All Forum Posts by: Thomas Youngman

Ola!

Firstly, Portugal is awesome! Between lovely countryside and stunning coastline, great food and super friendly people I love this place!

Secondly, it would be great to have a meet up in a vaguely central to everyone kinda area. It seems there is a pretty decent group of people on BiggerPockets here in Portugal and it would be fun to meet up and have a few drinks and chat mainly about REI. Though I can also happily talk BJJ, surfing and anything outdoors with a beverage in hand until dawn!

So using the wisdom of the crowd where would be a suitable location for a meet up? Lisbon is an obvious suggestion, but I have been here for hardly anytime at all so what do I know about it:)!

I am in Ericeira, but happy to travel to wherever makes sense for most people to meet up in.

Thoughts?

I arrive in Portugal a couple of days ago. I love this place! I haven't managed to get into the waves yet but they look amazing and the countryside is beautiful! 

On the negative side no one wishes to rent long term here! It seems to be pretty much impossible! Everyone we have spoken to only considers short term rent as an option. A combination of extremely tough long term tenant protections and the economics of short term renting being a lot more attractive. 

In  terms of a meet up, I am very keen to meet fellow RE investors so give me a couple of weeks to find a place to live and I am happy to organise one. 

Hi Mark,

Sorry for the slow reply. I have been travelling. Very keen on meeting like minded REI people.

We arrive in Portugal at the end of March and once we have got ourselves sorted I will see if we can get a few people around for a meet up. 

Looking forward to arriving in Portugal soon!

I have invested in Mongolia and the UK and am looking at Portugal currently. My view is pretty simple, you just really need to know the market. 

I am lucky in that I can spend the required time in the country to learn the market. If you can't then I believe you are not meeting the generally accepted rule of know the market before you invest! Obviously you can use local advisers, but that is a whole other discussion.

We brought in Mongolia and while the local market has been pretty reasonable to us the FX rate went from 1 USD : 1350 MNT (Local currency) to 1 USD : 2635 MNT today. A pretty painful lose in USD terms!

Obviously Mongolia is not an established market, but I think it worth having a view on likely FX movements and a plan of what to do if they move against you. 

If you look at the EU and the UK for example which have significant foreign investor interest, both potentially have material FX losses coming up due to Brexit and a few other issues. This also provides potential buying opportunities if the fundmentals of the market haven't changed.  

 The way we now deal with the FX risk this is diversification, I can be pretty relaxed about our Mongolian loses as it is a fraction of our investment pot. 

More positively when we buy now we also now have in effect a stop lose built into the property. Depends on the specifics of the situation but for example if the FX rate reduces by over 20% or the market drops by over 20% we would seriously look at exiting the investment. 

Exiting with a lose hurts, but less than being 50% down like we have experienced with Mongolia for example!

Having said all of that by investing internationally you do more than earn $, you widen your world view and get to live in amazing parts of the world where the $/quality of live metric is way better than a lot of the more expensive areas of the world.  

Hi Tiago,

For what it is worth here goes my thoughts. 

I would put together a marketing pack on the property, similar to that that Brandon talks about in this deal analysis calculators. 

If you could highlight the investments strengths it should be easier to get brokers to list it. Alternatively you could always list the property directly? I know you can do this pretty easily on Rightmove.com from the UK and likely with a few sites out in Asia, to target the common Golden Visa investors. www.propertyguru.com.sg would be worth a look for example. 

This skips the broker issue and if the property itself is attractive enough might generate you some leads.

I would think if you could get well presented listing on a site like this with attractive financials you wouldn't be short of leads.

The key questions I would want to answer up front would be as a remote REI, how is the business going to run without my direct involvement, is there a suitable management team in place?

Clearly there is massive interest in Lisbon, but why should someone look outside of this area? If you could explain this then it would help generate interest.

If the yield is 7% in a rural setting compared to a slightly lower rate around the Lisbon area, why would I gain a few % points but lose the liquidity and significant economic growth drivers that Lisbon offer. Again if you could answer that question up front you would certainly gain more interest. 

I hope that helped 

Thomas

Does anyone know where you could find median income data by area in Portugal? Reason for asking is that I am trying to understand what a reasonable target rent per unit is for specific geographical areas. 

I understand that the average household net-adjusted disposable income per capita is USD 20 519 a year. Link below.

http://www.oecdbetterlifeindex.org/countries/portu...

This tells me I can reasonably expect long term rental income/unit at around 570 Euros to be supported by the market. 

20,519/12 =  1709.92 income per month

1/3 of income spent on rent = 570 Euros per month I reasonably target on average. 

Hi,

For what it is worth below is my current understanding about mortgage financing in Portugal. Based on this some elements of my REI strategy are going to need to be adapted!

1.To extract equity in your property by re-mortgaging if you brought the property with a mortgage is normally not possible, it might be if you have extensive building improvements.

2.Getting a mortgage on a property you own 100% of is usually possible. Its usually called a post-completion or post-purchase mortgage. It is usually allowable up to 6 - 12 months after the purchase.

3.Buildings are determined as commercial or residential based on the official cadastral category by the local council.

4.Commercial mortgage LTV Max 60% depending on the specifics.

5.Not an issue using foreign income for affordability calculations if salary is taken into account.

6.Property valuation is conducted by a valuation company requested by the bank.

7.Residential mortgages can be up to around 80% LTV depending on affordability.

8. Banks never allow residential mortgage affordability to be based on the income of the property itself

Hi,

The purpose of this post is to connect with anyone interested/actively investing in the Portuguese Real Estate market. 

I am moving to Portugal in March 2019 and wanted to connect with fellow Property investors. There seems to be an interesting investment case for Portugal currently and by building a supportive network of investors we will be able to discuss opportunities and build our experience faster than if we go it alone

When I arrive in March I will be focusing on learning the market and seeing which strategies will work for me. 

Thanks

Thomas

Hi, 

I came across an advert for 8% net returns investing in airport car parking in the UK.

http://landing.globalpropertyguide.com/19460144/uk/investment/245/?mid=46489

It seems to good to be true and so my con radar gets fired up! 

Has anyone dealt with these guys or invested in airport parking before? I am not sure if it's this good why they wouldn't just keep the opportunity all to themselves! 

Regards,

Thomas 

6 units. 1-2 bed each. Good location.

How do we go about it, to be honest be ready to offer whenever one of the other owners wants to leave. As I say I expect it will take years!