brazil is expecting U.S. tourism visits by 200,000 annually. In fact, the number of visas issued to U.S. tourists as increased by 90% according to Brazil’s Ministry of Tourism.

In addition to the United States, Brazil’s e-visa program is open to citizens of Canada, Japan, and Australia. The UNWTO estimates that visitors from these countries could account for as much as 25% of Brazil’s tourism. 

Foreign investment from these countries is expected to increase as well making investing in Brazilian real estate even more attractive. 

Ceara’s Domestic and International Tourism Market

A strong international tourism market is a good thing when it comes to short-term rental demand. It’s why global property investors pay so much attention to the number of foreign visitors a country or region receives on an annual basis. 

International tourism, though, is only one part of the equation.

It’s also important for investors to understand what’s going on with tourism on a domestic front. That is, do the locals travel to this specific region to vacation?

In fact, vacation rental markets where domestic tourism is strong should be at the top of any serious overseas property investor’s list. Even more so if there’s an active or growing foreign tourism sector.

Why?

For one, it gives you diversification in terms of your potential rental pool. In this case your rental income and yields are not completely tied to foreign renters. 

Secondly, in the event that you want to exit your investment, you won’t have a problem selling as you’ll be able to market your property to international investors or local buyers looking for vacation home. 

That’s why the state of Ceara, located in northeastern Brazil, makes sense for investors. Here you’ve got a very active tourist market for Brazilians and with the recent expansion of direct flights internationally (on top of the recent visa changes) foreign tourism is expected to increase by as much 40% over the next couple of years.

Though the official tourism numbers aren’t in yet, based on flight tickets already sold and hotel reservations reported in June by the Ceara tourist board, 440,000 visitors were expected for month of July—an 11% increase compared to July 2017. The Ceara branch of the Brazilian Hotel Industry Association projected hotel occupancies to hit 82% during the same period, up 2.64% year over year.

While hotel occupancy is expected to increase, the tourism board pointed out that it anticipates vacationers to opt for rentals through platforms like AirBnb.

Family Fun in Fortaleza and Its Coastal Resort Zone

Destinations with family-friendly attractions tend to have higher tourism numbers.

In 2017, Orlando, Florida Orlando, Florida, home to Disney World, had 72 million visitors—the first U.S. city to break 70 million visits in one year. Las Vegas, now with several activities that cater to kids, had over 40 million visitors last year.

The correlation between tourism demand and the number of family activities available is undeniable.

Fortaleza, Brazil’s 5th largest city, was rated among the top ten best destinations for families by Airbnb, the world’s leading online booking site with over 4 million rental listings and 150 million users. It’s Airbnb’s top trending destinations for family travel with projected annual growth of 380% (based off of Airbnb rental statistics).

According to 75% of the Airbnb users surveyed, the beach is where families prefer to spend their time. The beaches in and around Fortaleza are among the best in Brazil. 

Aside from its beaches, Fortaleza boasts nature and ecological parks, museums, a planetarium, a diverse selection of on- and off-beach restaurants, and world-class hotels. 

Just outside the heart of Fortaleza is a fast-growing coastal resort area anchored by largest water park in South America, Beach Park. It’s by far the region’s biggest attraction, drawing in over 1 million visitors annually—including Brazilian tourists from neighboring states.

This resort zone, known locally as “Beach Park”, because of its proximity to the water park is ideal for an investor looking for steady rental income and double-digit yields. 

It’s got an established, domestic tourism base with huge upside on the international front given the visa change and expansion of direct, international flights to Fortaleza. Further, you’ve got one-of-a-kind water park plus amenities and activities to draw in the family vacationer demo. 

In fact, if you’d like to capitalize on this promising rental market, then you should take a look at these newly launched, three-bedroom townhomes located just minutes from the water park and the beach. 

All of the units feature direct ocean views along with access to the complex’s private amenities which includes a pool, gym, and sauna. 

On top of that, it’s 100% turnkey investment as your unit will be managed by a proven property management company who’ll take care of everything from marketing, maintenance, bill-paying, collecting rent, booking reservations, and checking in renter upon arrival.

The prices of the townhomes start at US$ 99,000 plus closing costs and cost of an all-inclusive furniture package. 

Developer financing is also available.

To learn more about the new Beach Townhouses, get in touch with us today:

Carlos Cabral


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