Selection of the object for investment and participation in the program Golden Visa Portugal

Investing in profitable real estate in Portugal. Alexey’s story

More and more often on the vast expanses of the Internet, there are positive life stories of people who emigrated from Russia to other countries, such as Portugal, where they found work, happiness, and peace of mind. They felt what material stability, confidence in tomorrow and even in the day after tomorrow are, and now they do not get tired to share their emotions, their impressions of their new life with others. Blogs, websites, and social networks are filled with information of this kind, but whether it is presented in a too “fairy-tale” format, or few of the readers perceive it as truth. The standard of living seems too unrealistic by our standards. So when my old friend told me that he decided to radically change “location” and take his family from his dearly loved (this is not sarcasm, but the absolute truth) homeland not in a neighboring country, but to Portugal, everyone who heard it was stunned, to put it mildly. But first things first.

Decide or give up?
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Decide or Surrender?

Our hero’s story has a lot to do with the global quarantine and its incredibly harsh conditions. Only a few have not been touched by this virus, not even in terms of health, but in terms of material losses, in terms of limitations. To remain unemployed, to lose a business, to get into huge debts. This has become familiar to many people. The expressions “global financial crisis” and “coronavirus epidemic” have become forever part of history. Someone gave up (let’s not hide it, the majority), gave up, began to live one day, and someone opened from the unexpected side, surprising not only others but also himself with his talents and determination.

Alexei could safely be called a victim of quarantine. And he was this victim he was. Only having suffered financially, and morally, he was not going to give up. Perhaps if he had been alone, he would have given up. Unlikely, though. And here was the responsibility for the family, pushing him to act decisively. And he knew there was a way out. He felt it on a subconscious level.

There was one thought that haunted him. It was going around in his head, but he could not understand it. He could not formulate it, but he tried.

And then that very “peak” came. It was a very difficult day. All the letters that Alexei sent to his colleagues and partners with questions about orders, cooperation, about possible prospects for mutually beneficial work remained unanswered. All of them. He sent them early in the morning. He began to get nervous that the answers weren’t coming in about an hour later. It was obvious that all the letters had been delivered. The recipients were online. But those who used to push for a meeting with him, who used to shake his hand cheerfully when meeting him a few months ago, now didn’t even open his message.

Thankfully, modern features allow you to see not only if the message has been delivered, but if it has been read. Unpleasant, but maybe just busy, a little later will read. It can not be that no one answered. And then the phone vibrated. Glancing at the screen, Alexei was happy. Stepan, his biggest tenant, called. In general, it was from Stepan that came about 40-45% of Alexei’s monthly income. Joyfully picking up the phone, the hero of our story “returned to earth” literally immediately.

Stepan called to say that he was terminating the lease. That he was forced to do it, that he was uncomfortable, but he was forced to do it again by the quarantine restrictions. There’s no way to work. The bureaucrats won’t let him. Business is dying. The conversation stopped. Another source of income was shut down. The situation was heating up.

“Keep your money in the bank” – such an appeal Alexei fundamentally left unheeded. So he had no deposits, no interest. There was some real estate “in reserve”. But now the options for sale at an acceptable price fell away one by one. Scolding himself for his indecision during the past years, when the Russian Federation market was already showing its unreliability, he felt cornered in the truest sense of the word. He wanted to simultaneously take a break, hide from all the problems, and somehow miraculously achieve a magical solution to the problem.
Only thanks to his family did he pull himself together. You have to remain a man in any situation. And no matter how scary it may be, you have to take responsibility for the life and well-being of your family.

Adventurism takes its toll
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Adventurism takes its toll

A business, especially one involving investment, is always a risk. There is no doubt that the human desire for peace, wealth, for prosperity is in the blood. But only the bulk of people dream of miracles, of benefits, but do not strive to achieve results, and only a few people work tirelessly for years to come to constancy, stability, and confidence in the future.

The hero of our story belonged to the second category. Not only that, but he had belonged to this category for many years. He was used to a steady steady income and used to observing and controlling, but he did not stop being a manager and did not lose his acumen. Therefore, the current situation, in which all his attempts, all aspirations remained in vain, in which he was losing clients, in which he saw no prospects, and over and over again found himself at a dead end, simply knocked him out of his rut. Alexei’s primary goal was to get a predictable flow of money back into his life, to become a calm person again, as independent of external turmoil as possible. So far in Russia, this was impossible. There was only one correct solution. To achieve his goal, Alexei decided to leave the country.

Paths of Achievement
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Ways of Achievement

Europe was considered our hero from the beginning. Only considered in general, as a great opportunity. There were no specifics. Confidence in the right choice, too.
And in addition to overcoming his doubts, he had to convince his family members to leave Russia. No one knew what was more difficult: to contemplate the vague prospects himself or to convince his family that everything would work out, knowing that he was pushing them, who trusted his opinion completely, into a very risky venture that could turn into a natural disaster, a total collapse and disappointment.

As he continued to ponder the pros and cons of moving out of Russia, Alexei made a very good decision. He took out his notebooks and began methodically calling everyone who was listed in them. The result of a few days “on the phone” was the restoration of contacts with old acquaintances, many of whom now lived abroad.
Alexei was in no hurry to tell about his problems. It would look silly, childish somehow. And in terms of “getting information,” he did not pounce on his companions either. Just listened, and talked a little about himself. With the joy of renewed communication came the global disappointment of receiving first-hand truthful information about the real estate situation in different countries. Some of my friends did the deals themselves, some had their acquaintances going through the transaction process. The market offers in the countries of Europe are overcrowded, and the price in numbers, though increasing, compared with Alexi’s calculations shows quite different results than he had expected before.

Study, plans, calculations
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Study, Plans, Calculations

Perhaps not all readers understand the protagonist’s experiences. Many may think: “What a problem: to move to Turkey or Barcelona. Let’s try to explain with an example. Suppose a business is built on selling chicken eggs. What does the entrepreneur experience during the bird flu, when all the birds were forced to be destroyed? Or a farmer lives off his vegetable gardens and orchards, and then some kind of environmental disaster and everything dies. Collapse? Total. Absolute. Many words can be chosen, but the meaning is the same. When a person, after living half a life, decides to move to another country, it is an indicator of both determination and strong-willed character, adventurism, and hopelessness. But it is not enough to decide to move. At this age, risks are more soberly assessed, the understanding of personal needs and the needs of loved ones is closer, and the level of responsibility for the life and well-being of those who depend on the head of the family making such an important decision is higher. That is why Alexei could not take off and leave. Not even “for a scouting trip”. That is why he was so worried, and therefore continued to make calculations.

For example, real estate is very expensive in Turkey, despite its accessibility to rest. A one-bedroom apartment costs 40-60 thousand euros! It all depends on the city and even on the area. According to approximate calculations, the amount of property maintenance costs is many times higher than the income from its rental. Moreover, the house for the year was rented three times for a total of four months, and you need to look after it for 12 months and pay for it, too, need all 12 months. Utilities are metered, but the maintenance of the adjacent area and entrances are all year round. So even if the apartment is closed, the bills will still come, and if they are not paid for a long time, the owner will be wanted. Keep in mind.

Housing in Estonia is very inexpensive. It is quite realistic to buy a mid-range apartment for 3000 euros, even more than that. But what is the point of such investments? If real estate is inexpensive, it means that no one needs it. Is it logical? And the point of moving there if there are no prospects for development?

Especially since the goal was not so much to pick up housing, as to acquire the available amount of real estate for yourself and to rent for extra income.

Norway, Ireland, and Switzerland were recognized in 2020 as countries with the best standard of living. By whom? By the people themselves and other European countries. But only for emigration, they are not the best, unless there are relatives and loved ones. The housing there is expensive. The rent is about 1,500-2,000 euros a month. Largely because of the expensive utilities. Plus you can’t come to the countries so easily. Either a tourist visa for a short time, or a residence permit after entry at the invitation of a citizen of the country. Property there can buy anyone who can afford it. But there is one condition – the real estate after the acquisition of 5 years can not resell.

But to move to the country and not have a job there, even if there is money to buy real estate, is stupid and dangerous. Internet wanderings now in terms of finding a stable income continued, but remotely I could not figure it out. If there was no quarantine, it would have been ideal to go on a tourist trip in person and solve all the issues on the spot, find out everything, solve everything. But the forced restrictions were driving me to a dead end.

Investing in profitable real estate in Portugal. Alexey's story
Investing in profitable real estate in Portugal. Alexey's story 14

“Flash” of insight and correction of the intended path

“Remote-to-remote” was spinning in my head, there was something to that. The next google query formed itself “investment funds and companies”. The list came out of the “wow!!!” category. Alexei didn’t even try to process the information he received. He changed the search query to construction companies engaged in a remote search for interesting objects, execution of all documents from scratch, and full completion of the transaction. And again a huge list opened in front of him. Noticing that almost all of the agencies emphasized not offers to buy, but offers to buy to sell later, making repairs or remodeling, he realized that the main emphasis in the real estate business was on resale by experienced entrepreneurs. So what’s the point? Details, expectedly, were not disclosed; an appointment for a consultation was offered. Why not?

All the more so as the investment funds as a passive income were rejected at once. The story about “substantial investment without guarantees”, but with beautiful words and pictures had already been told to the hero of our story. The second time on such an obvious hook for a stupid “fish” he was not going to get caught.

Some interest was aroused by the objects from the builders. Here everything was clean, smooth, and open. Only construction in its final stages was of no use to Alexei. This is practically the full market value and a minimum profit on the difference in the subsequent sale on the market, just beginning to recover from the paralysis of Covid. There was no sense. Once again convinced of the correctness of his decision, Alexei decided to start.

Work Plan
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Workplan

He chose several real estate agencies in southern Europe and signed up for consultations online. He marked himself to look at buildings in need of minor repairs and building plots of land. The ideal would have been an option for remote registration of the transaction, but it is already in the situation.

After the registration process, contractors should be involved in the work, which will take care of permits and help put the property into operation upon completion of construction. The final stage – renting out the property for a long-term lease (ideally a young family), and then selling them.

Passive income was also set as the ultimate goal. In the beginning, it was necessary to carry out a few successful transactions, then build up capital and multiply it by renting out properties.

Five weeks were spent just negotiating. But Alexei was ready for that. And for conflicts. And he did not have to wait for them.

Conflicts, problems, difficulties
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Conflicts, problems, difficulties

The stage called “don’t lose the fuse – don’t give up the idea” unfolded incrementally. Beautiful pictures in the clarification of information from realtors began to fall apart before our eyes. It turned out that the promised options for quick development or the sale of almost ready houses are nothing more than a trick. Yes, there are real offers. But there are not hundreds or tens of thousands of them. And when you start looking, that’s the impression you get and you “spread your wings. There are only a few good offers. And among them, it is necessary to choose the one that is suitable in terms of price and parameters.

The second discovery is no less unpleasant – if you are lucky enough to find an object, finish construction, put it in order, and sell it, the benefits will not exceed 15%, if you count on the original cost. And that if you’re lucky.
The website idealista.pt “popped up” when Alexei was about to turn off the Internet. Bright pictures attracted tired attention but stop. Portugal? It wasn’t part of his plans at all. At first he just “ran his eyes” over the pages, then he felt how he began to come alive again, how the interest flared up again, how the inner voice spoke, saying “well, here it is! Only a worm of doubt still gnawed at his soul, and to muffle it, Sasha began to methodically study the information.

Port wine, sailors, ocean, colonies, some distant edge of Europe. But this was that paradise! And what views!!!! Reasonably chuckled, Alexei brewed himself a fresh coffee and began to put his plan into practice!
Willing decision and correction of the plan [the culmination of the transformation path].

The negotiations began anew. Now for Portugal. Here, only the MoveToCascais service offered a turnkey solution. Here it felt like it went right away. The staff both explained the process clearly and offered to take on the commitment of entry-exit from the deal and its full support. That is, they undertook to find tenants or sell the property at a price that promised to be twice as high as on the market in Spain or France.

At the same time, a real estate buyer appeared in Moscow, and it was no longer possible to postpone making a decision.

On the one hand, to trust 500 thousand to a company, which guarantees the deal somewhere at the edge of the Earth, the representatives of which I have not seen and do not know that you will see is just creepy. And on the other hand, consultations with lawyers, contracts, and video conferences with the lawyers of the other side, the contract I had learned almost by heart, pushed me to the decision to take the risk.

After all, the pandemic leaves no other option. “There is always a way out, only sometimes it is disguised behind the inscription ‘In.

Activating the outcome

Having analyzed all the risks one last time, Alexei discarded doubts. After all, he is a businessman with experience, not a modest girl at the altar, so just go ahead. If he loses, then so be it, so fate has decided. So again, to go from zero to the top, and the experience is gained in this.

The object was found almost at once. The house of four apartments with a total area of 220 square meters in the suburbs of Lisbon was presented in a computerized reconstruction plan, which means we could “scroll” it from all sides, view, evaluate, and calculate.

In order not to bore the readers with the long calculations, let us say simply that such an object, if properly operated and rented at a fairly reasonable price in the usual, not “hot” season, can bring 450 euros a day. Stable!!! Plus additional income due to tourists. Even if a fully settled house is at 60%, the income from the rental of housing will be at least 15% per annum. Those who are oriented in real estate prices will understand, those from other fields just believe that this is a fantastic result!!!!

And there is also the option of a long-term lease at 5% or more per annum. Or sale (not passive income, but the difference with the final cost will be bigger), at a price of, for example, 4600 per square meter. Previously, you need to look at proposals on the market and calculate the average. We have the highest price at the time of the calculations was 960K + investor would have requested at least 10%, which means the estimated value of the object received 969.

It turns out the market price of 4418 per square meter, and the sales price is 4364. By comparison, in the same neighborhood, the price ranged from 4000 to 5500 per square meter. Benefits were becoming more and more tangible. I decided to set the price at 4600 per square meter with a note “bargaining is possible” and eventually reduce it to no more than 4343. But this will be very cool because it would not be less than 47.7% of the profits from the initial price.

Again, the calculations, now in terms of timing. You should assess the situation realistically, and not wait for manna from heaven a month after the deal.
At least a year. Such a term was set very approximately, and it was said frankly. No one could know in advance how long it would take to “shoot” a profitable deal. Any investment is your own risk. Alexei understood that, but his gut feeling had never failed him yet.

Even if the process drags on for two years, it will still yield 25% per annum of the initial amount. And that’s a good investment. Not perfect, but good. In these calculations, taxes are not included. That’s a disadvantage. But not critical. You can survive it.

The process has moved into an active phase.

Long-awaited move

Remotely concluded a purchase agreement, signed documents with contractors, and gave the start of the repair crew. In general, the reconstruction with the commissioning took 6 months. In mid-September 2020 Alexey and his family had already flown to Lisbon. Even during a pandemic, it is possible if you work with a good, reliable, responsible partner.

In Cascais, Portugal, the newcomers are settling into their apartments, preparing for the reception of tenants intended for rent. It still takes time, at least a month before the tenants move in, which is a dynamic Portugal more than enough. And there’s the cherry on the cake – the income and the search for new investment opportunities. This is exactly what the whole family of Alexei has been waiting for. There will be no failure. Small setbacks, yes, but after we have experienced them, no one would pay much attention to them.

Rebirth

The pandemic could have been a disaster for humanity, and it’s no surprise that its effects will hang in the air for a long time, knocking you out of your normal routine. But many find pluses in such a shake-up. A year ago, Alexei and his family could not even think that they would not just live in another apartment, in another house, in another city, but on the other side of the planet, that they would leave everything, leave, in fact, to nowhere. They were ready to give up, to submit to circumstances, but they decided to fight to the end and they won.

Now the family is in Portugal. Everyday discoveries, new acquaintances, no shocks, everything is stable and calm. The life that we couldn’t even dream of not so long ago, is now a reality. Nice country, nice people. Of course, not everything is perfect. For example, Alexei’s wife misses some Russian products, and the feeling that they are in Portugal temporarily, that they are here as a guest or on vacation, does not leave.

But what the whole move was for is fully justified. Portugal has all the conditions for life, for a decent life, there are prospects, there are opportunities. Here, those who work, study, and live at a decent standard, can afford good housing, decent education for children, a quality vacation at any time of year in their (not unimportant) country, not abroad. The air is clean here, the nature is beautiful.
It makes sense to take the risk. What to look for when moving, the article shows. Do not act in a hurry, and everything will work out for you. Perhaps, before this trouble in life was only because you were in the wrong place. Try it. A man has the right to change his fate. Not only that, he is obliged to do everything to live a decent and happy life. And Portugal, as a country, provides everything for this.